File No. 70-8215
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-1
AMENDMENT NO. 3
to
APPLICATION-DECLARATION
under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
System Energy Resources, Inc.
Echelon One
1340 Echelon Parkway
Jackson, Mississippi 39213
(Name of company filing this statement and
address of principal executive offices)
ENTERGY CORPORATION
(Name of top registered holding company
parent of each applicant or declarant)
Glenn E. Harder
Vice President-Financial Strategies
and Treasurer
System Energy Resources, Inc.
P.O. Box 61000
New Orleans, Louisiana 70161
(Name and address of agent of service)
The Commission is also requested to send copies
of any communications in connection with this matter to:
Robert B. McGehee William T. Baker, Jr., Esq.
Wise Carter Child & Caraway, Reid & Priest
Professional Association 40 West 57th Street
P.O. Box 651 New York, New York 10019
Jackson, Mississippi 39205
<PAGE>
Item 1. Description of Proposed Transactions.
Item 1 of the Application-Declaration on Form U-1 in this
proceeding is hereby supplemented to add the following to the end
thereof:
"As described in more detail in previous filings in this
proceeding, System Energy Resources, Inc. ("Company")
requested authorization from the Securities and Exchange
Commission ("Commission"), among other things, to refund
outstanding Secured Lease Obligation Bonds issued in 1989 in
connection with the sale and leaseback of undivided interests
in Grand Gulf 1 by causing a funding corporation or
comparable entity to issue one or more new series of its
Secured Lease Obligation Bonds in an aggregate principal
amount not to exceed $456,857,100 ("Refunding Bonds"). By
notice dated July 2, 1993 (Holding Company Act Rel.
No. 25844), the Commission authorized the Company to
undertake negotiations with respect to, among other things,
the proposed issuance and sale of the Refunding Bonds.
Pursuant to such notice, the Company has engaged in and has
now concluded negotiations for the proposed issuance and sale
of two new series of Refunding Bonds ("New Refunding Bonds"),
in an aggregate principal amount of $435,102,000, in a
negotiated public offering through Morgan Stanley & Co.
Incorporated, Bear Stearns & Co. Inc. and Goldman, Sachs &
Co. ("Underwriters").
"The New Refunding Bonds will be issued by a new funding
corporation, GG1B Funding Corporation ("New Funding
Corporation"), pursuant to a new Collateral Trust Indenture,
as amended by Supplemental Indenture No. 1 thereto, among New
Funding Corporation, the Company and Bankers Trust Company as
Trustee. The New Refunding Bonds will consist of two series:
the Secured Lease Obligation Bonds, 7.43% Series due 2011, to
be issued in an aggregate principal amount of $356,056,000
(the "2011 Bonds"), and the Secured Lease Obligation Bonds,
8.20% Series due 2014, to be issued in an aggregate principal
amount of $79,046,000 (the "2014 Bonds"). Both series of the
New Refunding Bonds will bear interest from the date of
issuance at the rates stated in their respective titles,
payable on July 15 and January 15 of each year, commencing
July 15, 1994, and will mature on January 15 in the years
stated in their respective titles. The Company will arrange
for the payment of underwriting commissions of .750% of the
principal amount of the 2011 Bonds ($2,670,420) and .875% of
the principal amount of the 2014 Bonds ($691,652), for a
total of $3,362,072. The effective interest cost of the 2011
Bonds is 7.536% per annum, and the effective interest cost of
the 2014 Bonds is 8.292% per annum.
"The Underwriters have advised the Company that they
propose to offer all or part of the New Refunding Bonds
directly to the public at the public offering price of 100%
of the principal amount thereof (plus accrued interest, if
any, from the date of issuance), that they propose to offer
all or part of the New Refunding Bonds to certain dealers at
a price which represents a concession of .45% (in the case of
the 2011 Bonds) and .50% (in the case of 2014 Bonds) of the
principal amount under the public offering price, and that
the Underwriters may allow and such dealers may reallow a
concession, not in excess of .25% (in the case of the 2011
Bonds) and .25% (in the case of the 2014 Bonds) of the
principal amount, to certain other dealers and brokers.
"The New Refunding Bonds will be subject to periodic
principal installment payments which will result in the
repayment of 100% of the principal amount by January 15, 2011
in the case of the 2011 Bonds and by January 15, 2014 in the
case of the 2014 Bonds. On each installment payment date set
forth below, the New Funding Corporation will pay an
installment of principal of each New Refunding Bond of each
series equal in amount (subject to adjustment in certain
circumstances) to the variable installment payment percentage
(set forth below and in the Collateral Trust Indenture, as
supplemented) for such series for such date, multiplied by
the original principal amount of such New Refunding Bond.
Installment Payment Installment Payment Percentage
Date 2011 Bonds 2014 Bonds
July 15, 1995.............. 1.4675456% -
July 15, 1996.............. 2.8658604 -
July 15, 1997.............. 3.0787941 -
January 15, 1998........... 2.7515896 -
July 15, 1998.............. 0.6581805 -
January 15, 1999........... 2.9639208 -
July 15, 1999.............. 0.7070832 -
January 15, 2000........... 3.2327951 -
July 15, 2000.............. 0.6048021 -
January 15, 2001........... 5.4591407 -
January 15, 2002........... 7.9291912 -
January 15, 2003........... 6.9943107 -
January 15, 2004........... 3.5119740 -
January 15, 2005........... 8.0857947 -
January 15, 2006........... 6.4564431 -
January 15, 2007........... 6.5538376 -
January 15, 2008........... 7.4992341 -
January 15, 2009........... 7.9875859 -
January 15, 2010........... 11.7157832 -
January 15, 2011........... 9.4761335 -
January 15, 2012........... - 10.5577562%
January 15, 2013........... - 38.6912684
January 15, 2014........... - 50.7509754
"The New Refunding Bonds are subject to redemption upon
certain terminations of the Leases at a redemption price
equal to the unpaid principal amount thereof plus accrued
interest to the redemption date.
"Except in the above circumstances, the New Refunding
Bonds will not be subject to prepayment or redemption prior
to January 15, 2004. On and after January 15, 2004, the New
Refunding Bonds will be subject to redemption, at the option
of the New Funding Corporation, in whole at any time or in
part from time to time at the redemption prices (expressed as
a percentage of unpaid principal amount, beginning at
102.477% in the 12-month period beginning January 15, 2004
and decreasing to 100% in the 12-month period beginning
January 15, 2009 in the case of the 2011 Bonds, and beginning
at 104.100% in the 12-month period beginning January 15, 2004
and decreasing to 100.410% in the 12-month period beginning
January 15, 2013 in the case of the 2014 Bonds) set forth
below plus accrued interest to the date of redemption:
2011 Bonds
If redeemed in the 12-month
period beginning January 15 Redemption Price
2004....................... 102.477
2005....................... 101.981
2006....................... 101.486
2007....................... 100.991
2008....................... 100.495
2009....................... 100.000
2010....................... 100.000
2014 Bonds
If redeemed in the 12-month
period beginning January 15 Redemption Price
2004....................... 104.100
2005....................... 103.690
2006....................... 103.280
2007....................... 102.870
2008....................... 102.460
2009....................... 102.050
2010....................... 101.640
2011....................... 101.230
2012....................... 100.820
2013....................... 100.410
Reference is made to Exhibits A-3(c) and A-3(d) hereto for
further information with respect to the terms of the New
Refunding Bonds.
"The proceeds to be received from the issuance and sale
of the New Refunding Bonds will be used to refund the Secured
Lease Obligation Bonds issued in 1989. None of such proceeds
will be used to invest at directly or indirectly in an exempt
wholesale generator ("EWG") or foreign utility company, as
defined in Section 32 or 33, respectively, of the Holding
Company Act. The Company will not use any savings derived
from the refunding transaction to acquire or otherwise invest
in an EWG.
"Entergy Corporation, through its subsidiaries, Entergy
Power Development Corporation and Entergy Richmond Power
Corporation, has a 50% interest in a limited partnership,
Richmond Power Enterprises L.P. ("Richmond"), that owns a 250
MW gas-fired combined cycle independent power plant in
Richmond, Virginia that has been certified by the Federal
Energy Regulatory Commission as an EWG. At September 30,
1993, the Entergy System's investment (including equity
investment and other contingent obligations) in Richmond was
$12.675 million, which represents less than 1% of Entergy's
predecessor corporation's total consolidated assets of
$15.463 billion, and less than 1% of Entergy's predecessor
corporation's consolidated retained earnings of $2.366
billion. At September 30, 1993, the equity investment in
this project was $12.5 million, compared to Entergy's
predecessor corporation's total consolidated common stock
equity of $4.562 billion. Richmond had revenues of $27.223
million and earnings of $1.743 million for the nine-month
period ended September 30, 1993."
Item 2. Fees, Commissions and Expenses.
Reference is made to Item 14 of Exhibit C-1 in this proceeding for
information with respect to the estimated fees and expenses (exclusive
of underwriting discounts and commissions) in connection with the
issuance and sale of New Refunding Bonds.
Item 5. Procedure.
The Company hereby requests that the Commission issue a further
supplemental order herein as soon as practicable, but in any event no
later than January 14, 1994, approving the proposed terms and
conditions of the sale of the New Refunding Bonds, and the related
fees, commissions, and expenses, and releasing jurisdiction over the
same.
The Company waives a recommended decision by a hearing officer or
any other responsible officer of the Commission; agrees that the Staff
of the Division of Investment Management may assist in the preparation
of the Commission's decision; and requests that there be no waiting
period between the issuance of the Commission's supplemental order and
the date on which it is to become effective.
Item 6. Exhibits and Financial Statements.
(a) Exhibits:
A-3(c) Revised form of Collateral Trust Indenture.
A-3(d) Revised form of Supplemental Indenture No. 1 to
Collateral Trust Indenture.
B-3(c) Revised form of Lease Supplement No. 2 to Facility
Lease No. 1.
B-4(c) Revised form of Lease Supplement No. 2 to Facility
Lease No. 2.
B-7(c) Revised form of Supplemental Indenture No. 2 to
Trust Indenture, Deed of Trust, Mortgage, Security
Agreement and Assignment of Facility Lease No. 1.
B-8(c) Revised form of Supplemental Indenture No. 2 to
Trust Indenture, Deed of Trust, Mortgage, Security
Agreement and Assignment of Facility Lease No. 2.
B-9 Revised form of Underwriting Agreement.
B-10(a) Revised form of Refunding Agreement No. 1-A.
B-11(a) Revised form of Refunding Agreement No. 2-A.
B-12 Form of Amendment No. 1 to Tax Indemnity
Agreements.
F Opinion of Reid & Priest, counsel for System
Energy.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned company has duly caused this
amendment to be signed on its behalf by the undersigned thereunto duly
authorized.
SYSTEM ENERGY RESOURCES, INC.
By: /s/ Lee W. Randall
Lee W. Randall
Vice President and Chief
Accounting Officer
Date: January 13, 1994
Exhibit A-3(c)
COLLATERAL TRUST INDENTURE
dated as of January 1, 1994
AMONG
GG1B FUNDING CORPORATION,
SYSTEM ENERGY RESOURCES, INC.
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
Sale and Leaseback of Two Undivided Interests in
Grand Gulf Nuclear Station Unit No. 1
<PAGE>
GG1B FUNDING CORPORATION
SYSTEM ENERGY RESOURCES, INC.
Reconciliation and tie between Indenture
dated as of January 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
____________________
Note: This reconciliation and tie shall not, for any purpose, be
deemed to constitute a part of the Indenture.
<PAGE>
COLLATERAL TRUST INDENTURE
Collateral Trust Indenture, dated as of January 1, 1994, among
GG1B Funding Corporation, a Delaware corporation (the "Company"),
having its principal office and mailing address at Corporation Trust
Center, 1209 Orange Street, Wilmington, Delaware 19801, System
Energy Resources, Inc., an Arkansas corporation ("SERI"), having its
principal office and mailing address at Echelon One, 1340 Echelon
Parkway, Jackson, Mississippi 39213 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 debentures, 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 Notes (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 Notes.
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 SERI, the board of directors of SERI, 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 SERI, 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, NY 10015, Attention:
Corporate Trust & Agency Group, or such other office as may be
designated by the Trustee to the Company, SERI and each
Securityholder.
"Event or 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 Notes and
addressed to the Trustee by the parties to the Participation
Agreement (other than the Original Loan Participants named therein)
in accordance with which such series of Pledged Lessor Notes was
issued, extending to the Trustee the representations, warranties and
covenants of such parties (other than each Owner Participant)
referred to in Section 11(c) of such Participation Agreement, and in
the case of each Owner Participant, the representations, warranties
and agreements set forth in Sections 2(b) and 2(c) of the Assignment
and Assumption Agreement entered into by each such Owner Participant
pursuant to Section 15(c) of the Participation Agreement in
connection with the transfer of the Original Owner Participant's
beneficial interest in the Trust Estate (as such term is defined in
the 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.
"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 Note" means any promissory note 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 crested,
constituting 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 SERI and any successor to the obligations of SERI
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 SERI as an Obligor herein shall be construed as implying
any guaranty or assumption of the Securities or the obligations repre
sented thereby by SERI.
"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 SERI, 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 SERI, 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 cancelled 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 SERI, 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 SERI, 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 Note" means each Lessor Note identified in a
schedule to a Series Supplemental Indenture, as such Lessor Note 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 Notes" means each and every Pledged
Lessor Note.
"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 Notes, 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 1st day (whether or
not a Business Day) of 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 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.
"SERI" shall mean System Energy Resources, Inc., an Arkansas
corporation, and its permitted successors and assigns.
"SERI Request" means a written request or order, signed in the
name of SERI 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 SERI, 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
Notes 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
SERI to the Trustee to take any action under any provision of this
Indenture, the Company, such Lessor or SERI, 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 herein 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 SERI 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 SERI, 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 SERI, 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 an 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 SERI. 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 SERI, 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 SERI.
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 SERI 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 SERI 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 SERI by the Company for such
purpose, or
(c) SERI 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 SERI 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 SERI 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, SERI 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 authenti
cated 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 Notes (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
Notes 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 accordance 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 by one of its
Responsible Officers, 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 Notes relating to the Securities of such
series and (ii) the Leases relating to such Pledged Lessor
Notes;
(d) the originals of the Pledged Lessor Notes relating to
the Securities of such series in an aggregate principal amount
not less than the aggregate principal amount of such series of
Securities proposed to be authenticated and delivered;
(e) signed copies, either addressed to the Trustee or
accompanied by statements that the Trustee may rely on such
documents, of all certificates and opinions of counsel
delivered (i) to the Company in connection with its purchase of
the Pledged Lessor Notes 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
Notes, and, to the extent not covered by such opinions.
Opinions of Counsel to the Company or SERI (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,
Arkansas and Mississippi 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 Notes; and
(g) in circumstances where the Pledged Lessor Notes
relating to such series of Securities are executed and
delivered for the purposes described in clause (ii) of
paragraph (1) of Section 3.5 of any Lease Indenture, (i) a
certificate of an independent public accountant acceptable to
the Trustee (who shall not be an employee of the Company, or
SERI 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
Notes and (ii) a certificate of an independent engineer,
appraiser or other expert acceptable to the Trustee (who may be
an officer or employee of SERI 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 Notes.
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 many 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 authenti
cate 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
SERI (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 SERI 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 Note 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, SERI 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 cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled
as provided in this Section, except as expressly permitted by this
Indenture. All Securities cancelled 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
Notes 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 Notes,
each such Lease Indenture Trustee to receive an amount equal to the
aggregate principal amount of such Pledged Lessor Notes.
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
shall 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 Notes 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 Notes or by other appropriate means all payments
of principal, premium, if any, and interest made on the Pledged
Lessor Notes.
Section 3.03. Exercise of Rights and Powers Under Pledged Lessor
Notes and Lease Indentures.
The Trustee shall not take any action as the holder of the
Pledged Lessor Notes to direct any Lease Indenture Trustee in any
respect or to vote any Pledged Lessor Note 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 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 Notes, 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 Notes have the
option to direct and (b) how to vote any Pledged Lessor Note 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 Note, the Trustee shall specify to the related Lease
Indenture Trustee the principal amount of the Pledged Lessor Note
which is in favor of the action or vote, the principal amount of the
Pledged Lessor Note which is opposed to the action or vote, and the
principal amount of the Pledged Lessor Note 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 Notes 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. In addition, the Trustee
shall certify to the Lease Indenture Trustee that the principal
amounts of Securities taking such corresponding positions or not
taking any position were determined in accordance with the provisions
of this Indenture.
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 Notes 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.
Section 3.06. Substituted Lessee.
No Person shall be substituted as lessee under a Lease pursuant
to Section 6.8(c) of a Lease Indenture unless (i) the same Person is
substituted as lessee under each Lease pursuant to that Section
6.8(c), and (ii) such Person assumes all of SERI's obligations
hereunder. If any Person is substituted as lessee in accordance with
the preceding sentence, SERI shall be deemed to be released and
discharged from any further obligation hereunder upon the assumption
by such Person of SERI's obligations hereunder.
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 Notes upon Payment.
Upon receipt of payment in full of the principal of and
premium, if any, and interest on any Pledged Lessor Note held by the
Trustee, the Trustee shall deliver to the Company said Pledged Lessor
Note and any instrument of transfer or assignment necessary to
reassign to the Company said Pledged Lessor Note 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 Note 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 three 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 SERI 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 SERI 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 SERI 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 effectiveness 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 SERI and the Company shall deliver to the
Trustee, on or before 120 days after the end of each of its
fiscal years, a written statement (which need not comply with
Section 1.02) signed by its President or one of its Vice
Presidents and by its Treasurer or one of its Assistant
Treasurers or its Comptroller or one of its Assistant
Comptroller, stating, as to each signer thereof, that
(i) a review of the activities of SERI or the Company, as
the case may be, required during such year of SERI or the
Company, as the case may be, under this Indenture has been made
under their supervision; and
(ii) to the best of their knowledge, based on such review,
SERI or the Company, as the case may be, has fulfilled all its
obligations under this Indenture throughout such year, or, if
there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer
and the nature and status thereof.
(b) Each of SERI 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.
SERI 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, SERI or any Affiliate of either of them)
delivered to any Lease Indenture Trustee pursuant to Section 2.4(c)
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 Section 2.1 of any Lease Indenture of a portion
of the Lease Indenture Estate (as defined in such Lease Indenture)
pursuant to Section 2.3 of such Lease Indenture, at its own expense
SERI 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 of 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 SERI to terminate a Lease pursuant to Section 13(f) or
(g) or Section 14 thereof, or Section 10(b)(3)(ix) 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
SERI to assume the Lessor Notes 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 10(b)(3)(ix) of the
related Participation Agreement, and all Lessor Notes 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 Notes 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
Notes plus any accrued interest to the Redemption Date, such
redemption of Securities to be made on the date on which such Lessor
Notes 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 fo 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 except as
otherwise specified in the Series Supplemental Indenture creating such
series; provided, however, that if the Company, SERI 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 SERI Order, as the case may be, shall
first select such Securities for redemption. Any such Company Order
or SERI Order shall state that such redemption is in accordance with
Section 10(b)(3)(vi) 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 10(b)(3)(ix) of the
related Participation Agreement, and the Lessor Notes 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 therefore (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 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 SERI 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 SERI, as the case may be, by the
Trustee, or to the Company or SERI, 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 SERI, 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 Notes 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
SERI, 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 SERI 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 6.8 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
Notes 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 Notes, shall direct the Lease Indenture
Trustee under such Lease Indenture to rescind and annul such
acceleration of such Pledged Lessor Notes 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
Notes, 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 of or all the Pledged Property in accordance with the provisions
of this Section, the Company and SERI 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 or other
applicable law, and regulations promulgated thereunder, and if SERI
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
acceleration 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 Securityholders 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, SERI 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 Notes 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 enforcement 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 known to the Trustee to be owned or held by, or
for the account or benefit of, the Company, SERI, 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
SERI, 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 SERI 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 SERI
mentioned herein shall be sufficiently evidenced by a Company
Request or Company Order, or a SERI Request or SERI Order, in
the case of a request or direction of either the Company or
SERI, as the case may be, and any resolution of the Board of
Directors of the Company or SERI may be sufficiently evidenced
by a Board Resolution of the Company or SERI, 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 SERI;
(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 reasonable security or indemnity against the costs,
expenses and liabilities which might 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 SERI, personally or by agent or attorney at
the sole cost and expense of the Company or SERI, 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 SERI,
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 SERI 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 SERI shall be liable, jointly and
severally, to:
(a) pay, or cause to be paid, to each of the Trustee and
any Authorized Agent 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 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 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 SERI. If an instrument of
acceptance by a successor Trustee shall not have been delivered to
the Company, SERI 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 Act of the
Holders of a majority in principal amount of the Outstanding
Securities, delivered to the Trustee, the Company and SERI.
(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,
SERI 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) SERI, 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, SERI, 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, SERI
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
SERI. If no successor Trustee shall have been so appointed by SERI,
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, SERI 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, SERI 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 authenticated 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 Trustee 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 and 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 SERI, (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, SERI and the Company.
The Company may, and at the request of the Trustee or SERI 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 SERI 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 SERI 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 SERI 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 SERI or the
Company; and SERI 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) SERI, 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 SERI, 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 SERI 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 SERI
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 SERI, 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 SERI
Section 10.01. SERI to Furnish Trustee Names and Addresses of
Holders
Semiannually, not later than March 31 and September 30 in each
year, commencing March 31, 1994 and at such other times as the
Trustee may request in writing, SERI 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 SERI.
Section 10.02. Reports by Trustee and SERI.
If required by Section 313 (a) of the Trust Indenture Act,
within thirty days after December 1 in each year commencing
December 1, 1994, 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 SERI
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, SERI,
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
SERI and the assumption by any such successor of the covenants
of SERI 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 SERI, 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 SERI; 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 Notes 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, SERI 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, SERI 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, SERI and the Trustee, the Company and
SERI, 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 SERI 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 SERI, bear a notation
in form approved by such Lessor, the Company, SERI 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 SERI shall so determine, new Securities so modified as to
conform, in the opinion of such Owner Trustee, the Company, SERI 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 Notes, 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 2.4(c) of the Lease Indenture or Lease
Indentures under which such Pledged Lessor Notes 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 Notes are so deemed to have
been paid, a copy of each certificate or opinion delivered to
the Lease Indenture Trustees pursuant to Section 2.4(c) 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 Notes 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, SERI 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 Notes.
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 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 SERI, at any other
place. Notice of every such meeting, shall be given to the Company
SERI, 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 18 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 SERI 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, SERI 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 SERI, 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, SERI 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, SERI 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, SERI, 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, SERI 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 SERI, 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 SERI
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 seccessor corportion (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 penatly 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 agrements
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 SERI.
In no event shall any provision of this Indenture or the
Securities constitute a guaranty or assumption by SERI of the
Securities or the indebtedness represented thereby (it being
understood that, in accordance with Section 3.9 of each Lease
Indenture or Section 7(b)(4)(H) of the Participation Agreement, SERI
may assume, or be deemed to have assumed, the Pledged Lessor Notes).
_____________
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.
<PAGE>
In Witness Whereof, the parties have caused this Indenture to
be duly executed as of the day and year first above written.
GG1B Funding Corporation
By: _______________________________________
Title: Vice President
<PAGE>
System Energy Resources, Inc.
By: ____________________________________
Title: Vice President and Treasurer
<PAGE>
Bankers Trust Company, not in its individual
capacity but solely as Trustee
By: _____________________________________
Title: Vice President
<PAGE>
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 GG1B 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:
_______________________________
<PAGE>
State of Mississippi )
) ss.:
County of Hinds )
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 and the Treasurer of System
Energy Resources, Inc., an Arkansas 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:
_____________________________
<PAGE>
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 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:
_____________________________
<PAGE>
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 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:
_____________________________
<PAGE>
EXHIBIT A
IDENTIFICATION OF CERTAIN DOCUMENTS
AND PARTIES THERETO
PART I
Lease _ Facility Lease No. 1, dated as of December 1, 1988, as
amended and supplemented, between SERI and the Owner Trustee, as
Lessor (a "Lessor").
Lease Indenture _ Trust Indenture, Deed of Trust, Mortgage,
Security Agreement and Assignment of Facility Lease No. 1, dated as
of December 1, 1988, 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 _ Meridian Trust Company and Stephen J. Kaba
(successor to Stephen M. Carta) as trustees under Trust Agreement No.
1, dated as of December 1, 1988, with Resources Capital Management
Corporation (an "Owner Participant") as successor in interest to
Public Service Resources Corporation.
Participation Agreement _ Participation Agreement No. 1, dated
as of December 1, 1988, among the Owner Participant, the Original
Loan Participants named in Schedule 1-B thereto, Meridian Trust
Company and Stephen J. Kaba (successor to Stephen M. Carta),
individually and as Owner Trustee, Bankers Trust Company and Stanley
Burg, individually and as Indenture Trustee, and SERI.
PART II
Lease _ Facility Lease No. 2, dated as of December 1, 1988, as
amended and supplemented, between SERI and the Owner Trustee, as
Lessor (a "Lessor").
Lease Indenture _ Trust Indenture, Deed of Trust. Mortgage,
Security Agreement and Assignment of Facility Lease No. 2, dated as
of December 1, 1988, as amended and supplemented ("Lease Indenture
No. 2"), between the Owner Trustee and Bankers Trust Company and
Stanley Burg, as trustees (together, a "Lease Indenture Trustee").
Owner Trustee _ Meridian Trust Company and Stephen J. Kaba
(successor to Stephen M. Carta) as trustees under Trust Agreement No.
2, dated as of December 1, 1988, with Textron Financial Corporation
(an "Owner Participant") as successor in interest to Lease Management
Realty Corporation IV.
Participation Agreement _ Participation Agreement No. 2, dated
as of December 1, 1988, among the Owner Participant, the Original
Loan Participants named in Schedule l-B thereto, Meridian Trust
Company and Stephen J. Kaba (successor to Stephen M. Carta),
individually and as Owner Trustee, Bankers Trust Company and Stanley
Burg, individually and as Indenture Trustee, and SERI.
Exhibit A-3(d)
SUPPLEMENTAL INDENTURE NO. 1
dated as of January 1, 1994
to
COLLATERAL TRUST INDENTURE
dated as of January 1, 1994
among
GG1B FUNDING CORPORATION,
SYSTEM ENERGY RESOURCES, INC.
and
BANKERS TRUST COMPANY,
not in its individual capacity
but solely as Trustee
<PAGE>
SUPPLEMENTAL INDENTURE NO. 1, dated as of
January 1, 1994, among GG1B Funding Corporation, a Delaware
corporation (the "Company"), SYSTEM ENERGY RESOURCES, INC., an
Arkansas corporation ("SERI"), 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 SERI have heretofore executed
and delivered to the Trustee a Collateral Trust Indenture, dated
as of January 1, 1994 (the "Original Indenture"), to provide for
the issue from time to time of the Company's debentures, 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, SERI 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 SERI (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 SERI
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 SERI 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, "Secured Lease
Obligation Bonds, ____% Series due ____" (hereinafter sometimes
called the "Series _____ Bonds") and "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 Rate Maturity
Amount
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 January 15 and July 15
in each year (commencing July 15, 1994), until the principal
amount of the Bonds of such series is paid in full or duly
provided for. The interest so payable shall be paid to the
person in whose name a Bond is registered at the close of
business on the Regular Record Date for such interest, which, for
each applicable interest payment date, shall be the January 1 (in
respect of a January 15 interest payment date) or July 1 (in
respect of a July 15 interest payment date), as the case may be
(whether or not a Business Day), next preceding such interest
payment date.
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 ____ Bonds
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
(b) Certain Adjustments to Installment Payments.
(i) The principal amount of Bonds of either series to be paid in
installments on the Installment Payment Dates for such series may
be adjusted (an "Installment Payment Adjustment") at the
discretion 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 Notes of the
corresponding series issued under any Lease Indenture pursuant to
Section 2(b) of Supplemental Indenture No. 2 to such Lease
Indenture; provided, however, that (A) no Installment 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(e) of the Participation Agreement. If the Company
shall elect to make the foregoing adjustment, the Company shall
deliver to the Trustee and SERI at least 30 days prior to the
first Installment Payment Date proposed to be affected by such
adjustment, a Company Request (A) stating that the Company has
elected to make an Installment Payment Adjustment as contemplated
in this Section, (B) setting forth a revised Installment Payment
Percentage Schedule applicable to the Bonds of each series as to
which an Installment Payment Adjustment is to be made,
(C) attaching a copy of the revised principal schedule or
schedules for the Pledged Lessor Notes 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 Notes
identified on Schedule 1 hereto equals the aggregate principal
amount of the Bonds and (z) the principal amortization schedules
of such Pledged Lessor Notes 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. The
Trustee shall, at the expense of SERI, send to each Holder of
Bonds of the series in respect of which an Installment Payment
Adjustment has been made at least 20 days before the first
Installment Payment Date to be affected thereby, by first class
mail, a copy of a schedule of principal amounts of Bonds to be
repaid upon payment of applicable Installment Payment Amounts on
Installment Payment Dates after giving effect to such Installment
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
Notes to be paid on such date under the remaining Lease
Indenture, any such reduction to be made on a prorata 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 10(b)(3)(ix) of the related Participation Agreement, and
all Lessor Notes issued under the related Lease Indenture are to
be prepaid, Bonds, equal in principal amount to the Pledged
Lessor Notes 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 SERI to assume such
Lessor Notes 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.
Except as provided in Sections 1.02, 1.03 or 1.04, the
Bonds shall not be subject to prepayment or redemption prior to
_______________. On and after _______________, 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 Prices (expressed as a percentage of the unpaid
principal amount) set forth below with respect to each series
plus accrued interest to the Redemption Date:
<PAGE>
SERIES _____ BONDS
If Redeemed in the
12 Month Period Redemption
Beginning January 15 Price
and thereafter at 100% of the unpaid principal amount thereof.
SERIES ____ BONDS
If Redeemed in the
12 Month Period Redemption
Beginning January 15 Price
and thereafter at 100% of the unpaid principal amount thereof.
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 NOTES
Section 2.01. Pledge of Lessor Notes.
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 Notes identified on
Schedule 1 hereto (herein referred to as the "Pledged Lessor
Notes"), 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.
<PAGE>
IN WITNESS WHEREOF, the Company, SERI and the Trustee
have caused this Supplemental Indenture No. 1 to be duly executed
as of the day and year first above written.
GG1B FUNDING CORPORATION
By _____________________________
Title: Vice President
<PAGE>
SYSTEM ENERGY RESOURCES, INC.
By __________________________
Title: ______________________
<PAGE>
BANKERS TRUST COMPANY, not in its
individual capacity but solely
as Trustee
By_________________________________
Title: Vice President
<PAGE>
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
GG1B 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:
_________________________
<PAGE>
STATE OF MISSISSIPPI)
)ss.:
COUNTY OF HINDS )
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 ______________________
_________ of SYSTEM ENERGY RESOURCES, INC., an Arkansas
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:
_____________________________
<PAGE>
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:
_____________________________
<PAGE>
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:
_____________________________
<PAGE>
SCHEDULE 1
PLEDGED LESSOR NOTES
Lessor Notes Issued Under Lease Indenture No. 1
Principal Interest
Series Number Amount Rate Maturity
Lessor Notes Issued Under Lease Indenture No. 2
Principal Interest
Series Number Amount Rate Maturity
<PAGE>
EXHIBIT A
FORM OF BOND
[FRONT]
NUMBER
R-
________________________
SECURED LEASE OBLIGATION BOND,
% SERIES DUE
INTEREST RATE MATURITY DATE CUSIP
%
REGISTERED HOLDER:
ORIGINAL PRINCIPAL AMOUNT:DOLLARS
GG1B 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 July 15,
1994, the date of the original issuance of Bonds of this series,
semiannually on January 15 and July 15 in each year, commencing
July 15, 1994, 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
January 1 (with respect to a January 15 interest payment date) or
July 1 (with respect to a July 15 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.
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.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Bond to
be duly executed under its corporate seal.
Dated:
GG1B 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 __________________________
<PAGE>
[BACK]
GG1B FUNDING CORPORATION
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 January
1, 1994 (the "Original Indenture"), among the Company, System
Energy Resources, Inc., an Arkansas corporation ("System
Energy"), 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
January 1, 1994, 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 notes
("Pledged Lessor Notes") are subject to the lien of the Indenture
and that additional Pledged Lessor Notes, as and when issued, can
be made subject to the lien of the Indenture pursuant to
Indenture supplements. The Pledged Lessor Notes subject to the
lien of the Indenture on the date of the initial issuance of
Bonds were issued by Meridian Trust Company, as owner trustee
under each of Trust Agreement No. 1 and Trust Agreement No. 2
(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 Notes were issued
under either Trust Indenture, Deed of Trust, Mortgage, Security
Agreement and Assignment of Facility Lease No. 1 or Trust
Indenture, Deed of Trust, Mortgage, Security Agreement and
Assignment of Facility Lease No. 2, 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 Notes. Except as
expressly provided in a Lease Indenture, all payments of
principal, premium, if any, and interest to be made on a Pledged
Lessor Note 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
System Energy relating to an undivided interest in certain assets
constituting part of the Grand Gulf Nuclear Station Unit No. 1
(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
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
<PAGE>
Installment Installment Outstanding
Payment Date Payment Percentage Balance Factor
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
January 15,
July 15,
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 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 installment
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 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 10(b)(3)(ix) of the related Participation Agreement, and
all Lessor Notes issued under the related Lease Indenture are to
be prepaid, Bonds, equal in principal amount to the Pledged
Lessor Notes 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 System Energy to assume
such Lessor Notes in which event there shall be no redemption of
Bonds as a consequence of such termination.
Except as described above, the Bonds shall not be
subject to prepayment or redemption prior to ______________. On
and after ______________, the Bonds 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 Prices (expressed as
a percentage of the unpaid principal amount) set forth below plus
accrued interest to the redemption date:
If Redeemed in the
Twelve Month Period
Beginning January 15 Redemption Price
and thereafter at 100% of the unpaid principal amount thereof.
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.
Exhibit B-3(c)
CERTAIN RIGHTS OF THE LESSOR UNDER THE FACILITY LEASE AS
SUPPLEMENTED BY THIS LEASE SUPPLEMENT NO. 2 HAVE BEEN ASSIGNED
TO, AND ARE SUBJECT TO A SECURITY INTEREST IN FAVOR OF THE
INDENTURE TRUSTEE UNDER TRUST INDENTURE, DEED OF TRUST, MORTGAGE,
SECURITY AGREEMENT AND ASSIGNMENT OF FACILITY LEASE NO. 1, DATED
AS OF DECEMBER 1, 1988, AS SUPPLEMENTED. THIS LEASE SUPPLEMENT
NO. 2 HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS. SEE SECTION 3(c)
OF THIS LEASE SUPPLEMENT NO. 2 FOR INFORMATION CONCERNING THE
RIGHTS OF HOLDERS OF VARIOUS COUNTERPARTS HEREOF.
THIS COUNTERPART IS NOT THE ORIGINAL COUNTERPART.
LEASE SUPPLEMENT NO. 2
dated as of January 1, 1994
to
FACILITY LEASE NO. 1
dated as of December 1, 1988,
as supplemented,
between
MERIDIAN TRUST COMPANY
and STEPHEN J. KABA
not in their individual capacities,
but solely as Owner Trustee under
Trust Agreement No. 1
dated as of December 1, 1988,
with Resources Capital Management Corporation,
as successor in interest to
Public Service Resources Corporation,
Lessor
and
SYSTEM ENERGY RESOURCES, INC.,
Lessee
Original Facility Lease Recorded on December 28,
1988 at Deed Book Volume 12V,
Page 408 Claiborne County,
Mississippi, Chancery Clerk's Office
<PAGE>
CERTAIN RIGHTS OF THE LESSOR UNDER THE FACILITY LEASE
AS SUPPLEMENTED BY THIS LEASE SUPPLEMENT NO. 2 HAVE BEEN ASSIGNED
TO, AND ARE SUBJECT TO A SECURITY INTEREST IN FAVOR OF THE
INDENTURE TRUSTEE UNDER TRUST INDENTURE, DEED OF TRUST, MORTGAGE,
SECURITY AGREEMENT AND ASSIGNMENT OF FACILITY LEASE NO. 1, DATED
AS OF DECEMBER 1, 1988, AS SUPPLEMENTED. THIS LEASE SUPPLEMENT
NO. 2 HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS. SEE SECTION 3(c)
OF THIS LEASE SUPPLEMENT NO. 2 FOR INFORMATION CONCERNING THE
RIGHTS OF HOLDERS OF VARIOUS COUNTERPARTS HEREOF.
THIS COUNTERPART IS THE ORIGINAL COUNTERPART. RECEIPT OF THIS
ORIGINAL COUNTERPART IS HEREBY ACKNOWLEDGED BY BANKERS TRUST
COMPANY, AS CORPORATE INDENTURE TRUSTEE.
By:___________________________
Authorized Officer
LEASE SUPPLEMENT NO. 2
dated as of January 1, 1994
to
FACILITY LEASE NO. 1
dated as of December 1, 1988,
as supplemented,
between
MERIDIAN TRUST COMPANY
and STEPHEN J. KABA
not in their individual capacities, but solely as
Owner Trustee under Trust Agreement No. 1,
dated as of December 1, 1988,
with Resources Capital Management Corporation,
as successor in interest to
Public Service Resources Corporation,
Lessor
and
SYSTEM ENERGY RESOURCES, INC.,
Lessee
Original Facility Lease Recorded on December 28,
1988 at Deed Book Volume 12V,
Page 408; Claiborne County,
Mississippi, Chancery Clerk's Office
<PAGE>
LEASE SUPPLEMENT NO. 2, dated as of January 1, 1994
("Lease Supplement No. 2"), to FACILITY LEASE NO. 1, dated as of
December 1, 1988, as supplemented (the "Facility Lease"), between
MERIDIAN TRUST COMPANY, a Pennsylvania trust company, not in its
individual capacity, but solely as Corporate Owner Trustee and
STEPHEN J. KABA not in his individual capacity, but solely as
successor Individual Owner Trustee (together, 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 SYSTEM ENERGY RESOURCES, INC., an
Arkansas 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 and the Indenture Trustee have entered
into Refunding Agreement No. 1-A, dated as of January 1, 1994,
providing for the issuance by the Owner Trustee of a new series
of Fixed Rate Notes (the "Refunding Notes") to refund the
Outstanding Notes; and
WHEREAS, the Owner Trustee and the Indenture Trustee
have entered into Supplemental Indenture No. 2, dated as of
January 1, 1994, to the Indenture creating the Refunding Notes
for such purpose and establishing the terms, conditions and
designations thereof; 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 Refunding Notes;
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. Appendix A to the Lease is hereby amended such that
Funding Corporation, as defined therein shall mean GG1B Funding
Corporation.
SECTION 2. Amendments; Schedules.
(a) Section 3(h) of the Lease is hereby amended by
deleting such section in its entirety and substituting therefore
the following: "(h) Intentionally omitted."
(b) 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.
(c) Schedule PS to the Facility Lease is attached
hereto.
(d) Section 3(i) of the Facility Lease is amended by
inserting the following paragraph after Section 3(i)(D):
Nothing in this Section 3(i) is intended
to or shall create any right or entitlement
of the Lessee or any Person other than the
Owner Participant, contingent or otherwise,
in or to the proceeds of a drawing of the
Equity Portion of Rent under the Letter of
Credit.
SECTION 3. Miscellaneous.
(a) Counterpart Execution. This Lease Supplement No.
2 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. 2 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. 2, 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. 2.
(c) Original Counterpart. The single executed original
of this Lease Supplement No. 2 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. 2. To the extent that the Facility Lease, as
supplemented by this Lease Supplement No. 2, 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. 2 to be duly executed by an
officer thereunto duly authorized, as of the date set forth
above.
ATTEST: MERIDIAN TRUST COMPANY,
not in its individual
capacity but solely as
Corporate Owner Trustee
_______________________ By:_______________________
Name: Stephen J. Kaba
Title: Vice President
_________________________
Stephen J. Kaba, not in
his individual capacity
but solely as successor
Individual Owner Trustee
<PAGE>
ATTEST: SYSTEM ENERGY RESOURCES, INC.
____________________ By:______________________
Name:
Title:
<PAGE>
STATE OF NEW YORK )
COUNTY OF NEW YORK )
Personally appeared before me, the undersigned
authority in and for the said County and State, on this ____ day
of _________, 19__, within my jurisdiction, the within named
STEPHEN J. KABA, who acknowledged that he is a Vice President of
MERIDIAN TRUST COMPANY, a Pennsylvania trust company, Corporate
Owner Trustee under that certain Trust Agreement No. 1, dated as
of December 1, 1988 among Public Service Resources Corporation,
as Original Owner Participant, MERIDIAN TRUST COMPANY, as
Corporate Owner Trustee, and STEPHEN J. KABA, as successor
Individual Owner Trustee to the original Individual Owner
Trustee, Stephen M. Carta, and that for and on behalf of the said
trust company, and as its act and deed in said capacity as
Corporate Owner 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 trust company so to do.
___________________________________
Notary Public
My Commission Expires:
______________________
<PAGE>
STATE OF NEW YORK )
COUNTY OF NEW YORK )
Personally appeared before me, the undersigned
authority in and for the said County and State, on this ____ day
of _________, 19__, within my jurisdiction, the within named
STEPHEN J. KABA, who acknowledged that he is the successor
Individual Owner Trustee under that certain Trust Agreement No.
1, dated as of December 1, 1988 among Public Service Resources
Corporation, as Original Owner Participant, MERIDIAN TRUST
COMPANY, as Corporate Owner Trustee, and STEPHEN J. KABA, as
successor Individual Owner Trustee to the original Individual
Owner Trustee, Stephen M. Carta, and that in his capacity as
Individual Owner Trustee he executed the above and foregoing
instrument after first having been duly authorized to do so.
___________________________________
Notary Public
My Commission Expires:
_________________________
<PAGE>
STATE OF MISSISSIPPI)
) ss.:
COUNTY OF HINDS )
Personally appeared before me, the undersigned
authority in and for the said County and State, on this ____ day
of ____________, 19__, within my jurisdiction, the within named
_____ ______, who acknowledged that he is a
___________________________ of SYSTEM ENERGY RESOURCES, INC., an
Arkansas 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:
_________________________
<PAGE>
SCHEDULE 1
TO
LEASE SUPPLEMENT NO. 2
BASIC RENT PERCENTAGES
Basic Rent Advance/ Percentage of Basic Rent Advance/ Percentage of
Payment Arrears Facility Cost Payment Date Arrears Facility Cost
Date
<PAGE>
SCHEDULE 2
TO
LEASE SUPPLEMENT NO. 2
SCHEDULE OF CASUALTY VALUES
If the event giving rise to an obligation to pay Casualty
Value occurs and the actual date as of which the Owner
Participant shall incur Federal income tax consequences shall be
earlier or later than the date assumed in originally calculating
the applicable Casualty Value, such value shall be appropriately
adjusted, based upon the date as of which the Owner Participant
incurred such tax consequences but otherwise on the Assumptions
used to calculate the following values.
Basic Rent Percentage of Basic Rent Percentage of
Payment Date Facility Cost Payment Date Facility Cost
<PAGE>
ADDENDUM TO
SCHEDULE 2 OF LEASE
The foregoing Casualty Values are comprised of the following two
components:
Accrued Accrued
Date Loss Value Rent Date Loss Value Rent
<PAGE>
SCHEDULE 3
TO
LEASE SUPPLEMENT NO. 2
SCHEDULE OF SPECIAL CASUALTY VALUES
If the event giving rise to an obligation to pay Special
Casualty Value occurs and the actual date as of which the Owner
Participant shall incur Federal income tax consequences shall be
earlier or later than the date assumed in originally calculating
the applicable Special Casualty Value, such value shall be
appropriately adjusted, based upon the date as of which the Owner
Participant incurred such tax consequences but otherwise on the
Assumptions used to calculate the following values.
Basic Rent Percentage of Basic Rent Percentage of
Payment Date Facility Cost Payment Date Facility Cost
<PAGE>
ADDENDUM TO
SCHEDULE 3 OF LEASE
The foregoing Special Casualty Values are
comprised of the following two components:
Accrued Accrued
Date Loss Value Rent Date Loss Value Rent
<PAGE>
SCHEDULE 4
TO
LEASE SUPPLEMENT NO. 2
SCHEDULE OF NET CASUALTY VALUES
If the event giving rise to an obligation to pay Net
Casualty Value occurs and the actual date as of which the Owner
Participant shall incur Federal income tax consequences shall be
earlier or later than the date assumed in originally calculating
the applicable Net Casualty Value, such value shall be
appropriately adjusted, based upon the date as of which the Owner
Participant incurred such tax consequences but otherwise on the
Assumptions used to calculate the following values.
Basic Rent Percentage of Basic Rent Percentage of
Payment Date Facility Cost Payment Date Facility Cost
The Net Casualty Value on _______________, 19__ is
_________%.
<PAGE>
SCHEDULE 5
TO
LEASE SUPPLEMENT NO. 2
SCHEDULE OF NET SPECIAL CASUALTY VALUES
If the event giving rise to an obligation to pay Net Special
Casualty Value occurs and the actual date as of which the Owner
Participant shall incur Federal income tax consequences shall be
earlier or later than the date assumed in originally calculating
the applicable Net Special Casualty Value, such value shall be
appropriately adjusted, based upon the date as of which the Owner
Participant incurred such tax consequences but otherwise on the
Assumptions used to calculate the following values.
Basic Rent Percentage of Basic Rent Percentage of
Payment Date Facility Cost Payment Date Facility Cost
Exhibit B-4(c)
CERTAIN RIGHTS OF THE LESSOR UNDER THE FACILITY LEASE AS
SUPPLEMENTED BY THIS LEASE SUPPLEMENT NO. 2 HAVE BEEN ASSIGNED
TO, AND ARE SUBJECT TO A SECURITY INTEREST IN FAVOR OF THE
INDENTURE TRUSTEE UNDER TRUST INDENTURE, DEED OF TRUST, MORTGAGE,
SECURITY AGREEMENT AND ASSIGNMENT OF FACILITY LEASE NO. 2, DATED
AS OF DECEMBER 1, 1988, AS SUPPLEMENTED. THIS LEASE SUPPLEMENT
NO. 2 HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS. SEE SECTION 3(c)
OF THIS LEASE SUPPLEMENT NO. 2 FOR INFORMATION CONCERNING THE
RIGHTS OF HOLDERS OF VARIOUS COUNTERPARTS HEREOF.
THIS COUNTERPART IS NOT THE ORIGINAL COUNTERPART.
LEASE SUPPLEMENT NO. 2
dated as of January 1, 1994
to
FACILITY LEASE NO. 2
dated as of December 1, 1988,
as supplemented,
between
MERIDIAN TRUST COMPANY
and STEPHEN J. KABA
not in their individual capacities,
but solely as Owner Trustee under
Trust Agreement No. 2,
dated as of December 1, 1988,
with Textron Financial Corporation,
as successor in interest to
Lease Management Realty Corporation IV,
Lessor
and
SYSTEM ENERGY RESOURCES, INC.,
Lessee
Original Facility Lease Recorded on December 28,
1988 at Deed Book Volume 12Z, Page 126, Claiborne County,
Mississippi, Chancery Clerk's Office
<PAGE>
CERTAIN RIGHTS OF THE LESSOR UNDER THE FACILITY LEASE
AS SUPPLEMENTED BY THIS LEASE SUPPLEMENT NO. 2 HAVE BEEN ASSIGNED
TO, AND ARE SUBJECT TO A SECURITY INTEREST IN FAVOR OF THE
INDENTURE TRUSTEE UNDER TRUST INDENTURE, DEED OF TRUST, MORTGAGE,
SECURITY AGREEMENT AND ASSIGNMENT OF FACILITY LEASE NO. 2, DATED
AS OF DECEMBER 1, 1988, AS SUPPLEMENTED. THIS LEASE SUPPLEMENT
NO. 2 HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS. SEE SECTION 3(c)
OF THIS LEASE SUPPLEMENT NO. 2 FOR INFORMATION CONCERNING THE
RIGHTS OF HOLDERS OF VARIOUS COUNTERPARTS HEREOF.
THIS COUNTERPART IS THE ORIGINAL COUNTERPART. RECEIPT OF THIS
ORIGINAL COUNTERPART IS HEREBY ACKNOWLEDGED BY BANKERS TRUST
COMPANY, AS CORPORATE INDENTURE TRUSTEE.
By:___________________________
Authorized Officer
LEASE SUPPLEMENT NO. 2
dated as of January 1, 1994
to
FACILITY LEASE NO. 2
dated as of December 1, 1988,
as supplemented,
between
MERIDIAN TRUST COMPANY
and STEPHEN J. KABA
not in their individual capacities, but solely as
Owner Trustee under Trust Agreement No. 2,
dated as of December 1, 1988,
with Textron Financial Corporation,
as successor in interest to
Lease Management Realty Corporation IV,
Lessor
and
SYSTEM ENERGY RESOURCES, INC.,
Lessee
Original Facility Lease Recorded on December 28,
1988 at Deed Book Volume 12Z, Page 126; Claiborne County,
Mississippi, Chancery Clerk's Office
<PAGE>
LEASE SUPPLEMENT NO. 2, dated as of January 1, 1994
("Lease Supplement No. 2"), to FACILITY LEASE NO. 2, dated as of
December 1, 1988, as supplemented (the "Facility Lease"), between
MERIDIAN TRUST COMPANY, a Pennsylvania trust company, not in its
individual capacity, but solely as Corporate Owner Trustee and
STEPHEN J. KABA not in his individual capacity, but solely as
successor Individual Owner Trustee (together, 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 SYSTEM ENERGY RESOURCES, INC., an
Arkansas 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 and the Indenture Trustee have entered
into Refunding Agreement No. 2-A, dated as of January 1, 1994,
providing for the issuance by the Owner Trustee of a new series
of Fixed Rate Notes (the "Refunding Notes") to refund the
Outstanding Notes; and
WHEREAS, the Owner Trustee and the Indenture Trustee
have entered into Supplemental Indenture No. 2, dated as of
January 1, 1994, to the Indenture creating the Refunding Notes
for such purpose and establishing the terms, conditions and
designations thereof; 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 Refunding Notes;
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. Appendix A to the Lease is hereby amended such that
Funding Corporation, as defined therein shall mean GG1B Funding
Corporation.
SECTION 2. Amendments; Schedules.
(a) Section 3(h) of the Lease is hereby amended by
deleting such section in its entirety and substituting therefore
the following: "(h) Intentionally omitted."
(b) 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.
(c) Schedule PS to the Facility Lease is attached
hereto.
(d) Section 3(i) of the Facility Lease is amended by
inserting the following paragraph after Section 3(i)(D):
Nothing in this Section 3(i) is intended to
or shall create any right or entitlement of
the Lessee or any Person other than the Owner
Participant, contingent or otherwise, in or
to the proceeds of a drawing of the Equity
Portion of Rent under the Letter of Credit.
SECTION 3. Miscellaneous.
(a) Counterpart Execution. This Lease Supplement No.
2 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. 2 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. 2, 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. 2.
(c) Original Counterpart. The single executed original
of this Lease Supplement No. 2 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. 2. To the extent that the Facility Lease, as
supplemented by this Lease Supplement No. 2, 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. 2 to be duly executed by an
officer thereunto duly authorized, as of the date set forth
above.
ATTEST: MERIDIAN TRUST COMPANY,
not in its individual
capacity but solely as
Corporate Owner Trustee
__________________________ By:______________________
Name: Stephen J. Kaba
Title: Vice President
____________________________
Stephen J. Kaba, not in
his individual capacity
but solely as successor
Individual Owner Trustee
<PAGE>
ATTEST: SYSTEM ENERGY RESOURCES, INC.
____________________ By:______________________
Name:
Title:
<PAGE>
STATE OF NEW YORK )
COUNTY OF NEW YORK )
Personally appeared before me, the undersigned
authority in and for the said County and State, on this ____ day
of _________, 19__, within my jurisdiction, the within named
STEPHEN J. KABA, who acknowledged that he is a Vice President of
MERIDIAN TRUST COMPANY, a Pennsylvania trust company, Corporate
Owner Trustee under that certain Trust Agreement No. 2 dated as
of December 1, 1988 among Lease Management Realty Corporation IV,
as Original Owner Participant, MERIDIAN TRUST COMPANY, as
Corporate Owner Trustee, and STEPHEN J. KABA, as successor
Individual Owner Trustee to the original Individual Owner
Trustee, Stephen M. Carta, and that for and on behalf of the said
trust company, and as its act and deed in said capacity as
Corporate Owner 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 trust company so to do.
___________________________________
Notary Public
My Commission Expires:
_____________________
<PAGE>
STATE OF NEW YORK )
COUNTY OF NEW YORK )
Personally appeared before me, the undersigned
authority in and for the said County and State, on this ____ day
of _________, 19__, within my jurisdiction, the within named
STEPHEN J. KABA, who acknowledged that he is the successor
Individual Owner Trustee under that certain Trust Agreement No. 2
dated as of December 1, 1988 among Lease Management Realty
Corporation IV, as Original Owner Participant, MERIDIAN TRUST
COMPANY, as Corporate Owner Trustee, and STEPHEN J. KABA, as
successor Individual Owner Trustee to the original Individual
Owner Trustee, Stephen M. Carta, and that in his capacity as
Individual Owner Trustee he executed the above and foregoing
instrument after first having been duly authorized to do so.
___________________________________
Notary Public
My Commission Expires:
________________________
<PAGE>
STATE OF MISSISSIPPI)
) ss.:
COUNTY OF HINDS )
Personally appeared before me, the undersigned
authority in and for the said County and State, on this ____ day
of ____________, 19__, within my jurisdiction, the within named
_____ ______, who acknowledged that he is a
___________________________ of SYSTEM ENERGY RESOURCES, INC., an
Arkansas 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:
_________________________
<PAGE>
SCHEDULE 1
TO
LEASE SUPPLEMENT NO. 2
BASIC RENT PERCENTAGES
Basic Rent Advance/ Percentage of Basic Rent Advance/ Percentage of
Payment Arrears Facility Cost Payment Date Arrears Facility Cost
Date
<PAGE>
SCHEDULE 2
TO
LEASE SUPPLEMENT NO. 2
SCHEDULE OF CASUALTY VALUES
If the event giving rise to an obligation to pay Casualty
Value occurs and the actual date as of which the Owner
Participant shall incur Federal income tax consequences shall be
earlier or later than the date assumed in originally calculating
the applicable Casualty Value, such value shall be appropriately
adjusted, based upon the date as of which the Owner Participant
incurred such tax consequences but otherwise on the Assumptions
used to calculate the following values.
Basic Rent Percentage of Basic Rent Percentage of
Payment Date Facility Cost Payment Date Facility Cost
<PAGE>
ADDENDUM TO
SCHEDULE 2 OF LEASE
The foregoing Casualty Values are comprised of the following two
components:
Accrued Accrued
Date Loss Value Rent Date Loss Value Rent
SCHEDULE 3
TO
LEASE SUPPLEMENT NO. 2
SCHEDULE OF SPECIAL CASUALTY VALUES
If the event giving rise to an obligation to pay Special
Casualty Value occurs and the actual date as of which the Owner
Participant shall incur Federal income tax consequences shall be
earlier or later than the date assumed in originally calculating
the applicable Special Casualty Value, such value shall be
appropriately adjusted, based upon the date as of which the Owner
Participant incurred such tax consequences but otherwise on the
Assumptions used to calculate the following values.
Basic Rent Percentage of Basic Rent Percentage of
Payment Date Facility Cost Payment Date Facility Cost
<PAGE>
ADDENDUM TO
SCHEDULE 3 OF LEASE
The foregoing Special Casualty Values are
comprised of the following two components:
Accrued Accrued
Date Loss Value Rent Date Loss Value Rent
<PAGE>
SCHEDULE 4
TO
LEASE SUPPLEMENT NO. 2
SCHEDULE OF NET CASUALTY VALUES
If the event giving rise to an obligation to pay Net
Casualty Value occurs and the actual date as of which the Owner
Participant shall incur Federal income tax consequences shall be
earlier or later than the date assumed in originally calculating
the applicable Net Casualty Value, such value shall be
appropriately adjusted, based upon the date as of which the Owner
Participant incurred such tax consequences but otherwise on the
Assumptions used to calculate the following values.
Basic Rent Percentage of Basic Rent Percentage of
Payment Date Facility Cost Payment Date Facility Cost
The Net Casualty Value on _______________, 19__ is
_________%.
<PAGE>
SCHEDULE 5
TO
LEASE SUPPLEMENT NO. 2
SCHEDULE OF NET SPECIAL CASUALTY VALUES
If the event giving rise to an obligation to pay Net Special
Casualty Value occurs and the actual date as of which the Owner
Participant shall incur Federal income tax consequences shall be
earlier or later than the date assumed in originally calculating
the applicable Net Special Casualty Value, such value shall be
appropriately adjusted, based upon the date as of which the Owner
Participant incurred such tax consequences but otherwise on the
Assumptions used to calculate the following values.
Basic Rent Percentage of Basic Rent Percentage of
Payment Date Facility Cost Payment Date Facility Cost
Exhibit B-7(c)
SUPPLEMENTAL INDENTURE NO. 2
dated as of January 1, 1994
to
TRUST INDENTURE, DEED OF TRUST, MORTGAGE,
SECURITY AGREEMENT AND ASSIGNMENT
OF FACILITY LEASE NO. 1
dated as of December 1, 1988,
as supplemented,
between
MERIDIAN TRUST COMPANY
and STEPHEN J. KABA
not in their individual capacities,
but solely as Owner Trustee under Trust Agreement No. 1
dated as of December 1, 1988, with
Resources Capital Management Corporation,
as successor in interest to
Public Service Resources Corporation,
the Original Owner Participant
and
BANKERS TRUST COMPANY,
not in its individual capacity, but solely as
Corporate Indenture Trustee
and
STANLEY BURG,
not in his individual capacity, but solely as
Individual Indenture Trustee
Original Indenture Recorded on
December 28, 1988, at Deed of Trust Book
Volume 13A, Page 350,
Claiborne County, Mississippi, Chancery Clerk's Office
<PAGE>
SUPPLEMENTAL INDENTURE NO. 2, dated as of January 1,
1994 ("Supplemental Indenture No. 2"), to Trust Indenture, Deed
of Trust, Mortgage, Security Agreement and Assignment of Facility
Lease No. 1 dated as of December 1, 1988, as supplemented (the
"Indenture") between MERIDIAN TRUST COMPANY, a Pennsylvania trust
company, and STEPHEN J. KABA each of whose address is 35 North
Sixth Street, Reading, Pennsylvania 19601, not in their
individual capacities, except as expressly provided otherwise,
but each solely as trustee (collectively, the "Owner Trustee")
under the Trust Agreement (such term, and other capitalized terms
used herein without definition, having the meanings ascribed
thereto in Section 1 below), BANKERS TRUST COMPANY, a New York
banking corporation (not in its individual capacity, but solely
as the Corporate Indenture Trustee, and, for all purposes except
those with respect to Section 6.4(g) of the Indenture, the
Indenture Trustee), and STANLEY BURG (not in his individual
capacity, but solely as the Individual Indenture Trustee, and
solely with respect to Section 6.4(g) of the Indenture, the
Indenture Trustee), each of whose address is Four Albany Street,
New York, New York 10015,
W I T N E S S E T H:
WHEREAS, the Owner Trustee and the Indenture Trustee
have entered into the Indenture pursuant to which the Owner
Trustee issued the Initial Series Notes and Supplemental
Indenture No. 1, dated as of April 1, 1989, pursuant to which the
Owner Trustee issued the Outstanding Notes;
WHEREAS, Section 3.5(1) of the Indenture provides,
among other things, that the Outstanding Notes may be refunded
with Additional Notes;
WHEREAS, Section 3.5(4) of the Indenture provides,
among other things, that the Owner Trustee and the Indenture
Trustee may enter into indentures supplemental to the Indenture
for, among other things, the purpose of establishing the terms,
conditions and designations of Additional Notes;
WHEREAS, the Owner Trustee desires to issue Additional
Notes to effect a refunding of the Outstanding Notes of the
series created and established pursuant to Supplement No. 1,
dated as of April 1, 1989, to the Indenture and to enter into
this Supplemental Indenture No. 2 to establish the terms,
conditions and designations of such Additional Notes; and
WHEREAS, Section 10.1(viii) of the Indenture provides
that, without the consent of Holders of the Notes Outstanding,
the Indenture Trustee and the Owner Trustee may, from time to
time and at any time, execute a supplement to the Indenture in
order to evidence the issuance of, and to provide the terms of,
Additional Notes;
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 hereto shall have
the meanings assigned to such terms in Appendix A to the
Indenture. Appendix A to the Indenture is hereby amended such
that Funding Corporation, as defined therein shall mean GG1B
Funding Corporation, a Delaware corporation. Schedule PS to the
Indenture is attached hereto.
SECTION 2. Terms, Conditions and Designations of
the Fixed Rate Notes.
(a) The Fixed Rate Notes. There are hereby created
and established two separate series of Fixed Rate Refunding Notes
designated, respectively, "Promissory Notes, Fixed Rate Refunding
Series due ____" (hereinafter sometimes called the "Series ____
Notes") and "Promissory Notes, Fixed Rate Refunding Series due
____" (hereinafter sometimes called the "Series ____ Notes"). The
Series ____ Notes and the Series ____ Notes are hereinafter
sometimes referred to, together, as the "Refunding Notes". The
Refunding Notes shall be issued in the principal amounts, shall
bear interest at the rates per annum and shall have the final
maturities set forth below:
Original Interes Final
Principal Amount Rate Maturity
Series ____ Notes
Series ____ Notes
The Series ____ Notes and the Series ____ Notes shall
be substantially in the form of Exhibits A-l and A-2 hereto,
respectively.
Each Refunding Note 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
July 15, 1994 and on each January 15 and July 15 thereafter to
and including the final maturity date thereof, unless paid in
full prior to such date as provided herein and in such Refunding
Note. The principal amount of each Refunding Note shall be
payable on the dates and in the amounts as set forth in Schedule
1 attached thereto, as such Schedule may be adjusted from time to
time in accordance with the terms hereof and of such Refunding
Note. Installments of principal of and premium, if any, and
interest on each Refunding Note shall be due and payable on the
payment dates specified in Schedule 1 attached thereto.
Each Refunding Note shall be subject to prepayment as
set forth in such Refunding Note.
(b) Certain Adjustments to Amortization Schedules. The
schedules of principal amortization attached to the Refunding
Notes may be adjusted at the discretion of the Owner Trustee, as
contemplated by, and subject to the conditions set forth in,
Section 2(e) of the Participation Agreement; provided, however,
that no such adjustment shall be made by the Owner Trustee which
will increase or reduce the average life of such Refunding Note
(calculated in accordance with generally accepted financial
practice) from the date of initial issuance by more than 6
months; and provided, further, that any such adjustment may be
made only in connection with a recalculation of Basic Rent
pursuant to Section 3(d) or 3(e)(v)(C) of the Facility Lease. If
the Owner Trustee shall propose to make the foregoing adjustment,
the Owner Trustee shall, as contemplated by Section 3.12 of the
Indenture, deliver to the Indenture Trustee and to the Lessee at
least 30 days prior to the first payment date (specified on the
schedule to such Refunding Note) proposed to be affected by such
adjustment, a 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) setting forth
the revised schedule of principal amortization for such Refunding
Note and (z) attaching calculations showing that the average life
of such Refunding Note will not be reduced or increased except as
permitted by this paragraph (b). 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).
SECTION 3. Miscellaneous.
(a) Counterpart Execution. This Supplemental
Indenture No. 2 may be executed in any number of counterparts and
by the different parties hereto on 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.
(b) 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 Indenture, this Supplemental Indenture No. 2 shall form a
part thereof. On and after the delivery of this Supplemental
Indenture No. 2, any reference in any Transaction Document to the
Indenture shall be deemed to refer to the Indenture as
supplemented and amended by this Supplemental Indenture No. 2.
(c) Responsibility for Recitals, Etc. The Indenture
Trustee makes no representation or warranty as to the correctness
of any statement, recital or representation made by any Person
other than the Indenture Trustee in this Supplemental Indenture
No. 2, any other Transaction Document or the Refunding Notes or,
except with respect to the due authentication by the Indenture
Trustee of the Refunding Notes, as to the validity or sufficiency
of this Supplemental Indenture No. 2 or the Refunding Notes.
(d) Provisions Binding on Successors. All the
covenants, stipulations, promises and agreements in this
Supplemental Indenture No. 2 contained by or on behalf of the
Owner Trustee shall bind its successors and assigns, whether so
expressed or not.
IN WITNESS WHEREOF, the Owner Trustee and the Indenture
Trustee have each caused this Supplemental Indenture No. 2 to be
duly executed by their respective officers thereunto duly
authorized, all as of the date set forth above.
<PAGE>
MERIDIAN TRUST COMPANY, not in its
individual capacity, but solely as
Corporate Owner Trustee
ATTEST:
__________________ By:________________________________
Title: Vice President
_____________________________________
STEPHEN J. KABA, not in his individual
capacity, but solely as Individual Owner
Trustee
<PAGE>
BANKERS TRUST COMPANY,
ATTEST: not in its individual capacity, but
solely as Corporate Indenture Trustee
____________________ By: _________________________________
Title: Vice President
_____________________________________
STANLEY BURG,
not in his individual capacity, but
solely as Individual Indenture Trustee
<PAGE>
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
______, 19__, within my jurisdiction, the within named STEPHEN J.
KABA who acknowledged that he is a Vice President of MERIDIAN
TRUST COMPANY, a Pennsylvania trust company, Corporate Owner
Trustee under that certain Trust Agreement No. 1, dated as of
December 1, 1988 among Public Service Resources Corporation, as
Original Owner Participant, MERIDIAN TRUST COMPANY, as Corporate
Owner Trustee, and STEPHEN J. KABA as successor Individual Owner
Trustee to the original individual Owner Trustee, Stephen M.
Carta, and that for and on behalf of the said trust company, and
as its act and deed in said capacity as Corporate Owner 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 trust company so to do.
________________________________
NOTARY PUBLIC
My Commission Expires:
___________________________
<PAGE>
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 _______, 19__ within my jurisdiction, the within named STEPHEN
J. KABA who acknowledged that he is successor Individual Owner
Trustee under that certain Trust Agreement No. [1/2], dated as of
December 1, 1988 among [Public Service Resources
Corporation/Lease Management Realty Corporation IV], as Original
Owner Participant, MERIDIAN TRUST COMPANY, as Corporate Owner
Trustee, and STEPHEN J. KABA as successor Individual Owner
Trustee to the original Individual Owner Trustee, Stephen M.
Carta, and that in his capacity as Individual Owner Trustee he
executed the above and foregoing instrument after first having
been duly authorized so to do.
________________________________
NOTARY PUBLIC
My Commission Expires:
_________________________
<PAGE>
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 ________, 19_, 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 said corporation, and as its act and deed,
he executed the above and foregoing instrument, after first
having been duly authorized so to do.
________________________________
NOTARY PUBLIC
My Commission Expires:
__________________________
<PAGE>
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 _______, 19__, within my jurisdiction, the within named
________________, who acknowledged that he is a Vice President of
BANKERS TRUST COMPANY, a New York banking corporation, Corporate
Indenture Trustee under the Indenture, and that for and on behalf
of the said corporation, and as its act and deed in said capacity
as Corporate Indenture 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:
___________________________
<PAGE>
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
________, 19__, within my jurisdiction, the within named STANLEY
BURG, who acknowledged that he executed the above and foregoing
instrument.
________________________________
NOTARY PUBLIC
My Commission Expires:
___________________________
<PAGE>
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 ___________, 19__, within my jurisdiction, the within named
STANLEY BURG, who acknowledged that he is Individual Indenture
Trustee under the Indenture, and that in his capacity as
Individual Indenture Trustee, he executed the above and foregoing
instrument, after first having been duly authorized so to do.
________________________________
NOTARY PUBLIC
My Commission Expires:
_____________________________
<PAGE>
EXHIBIT A-1 TO
SUPPLEMENTAL
INDENTURE NO. 2
FORM OF PROMISSORY NOTE, FIXED RATE REFUNDING SERIES DUE ____
THIS NOTE 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
PROMISSORY NOTE, FIXED RATE REFUNDING SERIES DUE ____
(DUE _______, 20 ____)
Issue Date: _____, 20____
No. R-1A
FOR VALUE RECEIVED, MERIDIAN TRUST COMPANY and STEPHEN
J. KABA not in their individual capacities, but solely as Owner
Trustee (collectively, the "Owner Trustee") under Trust Agreement
No. 1, dated as of December 1, 1988, with Resources Capital
Management Corporation (the "Owner Participant" as successor in
interest to Public Service Resources Corporation, hereby promise
to pay to Bankers Trust Company, not in its individual capacity,
but solely as Trustee under the Collateral Trust Indenture, dated
as of January 1, 1994, among GG1B Funding Corporation, System
Energy Resources, Inc. and Bankers Trust Company, as such
Collateral Trust Indenture may be supplemented or amended from
time to time, or registered assigns, the principal sum of
____________________________________ ($___________), 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 (the dates and amounts set forth in Schedule I being
herein called, respectively, "Amortization Dates" and
"Amortization Requirements"); 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 Fixed Rate Note until
due and payable, semiannually in arrears on January 15 and July
15 in each year, commencing July 15, 1994, at the rate of _____%
per annum, until the principal amount hereof is paid in full.
Capitalized terms used in this Fixed Rate Note which
are not otherwise defined herein shall have the meanings ascribed
thereto in the 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
Trust Indenture, Deed of Trust, Mortgage, Security Agreement and
Assignment of Facility Lease No. 1, dated as of December 1, 1988,
as at any time heretofore or hereafter amended or supplemented in
accordance with the provisions thereof (the "Indenture"), between
the Owner Trustee and Bankers Trust Company and Stanley Burg, not
in their individual capacities, but solely as Corporate and
Individual Indenture Trustee, respectively (the "Indenture
Trustee"), shall be made only from the Lease 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 Lease Indenture Estate to make such payments in accordance
with the terms of Article V of the Indenture. The Holder hereof,
by its acceptance of this Fixed Rate Note, shall be deemed to
have agreed that such Holder will look solely to the Trust Estate
and the income and proceeds from the Lease Indenture Estate to
the extent available for distribution to the Holder hereof as
above provided, and that neither the Owner Participant nor,
except as 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 Fixed Rate Note
or for any performance to be rendered under the Indenture or any
Transaction Document or for any liability thereunder; provided,
however, that in the event that the Lessee shall assume all the
obligations of the Owner Trustee hereunder and under the
Indenture pursuant to Section 3.9(b) of the Indenture, or shall
be deemed to have assumed such obligations pursuant to Section
7(b)(4)(H) of the Participation Agreement, then all the payments
to be made on this Fixed Rate Note shall be made only from
payments made by the Lessee under this Fixed Rate Note in
accordance with the Assumption Agreement referred to in said
Section 3.9(b) of the Indenture and the Holder of this Fixed Rate
Note agrees that in such event it will look solely to the Lessee
for such payment and, subject to Section 2.4 of the Indenture, to
the Lease Indenture Estate.
Principal, premium, if any, and interest 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, in
the manner provided in the Indenture, on presentment of this
Fixed Rate Note at the Indenture Trustee's Office, or as
otherwise provided in the Indenture.
In the manner and to the extent provided in the
Indenture, Schedule 1 hereto may be adjusted at the discretion of
the Owner Trustee in connection with an adjustment to Basic Rent
under Section 3(d) or 3(e)(v)(C) of the Facility Lease.
In the event of a partial prepayment of this Fixed Rate
Note (the payment of principal in accordance with Schedule 1
hereto not being considered for this purpose a prepayment), the
Amortization Requirement 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 (A) the
product of (w) the principal amount of such prepayment
(hereinafter called the "Prepaid Amount") and (x) such
Amortization Requirement by (B) the sum of (y) the principal
amount of this Fixed Rate Note then Outstanding (after giving
effect to such prepayment) and (z) the Prepaid Amount; provided,
however, that the remaining Amortization Requirements determined
as set forth in this paragraph shall be rounded to the nearest
integral multiple of $l.00, subject to further necessary
adjustment so that the aggregate principal amount of such
satisfaction of Amortization Requirements shall be equal to the
Prepaid Amount, such adjustment to such Amortization Requirements
to be made in the inverse order of the respective Amortization
Dates corresponding thereto. In connection with such adjustments
to Schedule 1 the Owner Trustee shall deliver to the Indenture
Trustee, not later than 30 days prior to the next date on which a
payment of principal of this Fixed Rate Note is due following
such partial prepayment, a revised Schedule 1 hereto prepared by
the Lessee and approved by the Owner Participant. The Indenture
Trustee may rely on such revised Schedule 1 and shall have no
duty with respect to the adjustments set forth therein other than
to make it available for inspection by the Holder of this Fixed
Rate Note.
The Holder hereof, by its acceptance of this Fixed Rate
Note, agrees that each payment received by it hereunder shall be
applied in the manner set forth in Section 3.11 of the Indenture.
The Holder of this Fixed Rate Note agrees, by its acceptance
hereof, that it will duly note by appropriate means all payments
of principal or interest made hereon and that it will not in any
event transfer or otherwise dispose of this Fixed Rate Note
unless and until all such notations have been duly made and the
other requirements of the Indenture have been complied with.
This Fixed Rate Note is one of the Fixed Rate Notes
referred to in the Indenture. The Indenture permits the issuance
of additional series of Notes, as provided in Section 3.5 of the
Indenture, 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 Lease 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 Fixed Rate Note and all
other Notes issued and outstanding from time to time under the
Indenture. Reference is hereby made to the Indenture for a
statement of the rights of the Holders of, and the nature and
extent of the security for, this Fixed Rate Note and of the
rights of, and the nature and extent of the security for, the
Holders of the other Notes 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
Fixed Rate Note.
This Fixed Rate Note is subject to purchase by the
Owner Trustee as provided in Section 6.8(b) of the Indenture.
This Fixed Rate Note is also subject to prepayment in full, at
the principal amount hereof plus accrued interest to the date
fixed for prepayment, in the event of the termination of the
Lease pursuant to Section 13(f) or (g) or Section 14 thereof, or
Section 10(b)(3)(ix) of the Participation Agreement, subject,
however, except in the case of a termination pursuant to Section
14 of the Lease, to the right of the Lessee to assume this Fixed
Rate Note on the Lease Termination Date, in which event there
shall be no redemption of this Fixed Rate Note as a consequence
of such termination.
In addition, this Fixed Rate Note may be prepaid in
whole or in part at any time on or after _______ __, 19__ at the
following prepayment prices (expressed as a percentage of the
principal amount hereof being prepaid), together with interest
accrued to the date fixed for prepayment:
If Prepaid in the
12 Month Period Prepayment
Beginning January 15 Price
____ ___.__%
____ ___.___
____ ___.___
____ ___.___
____ ___.___
and thereafter at the principal amount thereof, together with
interest accrued to the date fixed for prepayment.
In the case an Indenture Event of Default shall occur
and be continuing, the unpaid balance of the principal of this
Fixed Rate Note and any other Notes, together with all accrued
but unpaid interest 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 Fixed Rate
Note, and the lien of the Indenture or the Lease Indenture
Estate, is subject to being legally discharged prior to the
maturity of this Fixed Rate Note upon the deposit with the
Indenture Trustee of cash or certain securities sufficient to pay
this Fixed Rate Note when due in accordance with the terms of the
Indenture.
There shall be maintained at the Indenture Trustee's
Office a register for the purpose of registering transfers and
exchanges of Notes in the manner provided in the Indenture. The
transfer of this Fixed Rate Note is registrable, as provided in
the Indenture, upon surrender of this Fixed Rate Note for
registration of transfer duly accompanied by a written instrument
of transfer duly executed by or on behalf of the registered
Holder hereof, together with the amount of any applicable
transfer taxes. The Owner Trustee and the Indenture Trustee may
treat the person in whose name this Fixed Rate Note is registered
as the owner hereof for the purpose of receiving payments of
principal of and premium, if any, and interest on this Fixed Rate
Note and for all other purposes whatsoever, whether or not this
Fixed Rate Note be overdue, and neither the Owner Trustee nor the
Indenture Trustee shall be affected by notice to the contrary.
This Fixed Rate Note shall be governed by, and
construed in accordance with, the law of the State of New York.
<PAGE>
IN WITNESS WHEREOF, the Corporate Owner Trustee has
caused this Fixed Rate Note to be duly executed as of the date
hereof.
MERIDIAN TRUST COMPANY, not in its
individual capacity, but solely as
Corporate Owner Trustee under the
Trust Agreement
By:
________________________________
Title:
This Fixed Rate Note is one of the series of Notes
referred to therein and in the within-mentioned Indenture.
BANKERS TRUST COMPANY, not in its
individual capacity, but solely as
Corporate Indenture Trustee
By: ____________________________
Title:
<PAGE>
SCHEDULE 1
SCHEDULE OF PRINCIPAL AMORTIZATION
Payment Principal Principal
Date Amount Payable Balance
<PAGE>
EXHIBIT A-2 TO
SUPPLEMENTAL
INDENTURE NO. 2
FORM OF PROMISSORY NOTE, FIXED RATE REFUNDING SERIES DUE ____
THIS NOTE 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
PROMISSORY NOTE, FIXED RATE REFUNDING SERIES DUE ____
(DUE _______ __, 20__)
Issue Date: _____ __, ____
No. R-1B
FOR VALUE RECEIVED, MERIDIAN TRUST COMPANY and STEPHEN
J. KABA not in their individual capacities, but solely as Owner
Trustee (collectively, the "Owner Trustee") under Trust Agreement
No. 1, dated as of December 1, 1988, with Resources Capital
Management Corporation (the "Owner Participant" as successor in
interest to Public Service Resources Corporation), hereby promise
to pay to Bankers Trust Company, not in its individual capacity,
but solely as Trustee under the Collateral Trust Indenture, dated
as of January 1, 1994, among GG1B Funding Corporation, System
Energy Resources, Inc. and Bankers Trust Company, as such
Collateral Trust Indenture may be supplemented or amended from
time to time, or registered assigns, the principal sum of
_______________________________________________ ($____________),
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 (the dates and amounts set forth in Schedule
I being herein called, respectively, "Amortization Dates" and
"Amortization Requirements"); 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 Fixed Rate Note until
due and payable, semiannually in arrears on January 15 and July
15 in each year, commencing July 15, 1994, at the rate of ____%
per annum, until the principal amount hereof is paid in full.
Capitalized terms used in this Fixed Rate Note which
are not otherwise defined herein shall have the meanings ascribed
thereto in the 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
Trust Indenture, Deed of Trust, Mortgage, Security Agreement and
Assignment of Facility Lease No. 1, dated as of December 1, 1988,
as at any time heretofore or hereafter amended or supplemented in
accordance with the provisions thereof (the "Indenture"), between
the Owner Trustee and Bankers Trust Company and Stanley Burg, not
in their individual capacities but solely as Corporate and
Individual Indenture Trustee, respectively (the "Indenture
Trustee"), shall be made only from the Lease 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 Lease Indenture Estate to make such payments in accordance
with the terms of Article V of the Indenture. The Holder hereof,
by its acceptance of this Fixed Rate Note, shall be deemed to
have agreed that such Holder will look solely to the Trust Estate
and the income and proceeds from the Lease Indenture Estate to
the extent available for distribution to the Holder hereof as
above provided, and that neither the Owner Participant nor,
except as 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 Fixed Rate Note
or for any performance to be rendered under the Indenture or any
Transaction Document or for any liability thereunder; provided,
however, that in the event that the Lessee shall assume all the
obligations of the Owner Trustee hereunder and under the
Indenture pursuant to Section 3.9(b) of the Indenture, or shall
be deemed to have assumed such obligations pursuant to Section
7(b)(4)(H) of the Participation Agreement, then all the payments
to be made on this Fixed Rate Note shall be made only from
payments made by the Lessee under this Fixed Rate Note in
accordance with the Assumption Agreement referred to in said
Section 3.9(b) of the Indenture and the Holder of this Fixed Rate
Note agrees that in such event it will look solely to the Lessee
for such payment and, subject to Section 2.4 of the Indenture, to
the Lease Indenture Estate.
Principal, premium, if any, and interest 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, in
the manner provided in the Indenture, on presentment of this
Fixed Rate Note at the Indenture Trustee's Office, or as
otherwise provided in the Indenture.
In the manner and to the extent provided in the
Indenture, Schedule 1 hereto may be adjusted at the discretion of
the Owner Trustee in connection with an adjustment to Basic Rent
under Section 3(d) or 3(e)(v)(C) of the Facility Lease.
In the event of a partial prepayment of this Fixed Rate
Note (the payment of principal in accordance with Schedule 1
hereto not being considered for this purpose a prepayment), the
Amortization Requirement 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 (A) the
product of (w) the principal amount of such prepayment
(hereinafter called the "Prepaid Amount") and (x) such
Amortization Requirement by (B) the sum of (y) the principal
amount of this Fixed Rate Note then Outstanding (after giving
effect to such prepayment) and (z) the Prepaid Amount; provided,
however, that the remaining Amortization Requirements determined
as set forth in this paragraph shall be rounded to the nearest
integral multiple of $1.00, subject to further necessary
adjustment so that the aggregate principal amount of such
satisfaction of Amortization Requirements shall be equal to the
Prepaid Amount, such adjustment to such Amortization Requirements
to be made in the inverse order of the respective Amortization
Dates corresponding thereto. In connection with such adjustments
to Schedule 1 the Owner Trustee shall deliver to the Indenture
Trustee, not later than 30 days prior to the next date on which a
payment of principal of this Fixed Rate Note is due following
such partial prepayment, a revised Schedule 1 hereto prepared by
the Lessee and approved by the Owner Participant. The Indenture
Trustee may rely on such revised Schedule 1 and shall have no
duty with respect to the adjustments set forth therein other than
to make it available for inspection by the Holder of this Fixed
Rate Note.
The Holder hereof, by its acceptance of this Fixed Rate
Note, agrees that each payment received by it hereunder shall be
applied in the manner set forth in Section 3.11 of the Indenture.
The Holder of this Fixed Rate Note agrees, by its acceptance
hereof, that it will duly note by appropriate means all payments
of principal or interest made hereon and that it will not in any
event transfer or otherwise dispose of this Fixed Rate Note
unless and until all such notations have been duly made and the
other requirements of the Indenture have been complied with.
This Fixed Rate Note is one of the Fixed Rate Notes
referred to in the Indenture. The Indenture permits the issuance
of additional series of Notes, as provided in Section 3.5 of the
Indenture, 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 Lease 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 Fixed Rate Note and all
other Notes issued and outstanding from time to time under the
Indenture. Reference is hereby made to the Indenture for a
statement of the rights of the Holders of, and the nature and
extent of the security for, this Fixed Rate Note and of the
rights of, and the nature and extent of the security for, the
Holders of the other Notes 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
Fixed Rate Note.
This Fixed Rate Note is subject to purchase by the
Owner Trustee as provided in Section 6.8(b) of the Indenture.
This Fixed Rate Note is also subject to prepayment in full, at
the principal amount hereof plus accrued interest to the date
fixed for prepayment, in the event of the termination of the
Lease pursuant to Section 13(f) or (g) or Section 14 thereof, or
Section 10(b)(3)(ix) of the Participation Agreement, subject,
however, except in the case of a termination pursuant to Section
14 of the Lease, to the right of the Lessee to assume this Fixed
Rate Note on the Lease Termination Date, in which event there
shall be no redemption of this Fixed Rate Note as a consequence
of such termination.
In addition, this Fixed Rate Note may be prepaid in
whole or in part at any time on or after ________ __, ____ at the
following prepayment prices (expressed as a percentage of the
principal amount hereof being prepaid), together with interest
accrued to the date fixed for prepayment:
If Prepaid in the
12 Month Period Prepayment
Beginning January 15 Price
and thereafter at the principal amount thereof, together with
interest accrued to the date fixed for prepayment.
In the case an Indenture Event of Default shall occur
and be continuing, the unpaid balance of the principal of this
Fixed Rate Note and any other Notes, together with all accrued
but unpaid interest 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 Fixed Rate
Note, and the lien of the Indenture or the Lease Indenture
Estate, is subject to being legally discharged prior to the
maturity of this Fixed Rate Note upon the deposit with the
Indenture Trustee of cash or certain securities sufficient to pay
this Fixed Rate Note when due in accordance with the terms of the
Indenture.
There shall be maintained at the Indenture Trustee's
Office a register for the purpose of registering transfers and
exchanges of Notes in the manner provided in the Indenture. The
transfer of this Fixed Rate Note is registrable, as provided in
the Indenture, upon surrender of this Fixed Rate Note for
registration of transfer duly accompanied by a written instrument
of transfer duly executed by or on behalf of the registered
Holder hereof, together with the amount of any applicable
transfer taxes. The Owner Trustee and the Indenture Trustee may
treat the person in whose name this Fixed Rate Note is registered
as the owner hereof for the purpose of receiving payments of
principal of and premium, if any, and interest on this Fixed Rate
Note and for all other purposes whatsoever, whether or not this
Fixed Rate Note be overdue, and neither the Owner Trustee nor the
Indenture Trustee shall be affected by notice to the contrary.
This Fixed Rate Note shall be governed by, and
construed in accordance with, the law of the State of New York.
<PAGE>
IN WITNESS WHEREOF, the Corporate Owner Trustee has
caused this Fixed Rate Note to be duly executed as of the date
hereof.
MERIDIAN TRUST COMPANY, not in its
individual capacity, but solely as
Corporate Owner Trustee under the Trust
Agreement
By:
__________________________________
Title:
This Fixed Rate Note is one of the series of Notes
referred to therein and in the within-mentioned Indenture.
BANKERS TRUST COMPANY, not in its
individual capacity, but solely as
Corporate Indenture Trustee
By: ______________________________
Title:
<PAGE>
SCHEDULE 1
SCHEDULE OF PRINCIPAL AMORTIZATION
Payment Principal Principal
Date Amount Payable Balance
Exhibit B-8(c)
SUPPLEMENTAL INDENTURE NO. 2
dated as of January 1, 1994
to
TRUST INDENTURE, DEED OF TRUST, MORTGAGE,
SECURITY AGREEMENT AND ASSIGNMENT
OF FACILITY LEASE NO. 2
dated as of December 1, 1988,
as supplemented,
between
MERIDIAN TRUST COMPANY
and STEPHEN J. KABA
not in their individual capacities,
but solely as Owner Trustee under Trust Agreement No. 2
dated as of December 1, 1988, with
Textron Financial Corporation,
as successor in interest to
Lease Management Realty Corporation IV,
the Original Owner Participant
and
BANKERS TRUST COMPANY,
not in its individual capacity, but solely as
Corporate Indenture Trustee
and
STANLEY BURG,
not in his individual capacity, but solely as
Individual Indenture Trustee
Original Indenture Recorded on
December 28, 1988, at Deed of Trust Book
Volume 13C, Page 1,
Claiborne County, Mississippi, Chancery Clerk's Office
<PAGE>
SUPPLEMENTAL INDENTURE NO. 2, dated as of January 1,
1994 ("Supplemental Indenture No. 2"), to Trust Indenture, Deed
of Trust, Mortgage, Security Agreement and Assignment of Facility
Lease No. 2 dated as of December 1, 1988, as supplemented (the
"Indenture") between MERIDIAN TRUST COMPANY, a Pennsylvania trust
company, and STEPHEN J. KABA each of whose address is 35 North
Sixth Street, Reading, Pennsylvania 19601, not in their
individual capacities, except as expressly provided otherwise,
but each solely as trustee (collectively, the "Owner Trustee")
under the Trust Agreement (such term, and other capitalized terms
used herein without definition, having the meanings ascribed
thereto in Section 1 below), BANKERS TRUST COMPANY, a New York
banking corporation (not in its individual capacity, but solely
as the Corporate Indenture Trustee, and, for all purposes except
those with respect to Section 6.4(g) of the Indenture, the
Indenture Trustee), and STANLEY BURG (not in his individual
capacity, but solely as the Individual Indenture Trustee, and
solely with respect to Section 6.4(g) of the Indenture, the
Indenture Trustee), each of whose address is Four Albany Street,
New York, New York 10015,
W I T N E S S E T H:
WHEREAS, the Owner Trustee and the Indenture Trustee
have entered into the Indenture pursuant to which the Owner
Trustee issued the Initial Series Notes and Supplemental
Indenture No. 1, dated as of April 1, 1989, pursuant to which the
Owner Trustee issued the Outstanding Notes;
WHEREAS, Section 3.5(1) of the Indenture provides,
among other things, that the Outstanding Notes may be refunded
with Additional Notes;
WHEREAS, Section 3.5(4) of the Indenture provides,
among other things, that the Owner Trustee and the Indenture
Trustee may enter into indentures supplemental to the Indenture
for, among other things, the purpose of establishing the terms,
conditions and designations of Additional Notes;
WHEREAS, the Owner Trustee desires to issue Additional
Notes to effect a refunding of the Outstanding Notes of the
series created and established pursuant to Supplement No. 1,
dated as of April 1, 1989, to the Indenture and to enter into
this Supplemental Indenture No. 2 to establish the terms,
conditions and designations of such Additional Notes; and
WHEREAS, Section 10.1(viii) of the Indenture provides
that, without the consent of Holders of the Notes Outstanding,
the Indenture Trustee and the Owner Trustee may, from time to
time and at any time, execute a supplement to the Indenture in
order to evidence the issuance of, and to provide the terms of,
Additional Notes;
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 hereto shall have
the meanings assigned to such terms in Appendix A to the
Indenture. Appendix A to the Indenture is hereby amended such
that Funding Corporation, as defined therein shall mean GG1B
Funding Corporation, a Delaware corporation. Schedule PS to the
Indenture is attached hereto.
SECTION 2. Terms, Conditions and Designations of
the Fixed Rate Notes.
(a) The Fixed Rate Notes. There are hereby created
and established two separate series of Fixed Rate Refunding Notes
designated, respectively, "Promissory Notes, Fixed Rate Refunding
Series due ____" (hereinafter sometimes called the "Series ____
Notes") and "Promissory Notes, Fixed Rate Refunding Series due
____" (hereinafter sometimes called the "Series ____ Notes"). The
Series ____ Notes and the Series ____ Notes are hereinafter
sometimes referred to, together, as the "Refunding Notes". The
Refunding Notes shall be issued in the principal amounts, shall
bear interest at the rates per annum and shall have the final
maturities set forth below:
Original Interes Final
Principal t Maturity
Amount Rate
Series ____ Notes
Series ____ Notes
The Series ____ Notes and the Series ____ Notes shall
be substantially in the form of Exhibits A-l and A-2 hereto,
respectively.
Each Refunding Note 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
July 15, 1994 and on each January 15 and July 15 thereafter to
and including the final maturity date thereof, unless paid in
full prior to such date as provided herein and in such Refunding
Note. The principal amount of each Refunding Note shall be
payable on the dates and in the amounts as set forth in Schedule
1 attached thereto, as such Schedule may be adjusted from time to
time in accordance with the terms hereof and of such Refunding
Note. Installments of principal of and premium, if any, and
interest on each Refunding Note shall be due and payable on the
payment dates specified in Schedule 1 attached thereto.
Each Refunding Note shall be subject to prepayment as
set forth in such Refunding Note.
(b) Certain Adjustments to Amortization Schedules. The
schedules of principal amortization attached to the Refunding
Notes may be adjusted at the discretion of the Owner Trustee, as
contemplated by, and subject to the conditions set forth in,
Section 2(e) of the Participation Agreement; provided, however,
that no such adjustment shall be made by the Owner Trustee which
will increase or reduce the average life of such Refunding Note
(calculated in accordance with generally accepted financial
practice) from the date of initial issuance by more than 6
months; and provided, further, that any such adjustment may be
made only in connection with a recalculation of Basic Rent
pursuant to Section 3(d) or 3(e)(v)(C) of the Facility Lease. If
the Owner Trustee shall propose to make the foregoing adjustment,
the Owner Trustee shall, as contemplated by Section 3.12 of the
Indenture, deliver to the Indenture Trustee and to the Lessee at
least 30 days prior to the first payment date (specified on the
schedule to such Refunding Note) proposed to be affected by such
adjustment, a 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) setting forth
the revised schedule of principal amortization for such Refunding
Note and (z) attaching calculations showing that the average life
of such Refunding Note will not be reduced or increased except as
permitted by this paragraph (b). 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).
SECTION 3. Miscellaneous.
(a) Counterpart Execution. This Supplemental
Indenture No. 2 may be executed in any number of counterparts and
by the different parties hereto on 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.
(b) 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 Indenture, this Supplemental Indenture No. 2 shall form a
part thereof. On and after the delivery of this Supplemental
Indenture No. 2, any reference in any Transaction Document to the
Indenture shall be deemed to refer to the Indenture as
supplemented and amended by this Supplemental Indenture No. 2.
(c) Responsibility for Recitals, Etc. The Indenture
Trustee makes no representation or warranty as to the correctness
of any statement, recital or representation made by any Person
other than the Indenture Trustee in this Supplemental Indenture
No. 2, any other Transaction Document or the Refunding Notes or,
except with respect to the due authentication by the Indenture
Trustee of the Refunding Notes, as to the validity or sufficiency
of this Supplemental Indenture No. 2 or the Refunding Notes.
(d) Provisions Binding on Successors. All the
covenants, stipulations, promises and agreements in this
Supplemental Indenture No. 2 contained by or on behalf of the
Owner Trustee shall bind its successors and assigns, whether so
expressed or not.
IN WITNESS WHEREOF, the Owner Trustee and the Indenture
Trustee have each caused this Supplemental Indenture No. 2 to be
duly executed by their respective officers thereunto duly
authorized, all as of the date set forth above.
<PAGE>
MERIDIAN TRUST COMPANY, not in its
individual capacity, but solely as
Corporate Owner Trustee
ATTEST:
____________________ By: ___________________________
Title: Vice President
___________________________________
STEPHEN J. KABA, not in his individual
capacity, but solely as Individual Owner
Trustee
<PAGE>
BANKERS TRUST COMPANY,
ATTEST: not in its individual capacity, but
solely as Corporate Indenture Trustee
____________________ By: ________________________________
Title: Vice President
______________________________________
STANLEY BURG,
not in his individual capacity, but
solely as Individual Indenture Trustee
<PAGE>
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
______, 19__, within my jurisdiction, the within named STEPHEN J.
KABA who acknowledged that he is a Vice President of MERIDIAN
TRUST COMPANY, a Pennsylvania trust company, Corporate Owner
Trustee under that certain Trust Agreement No. 2, dated as of
December 1, 1988 among Lease Management Realty Corporation IV, as
Original Owner Participant, MERIDIAN TRUST COMPANY, as Corporate
Owner Trustee, and STEPHEN J. KABA as successor Individual Owner
Trustee to the original Individual Owner Trustee, Stephen M.
Carta, and that for and on behalf of the said trust company, and
as its act and deed in said capacity as Corporate Owner 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 trust company so to do.
_________________________________
NOTARY PUBLIC
My Commission Expires:
___________________________
<PAGE>
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 _______, 19__ within my jurisdiction, the within named STEPHEN
J. KABA who acknowledged that he is successor Individual Owner
Trustee under that certain Trust Agreement No. [1/2], dated as of
December 1, 1988 among [Public Service Resources
Corporation/Lease Management Realty Corporation IV], as Original
Owner Participant, MERIDIAN TRUST COMPANY, as Corporate Owner
Trustee, and STEPHEN J. KABA as successor Individual Owner
Trustee to the original Individual Owner Trustee, Stephen M.
Carta, and that in his capacity as Individual Owner Trustee he
executed the above and foregoing instrument after first having
been duly authorized so to do.
_________________________________
NOTARY PUBLIC
My Commission Expires:
_________________________
<PAGE>
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 ________, 19_, 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 said corporation, and as its act and deed,
he executed the above and foregoing instrument, after first
having been duly authorized so to do.
_________________________________
NOTARY PUBLIC
My Commission Expires:
__________________________
<PAGE>
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 _______, 19__, within my jurisdiction, the within named
________________, who acknowledged that he is a Vice President of
BANKERS TRUST COMPANY, a New York banking corporation, Corporate
Indenture Trustee under the Indenture, and that for and on behalf
of the said corporation, and as its act and deed in said capacity
as Corporate Indenture 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:
___________________________
<PAGE>
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
________, 19__, within my jurisdiction, the within named STANLEY
BURG, who acknowledged that he executed the above and foregoing
instrument.
_________________________________
NOTARY PUBLIC
My Commission Expires:
____________________________
<PAGE>
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 ___________, 19__, within my jurisdiction, the within named
STANLEY BURG, who acknowledged that he is Individual Indenture
Trustee under the Indenture, and that in his capacity as
Individual Indenture Trustee, he executed the above and foregoing
instrument, after first having been duly authorized so to do.
_________________________________
NOTARY PUBLIC
My Commission Expires:
_________________________
<PAGE>
EXHIBIT A-1 TO
SUPPLEMENTAL
INDENTURE NO. 2
FORM OF PROMISSORY NOTE, FIXED RATE REFUNDING SERIES DUE ____
THIS NOTE 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
PROMISSORY NOTE, FIXED RATE REFUNDING SERIES DUE ____
(DUE _______, 20 ____)
Issue Date: _____, 20____
No. R-1A
FOR VALUE RECEIVED, MERIDIAN TRUST COMPANY and STEPHEN
J. KABA not in their individual capacities, but solely as Owner
Trustee (collectively, the "Owner Trustee") under Trust Agreement
No. 2, dated as of December 1, 1988, with Textron Financial
Corporation (the "Owner Participant" as successor in interest to
Lease Management Realty Corporation IV), hereby promise to pay to
Bankers Trust Company, not in its individual capacity, but solely
as Trustee under the Collateral Trust Indenture, dated as of
January 1, 1994, among GG1B Funding Corporation, System Energy
Resources, Inc. and Bankers Trust Company, as such Collateral
Trust Indenture may be supplemented or amended from time to time,
or registered assigns, the principal sum of _____________________
_________________________________________________ ($___________),
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 (the dates and amounts set forth in Schedule
I being herein called, respectively, "Amortization Dates" and
"Amortization Requirements"); 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 Fixed Rate Note until
due and payable, semiannually in arrears on January 15 and July
15 in each year, commencing July 15, 1994, at the rate of _____%
per annum, until the principal amount hereof is paid in full.
Capitalized terms used in this Fixed Rate Note which
are not otherwise defined herein shall have the meanings ascribed
thereto in the 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
Trust Indenture, Deed of Trust, Mortgage, Security Agreement and
Assignment of Facility Lease No. 2, dated as of December 1, 1988,
as at any time heretofore or hereafter amended or supplemented in
accordance with the provisions thereof (the "Indenture"), between
the Owner Trustee and Bankers Trust Company and Stanley Burg, not
in their individual capacities, but solely as Corporate and
Individual Indenture Trustee, respectively (the "Indenture
Trustee"), shall be made only from the Lease 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 Lease Indenture Estate to make such payments in accordance
with the terms of Article V of the Indenture. The Holder hereof,
by its acceptance of this Fixed Rate Note, shall be deemed to
have agreed that such Holder will look solely to the Trust Estate
and the income and proceeds from the Lease Indenture Estate to
the extent available for distribution to the Holder hereof as
above provided, and that neither the Owner Participant nor,
except as 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 Fixed Rate Note
or for any performance to be rendered under the Indenture or any
Transaction Document or for any liability thereunder; provided,
however, that in the event that the Lessee shall assume all the
obligations of the Owner Trustee hereunder and under the
Indenture pursuant to Section 3.9(b) of the Indenture, or shall
be deemed to have assumed such obligations pursuant to Section
7(b)(4)(H) of the Participation Agreement, then all the payments
to be made on this Fixed Rate Note shall be made only from
payments made by the Lessee under this Fixed Rate Note in
accordance with the Assumption Agreement referred to in said
Section 3.9(b) of the Indenture and the Holder of this Fixed Rate
Note agrees that in such event it will look solely to the Lessee
for such payment and, subject to Section 2.4 of the Indenture, to
the Lease Indenture Estate.
Principal, premium, if any, and interest 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, in
the manner provided in the Indenture, on presentment of this
Fixed Rate Note at the Indenture Trustee's Office, or as
otherwise provided in the Indenture.
In the manner and to the extent provided in the
Indenture, Schedule 1 hereto may be adjusted at the discretion of
the Owner Trustee in connection with an adjustment to Basic Rent
under Section 3(d) or 3(e)(v)(C) of the Facility Lease.
In the event of a partial prepayment of this Fixed Rate
Note (the payment of principal in accordance with Schedule 1
hereto not being considered for this purpose a prepayment), the
Amortization Requirement 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 (A) the
product of (w) the principal amount of such prepayment
(hereinafter called the "Prepaid Amount") and (x) such
Amortization Requirement by (B) the sum of (y) the principal
amount of this Fixed Rate Note then Outstanding (after giving
effect to such prepayment) and (z) the Prepaid Amount; provided,
however, that the remaining Amortization Requirements determined
as set forth in this paragraph shall be rounded to the nearest
integral multiple of $l.00, subject to further necessary
adjustment so that the aggregate principal amount of such
satisfaction of Amortization Requirements shall be equal to the
Prepaid Amount, such adjustment to such Amortization Requirements
to be made in the inverse order of the respective Amortization
Dates corresponding thereto. In connection with such adjustments
to Schedule 1 the Owner Trustee shall deliver to the Indenture
Trustee, not later than 30 days prior to the next date on which a
payment of principal of this Fixed Rate Note is due following
such partial prepayment, a revised Schedule 1 hereto prepared by
the Lessee and approved by the Owner Participant. The Indenture
Trustee may rely on such revised Schedule 1 and shall have no
duty with respect to the adjustments set forth therein other than
to make it available for inspection by the Holder of this Fixed
Rate Note.
The Holder hereof, by its acceptance of this Fixed Rate
Note, agrees that each payment received by it hereunder shall be
applied in the manner set forth in Section 3.11 of the Indenture.
The Holder of this Fixed Rate Note agrees, by its acceptance
hereof, that it will duly note by appropriate means all payments
of principal or interest made hereon and that it will not in any
event transfer or otherwise dispose of this Fixed Rate Note
unless and until all such notations have been duly made and the
other requirements of the Indenture have been complied with.
This Fixed Rate Note is one of the Fixed Rate Notes
referred to in the Indenture. The Indenture permits the issuance
of additional series of Notes, as provided in Section 3.5 of the
Indenture, 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 Lease 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 Fixed Rate Note and all
other Notes issued and outstanding from time to time under the
Indenture. Reference is hereby made to the Indenture for a
statement of the rights of the Holders of, and the nature and
extent of the security for, this Fixed Rate Note and of the
rights of, and the nature and extent of the security for, the
Holders of the other Notes 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
Fixed Rate Note.
This Fixed Rate Note is subject to purchase by the
Owner Trustee as provided in Section 6.8(b) of the Indenture.
This Fixed Rate Note is also subject to prepayment in full, at
the principal amount hereof plus accrued interest to the date
fixed for prepayment, in the event of the termination of the
Lease pursuant to Section 13(f) or (g) or Section 14 thereof, or
Section 10(b)(3)(ix) of the Participation Agreement, subject,
however, except in the case of a termination pursuant to Section
14 of the Lease, to the right of the Lessee to assume this Fixed
Rate Note on the Lease Termination Date, in which event there
shall be no redemption of this Fixed Rate Note as a consequence
of such termination.
In addition, this Fixed Rate Note may be prepaid in
whole or in part at any time on or after _______ __, 19__ at the
following prepayment prices (expressed as a percentage of the
principal amount hereof being prepaid), together with interest
accrued to the date fixed for prepayment:
If Prepaid in the
12 Month Period Prepayment
Beginning January 15 Price
____ ___.__%
____ ___.___
____ ___.___
____ ___.___
____ ___.___
and thereafter at the principal amount thereof, together with
interest accrued to the date fixed for prepayment.
In the case an Indenture Event of Default shall occur
and be continuing, the unpaid balance of the principal of this
Fixed Rate Note and any other Notes, together with all accrued
but unpaid interest 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 Fixed Rate
Note, and the lien of the Indenture or the Lease Indenture
Estate, is subject to being legally discharged prior to the
maturity of this Fixed Rate Note upon the deposit with the
Indenture Trustee of cash or certain securities sufficient to pay
this Fixed Rate Note when due in accordance with the terms of the
Indenture.
There shall be maintained at the Indenture Trustee's
Office a register for the purpose of registering transfers and
exchanges of Notes in the manner provided in the Indenture. The
transfer of this Fixed Rate Note is registrable, as provided in
the Indenture, upon surrender of this Fixed Rate Note for
registration of transfer duly accompanied by a written instrument
of transfer duly executed by or on behalf of the registered
Holder hereof, together with the amount of any applicable
transfer taxes. The Owner Trustee and the Indenture Trustee may
treat the person in whose name this Fixed Rate Note is registered
as the owner hereof for the purpose of receiving payments of
principal of and premium, if any, and interest on this Fixed Rate
Note and for all other purposes whatsoever, whether or not this
Fixed Rate Note be overdue, and neither the Owner Trustee nor the
Indenture Trustee shall be affected by notice to the contrary.
This Fixed Rate Note shall be governed by, and
construed in accordance with, the law of the State of New York.
<PAGE>
IN WITNESS WHEREOF, the Corporate Owner Trustee has
caused this Fixed Rate Note to be duly executed as of the date
hereof.
MERIDIAN TRUST COMPANY, not in its
individual capacity, but solely as
Corporate Owner Trustee under the
Trust Agreement
By: ____________________________
Title:
This Fixed Rate Note is one of the series of Notes
referred to therein and in the within-mentioned Indenture.
BANKERS TRUST COMPANY, not in its
individual capacity, but solely as
Corporate Indenture Trustee
By: ___________________________
Title:
<PAGE>
SCHEDULE 1
SCHEDULE OF PRINCIPAL AMORTIZATION
Payment Principal Principal
Date Amount Payable Balance
<PAGE>
EXHIBIT A-2 TO
SUPPLEMENTAL
INDENTURE NO. 2
FORM OF PROMISSORY NOTE, FIXED RATE REFUNDING SERIES DUE ____
THIS NOTE 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
PROMISSORY NOTE, FIXED RATE REFUNDING SERIES DUE ____
(DUE _______ __, 20__)
Issue Date: _____ __, ____
No. R-1B
FOR VALUE RECEIVED, MERIDIAN TRUST COMPANY and STEPHEN
J. KABA not in their individual capacities, but solely as Owner
Trustee (collectively, the "Owner Trustee") under Trust Agreement
No. 2, dated as of December 1, 1988, with Textron Financial
Corporation (the "Owner Participant" as successor in interest to
Lease Management Realty Corporation IV), hereby promise to pay to
Bankers Trust Company, not in its individual capacity, but solely
as Trustee under the Collateral Trust Indenture, dated as of
January 1, 1994, among GG1B Funding Corporation, System Energy
Resources, Inc. and Bankers Trust Company, as such Collateral
Trust Indenture may be supplemented or amended from time to time,
or registered assigns, the principal sum of _____________________
_______________________________________________ ($____________),
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 (the dates and amounts set forth in Schedule
I being herein called, respectively, "Amortization Dates" and
"Amortization Requirements"); 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 Fixed Rate Note until
due and payable, semiannually in arrears on January 15 and July
15 in each year, commencing July 15, 1994, at the rate of ____%
per annum, until the principal amount hereof is paid in full.
Capitalized terms used in this Fixed Rate Note which
are not otherwise defined herein shall have the meanings ascribed
thereto in the 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
Trust Indenture, Deed of Trust, Mortgage, Security Agreement and
Assignment of Facility Lease No. 2, dated as of December 1, 1988,
as at any time heretofore or hereafter amended or supplemented in
accordance with the provisions thereof (the "Indenture"), between
the Owner Trustee and Bankers Trust Company and Stanley Burg, not
in their individual capacities but solely as Corporate and
Individual Indenture Trustee, respectively (the "Indenture
Trustee"), shall be made only from the Lease 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 Lease Indenture Estate to make such payments in accordance
with the terms of Article V of the Indenture. The Holder hereof,
by its acceptance of this Fixed Rate Note, shall be deemed to
have agreed that such Holder will look solely to the Trust Estate
and the income and proceeds from the Lease Indenture Estate to
the extent available for distribution to the Holder hereof as
above provided, and that neither the Owner Participant nor,
except as 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 Fixed Rate Note
or for any performance to be rendered under the Indenture or any
Transaction Document or for any liability thereunder; provided,
however, that in the event that the Lessee shall assume all the
obligations of the Owner Trustee hereunder and under the
Indenture pursuant to Section 3.9(b) of the Indenture, or shall
be deemed to have assumed such obligations pursuant to Section
7(b)(4)(H) of the Participation Agreement, then all the payments
to be made on this Fixed Rate Note shall be made only from
payments made by the Lessee under this Fixed Rate Note in
accordance with the Assumption Agreement referred to in said
Section 3.9(b) of the Indenture and the Holder of this Fixed Rate
Note agrees that in such event it will look solely to the Lessee
for such payment and, subject to Section 2.4 of the Indenture, to
the Lease Indenture Estate.
Principal, premium, if any, and interest 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, in
the manner provided in the Indenture, on presentment of this
Fixed Rate Note at the Indenture Trustee's Office, or as
otherwise provided in the Indenture.
In the manner and to the extent provided in the
Indenture, Schedule 1 hereto may be adjusted at the discretion of
the Owner Trustee in connection with an adjustment to Basic Rent
under Section 3(d) or 3(e)(v)(C) of the Facility Lease.
In the event of a partial prepayment of this Fixed Rate
Note (the payment of principal in accordance with Schedule 1
hereto not being considered for this purpose a prepayment), the
Amortization Requirement 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 (A) the
product of (w) the principal amount of such prepayment
(hereinafter called the "Prepaid Amount") and (x) such
Amortization Requirement by (B) the sum of (y) the principal
amount of this Fixed Rate Note then Outstanding (after giving
effect to such prepayment) and (z) the Prepaid Amount; provided,
however, that the remaining Amortization Requirements determined
as set forth in this paragraph shall be rounded to the nearest
integral multiple of $1.00, subject to further necessary
adjustment so that the aggregate principal amount of such
satisfaction of Amortization Requirements shall be equal to the
Prepaid Amount, such adjustment to such Amortization Requirements
to be made in the inverse order of the respective Amortization
Dates corresponding thereto. In connection with such adjustments
to Schedule 1 the Owner Trustee shall deliver to the Indenture
Trustee, not later than 30 days prior to the next date on which a
payment of principal of this Fixed Rate Note is due following
such partial prepayment, a revised Schedule 1 hereto prepared by
the Lessee and approved by the Owner Participant. The Indenture
Trustee may rely on such revised Schedule 1 and shall have no
duty with respect to the adjustments set forth therein other than
to make it available for inspection by the Holder of this Fixed
Rate Note.
The Holder hereof, by its acceptance of this Fixed Rate
Note, agrees that each payment received by it hereunder shall be
applied in the manner set forth in Section 3.11 of the Indenture.
The Holder of this Fixed Rate Note agrees, by its acceptance
hereof, that it will duly note by appropriate means all payments
of principal or interest made hereon and that it will not in any
event transfer or otherwise dispose of this Fixed Rate Note
unless and until all such notations have been duly made and the
other requirements of the Indenture have been complied with.
This Fixed Rate Note is one of the Fixed Rate Notes
referred to in the Indenture. The Indenture permits the issuance
of additional series of Notes, as provided in Section 3.5 of the
Indenture, 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 Lease 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 Fixed Rate Note and all
other Notes issued and outstanding from time to time under the
Indenture. Reference is hereby made to the Indenture for a
statement of the rights of the Holders of, and the nature and
extent of the security for, this Fixed Rate Note and of the
rights of, and the nature and extent of the security for, the
Holders of the other Notes 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
Fixed Rate Note.
This Fixed Rate Note is subject to purchase by the
Owner Trustee as provided in Section 6.8(b) of the Indenture.
This Fixed Rate Note is also subject to prepayment in full, at
the principal amount hereof plus accrued interest to the date
fixed for prepayment, in the event of the termination of the
Lease pursuant to Section 13(f) or (g) or Section 14 thereof, or
Section 10(b)(3)(ix) of the Participation Agreement, subject,
however, except in the case of a termination pursuant to Section
14 of the Lease, to the right of the Lessee to assume this Fixed
Rate Note on the Lease Termination Date, in which event there
shall be no redemption of this Fixed Rate Note as a consequence
of such termination.
In addition, this Fixed Rate Note may be prepaid in
whole or in part at any time on or after ________ __, ____ at the
following prepayment prices (expressed as a percentage of the
principal amount hereof being prepaid), together with interest
accrued to the date fixed for prepayment:
If Prepaid in the
12 Month Period Prepayment
Beginning January 15 Price
and thereafter at the principal amount thereof, together with
interest accrued to the date fixed for prepayment.
In the case an Indenture Event of Default shall occur
and be continuing, the unpaid balance of the principal of this
Fixed Rate Note and any other Notes, together with all accrued
but unpaid interest 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 Fixed Rate
Note, and the lien of the Indenture or the Lease Indenture
Estate, is subject to being legally discharged prior to the
maturity of this Fixed Rate Note upon the deposit with the
Indenture Trustee of cash or certain securities sufficient to pay
this Fixed Rate Note when due in accordance with the terms of the
Indenture.
There shall be maintained at the Indenture Trustee's
Office a register for the purpose of registering transfers and
exchanges of Notes in the manner provided in the Indenture. The
transfer of this Fixed Rate Note is registrable, as provided in
the Indenture, upon surrender of this Fixed Rate Note for
registration of transfer duly accompanied by a written instrument
of transfer duly executed by or on behalf of the registered
Holder hereof, together with the amount of any applicable
transfer taxes. The Owner Trustee and the Indenture Trustee may
treat the person in whose name this Fixed Rate Note is registered
as the owner hereof for the purpose of receiving payments of
principal of and premium, if any, and interest on this Fixed Rate
Note and for all other purposes whatsoever, whether or not this
Fixed Rate Note be overdue, and neither the Owner Trustee nor the
Indenture Trustee shall be affected by notice to the contrary.
This Fixed Rate Note shall be governed by, and
construed in accordance with, the law of the State of New York.
<PAGE>
IN WITNESS WHEREOF, the Corporate Owner Trustee has
caused this Fixed Rate Note to be duly executed as of the date
hereof.
MERIDIAN TRUST COMPANY, not in its
individual capacity, but solely as
Corporate Owner Trustee under the Trust
Agreement
By: _________________________________
Title:
This Fixed Rate Note is one of the series of Notes
referred to therein and in the within-mentioned Indenture.
BANKERS TRUST COMPANY, not in its
individual capacity, but solely as
Corporate Indenture Trustee
By: _________________________________
Title:
<PAGE>
SCHEDULE 1
SCHEDULE OF PRINCIPAL AMORTIZATION
Payment Principal Principal
Date Amount Payable Balance
Exhibit B-9
________________________________________________________
$435,102,000
SYSTEM ENERGY RESOURCES, INC.
GG1B Funding Corporation
UNDERWRITING AGREEMENT
Secured Lease Obligation Bonds
________________________________________________________
<PAGE>
January 11, 1994
MORGAN STANLEY & CO. INCORPORATED
BEAR, STEARNS & CO. INC.
GOLDMAN, SACHS & CO.
c/o MORGAN STANLEY & CO. INCORPORATED
1251 Avenue of the Americas
New York, New York 10020
Ladies and Gentlemen:
Each of the undersigned, System Energy Resources, Inc.
(the "Company") and GG1B 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 $356,056,000 in aggregate principal
amount of its Secured Lease Obligation Bonds 7.43% Series due
January 15, 2011 (the "Short Bonds") and $79,046,000 in aggregate
principal amount of its Secured Lease Obligation Bonds 8.20%
Series due January 15, 2014 (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 referred to in Section 4(a)(ii). The
Bonds will be issued under a Collateral Trust Indenture dated as
of January 1, 1994, as supplemented by Supplemental Indenture No.
1 thereto dated as of January 1, 1994, 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, and subject to the terms and
conditions set forth in this agreement (the "Underwriting
Agreement"), the Underwriters shall purchase from the Funding
Corporation, 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 (if any) from the date of issuance
to the date of payment for and delivery of the Bonds:
Short Bonds
Price: 100%
Name Principal Amount
Morgan Stanley & Co. Incorporated $118,686,000
Bear, Stearns & Co. Inc. 118,685,000
Goldman, Sachs & Co. 118,685,000
------------
$356,056,000
Long Bonds
Price: 100%
Name Principal Amount
Morgan Stanley & Co. Incorporated $ 26,349,000
Bear, Stearns & Co. Inc. 26,349,000
Goldman, Sachs & Co. 26,348,000
------------
$ 79,046,000
It is understood that the Underwriters will offer the
Bonds for sale as set forth in the Prospectus (as hereinafter
defined). 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 .750% of the
principal amount thereof ($2,670,420) in respect of the Short
Bonds and an underwriting commission of .875% of the principal
amount thereof ($691,652) in respect of the Long 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 Trust Indenture (including
Supplemental Indenture No. 1 thereto) 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 each of the Underwriters that:
(i) The Company is duly organized and validly existing
as a corporation in good standing under the laws of the
State of Arkansas 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. 33-51175) for the
registration of $435,102,000 principal amount of the Funding
Corporation's Secured Lease Obligation Bonds under the
Securities Act of 1933, as amended (the "Securities Act"),
and the registration statement has become effective. The
prospectus forming a part of the 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
the Basic Prospectus shall have been amended, revised or
supplemented prior to the time of effectiveness of the
Underwriting Agreement, and with respect to any documents
filed by the Company pursuant to Section 13 or 14 of the
Securities Exchange Act of 1934, as amended ("Exchange
Act"), after the time the registration statement initially
became effective and up to the time of effectiveness of the
Underwriting Agreement, which documents are deemed to be
incorporated by reference in the Basic Prospectus, the term
"Basic Prospectus" as used herein shall also mean such
prospectus as so amended, revised or supplemented. The
registration statement as it initially became effective and
as it may have been amended by any amendment thereto
included in the Basic Prospectus (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 offering
and sale of the Bonds by a prospectus supplement
("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. After the time of effectiveness of the
Underwriting Agreement and during the time specified in
Section 7(d), the Company will not file (i) any amendment to
the Registration Statement or supplement to the Prospectus
or (ii) prior to the time that the Prospectus is filed with,
or transmitted for filing to, the Commission pursuant to
Rule 424, any document which is to be incorporated by
reference in, or any supplement to (including the Prospectus
Supplement), 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 the Underwriting Agreement, any document which is filed
with the Commission after the time of effectiveness of the
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.
(iii) The Registration Statement, at the time of its
effectiveness, fully complied, and the Prospectus, at the
time it is first filed with, or transmitted for filing to,
the Commission pursuant to Rule 424 and at the Closing Date
(hereinafter defined) as it may then be amended or
supplemented, will fully comply, in all material respects
with the applicable provisions of the Securities Act and the
Trust Indenture Act of 1939, as amended (the "TIA"), and the
applicable rules and regulations of the Commission
thereunder or pursuant to said rules and regulations are 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 are or will be deemed to comply therewith. On
the later of (i) the date that the Registration Statement or
any post-effective amendment thereto was or is declared
effective by the Commission under the Securities Act and
(ii) the date that the Company's most recent Annual Report
on Form 10-K was filed with the Commission under the
Exchange Act, the Registration Statement 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 filed
with, or transmitted for filing to, the Commission pursuant
to Rule 424 and at the Closing Date (hereinafter defined),
the Prospectus, as it may be amended or supplemented, will
not include 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. 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 required to be stated therein or necessary 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 (iii)
shall not apply to statements in or omissions from the
Registration Statement or the Prospectus, as they may be
amended or supplemented, made in reliance upon and in
conformity with information furnished herein or in writing
to the Company by or through any Underwriter specifically
for use in connection with the preparation of the
Registration Statement or the Prospectus or any amendment or
supplement thereto or to statements in, or omissions from,
the statements of eligibility, as they may be amended, under
the TIA of the Trustee and of Stanley Burg.
(iv) Each of (A) the Participation Agreements and the
Leases (as defined in the Prospectus), (B) the Purchase
Documents, the Plant Agreements, the Ground Leases and the
Assignment and Assumption Agreements (as defined in the
Participation Agreements), (C) the Trust Indenture, and
(D) the Refunding Agreements Nos. 1-A and 2-A, dated as of
January 1, 1994, among the Funding Corporation, the Company,
the Owner Participant named therein, Meridian Trust Company,
Stephen J. Kaba, Bankers Trust Company and Stanley Burg (the
"Refunding Agreements") (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 and 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.
(v) The issuance and sale of the Bonds and the
fulfillment of the terms of the Underwriting Agreement will
not result in a breach of any of the terms or provisions of,
or constitute a default under, the Trust Indenture or any
other indenture, mortgage, deed of trust or other agreement
or instrument to which the Company is now a party.
(vi) 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.
(vii) It is not necessary for the Funding Corporation to
register as an investment company pursuant to the Investment
Company Act of 1940 in order to participate in the transactions
contemplated by the Prospectus.
(b) The Funding Corporation represents and warrants to
each of the Underwriters that each of the Participation
Agreements, the Refunding Agreements, the Trust Indenture and the
Bonds has been or, as of the Closing Date (hereinafter defined),
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 and 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 5. 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
Underwriting Agreement has become effective 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
public offering prices set forth below (expressed as percentages
of the principal amount of the Bonds) plus accrued interest from
the date of issuance to the date of delivery. The Bonds may also
be offered to certain dealers selected by the Underwriters at
prices which represent concessions under the public offering
prices, and any Underwriter may allow, and such dealers may
reallow, concessions not in excess of the principal amount of
the Bonds to certain other dealers, all as indicated below
(expressed as percentages of the principal amount of the Bonds):
Public Offering
Price Concession Reallowance
Short Bonds 100% .45% .25%
Long Bonds 100% .50% .25%
SECTION 6. Time and Place of Closing. Delivery of
the Bonds and payment 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, 40 West 57th Street, New
York, New York, at 10:00 A.M., New York time, on January 18,
1994, 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. The hour and date of such delivery and payment are
herein called the "Closing Date."
The Bonds shall be delivered to you in such authorized
denominations and registered in such names as Morgan Stanley &
Co. Incorporated may request in writing by the close of business
at least three business days prior to the Closing Date or, to the
extent not so requested, in the names of the Underwriters in such
denominations as the Company shall determine. 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 7. 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
including the related prospectus and of all amendments or
supplements thereto, 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 Rule 424(b) within the time period required by Section
8(a) hereof. The Company or the Funding Corporation will
advise the Underwriters 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 relating to the
Bonds, if any event relating to or affecting the Company or
the Funding Corporation, or of which the Company shall be
advised by you 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, or cause to be amended or supplemented,
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 or 14 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 any
material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a
purchaser, not misleading; provided that, 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 initial
effective date of the Registration Statement 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, (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 and the
determination of the eligibility of the Bonds for investment
under the 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 Blue Sky Survey, any Preliminary Legality
Memorandum and the Prospectus and any amendment or
supplement thereto, except as otherwise provided in
paragraph (d) of this Section, (v) fees of the rating
agencies in connection with the ratings of the Bonds,
(vi) fees (if any) of the National Association of Securities
Dealers, Inc. ("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, the Company will
reimburse the Underwriters for (i) reasonable fees and
expenses of Counsel for the Underwriters, whose fees and
expenses the Underwriters agree to pay in any other event,
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 8. 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
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 or the
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 be in full force
and effect 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 Wise Carter Child & Caraway, Professional
Association; Reid & Priest; and Friday, Eldredge & Clark, as
counsel to the Company; and Reid & Priest, as counsel to the
Funding Corporation, opinions, dated the Closing Date,
substantially in the forms set forth in Exhibits A, B, C and
D 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 Counsel for the Underwriters an opinion, dated
the Closing Date, substantially in the form set forth in
Exhibit E 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 Deloitte & Touche 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 audited 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 related 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 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, 1992 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 Deloitte & Touche make no
representations as to the sufficiency of such procedures for
the Underwriters' purposes), nothing has come to their
attention which caused them to believe that (A) the
unaudited financial statements of the Company 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 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 included or
incorporated by reference in the Prospectus and specified in
Exhibit F hereto 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 or a Vice President 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 or a Vice President 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,
such Prospectus; and (iii) a certificate, dated the Closing
Date and signed by the President, a Vice President or the
Treasurer of Entergy or the Vice President Financial
Strategies of Entergy Services, Inc., to the effect 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
Entergy and its subsidiaries considered as a whole.
(h) At the Closing Date, the Underwriters shall have
received from Deloitte & Touche 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.
(i) 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, the Lease Indenture (as defined in the
Prospectus) or the Trust Indenture shall have occurred.
(j) Between the date hereof and the Closing Date, no
other event shall have occurred with respect to or otherwise
affecting the Company, or the Entergy System as a whole as
it affects the Company, which, in the reasonable opinion of
the Underwriters, materially impairs the investment quality
of the Bonds.
(k) Between the date hereof and the Closing Date,
neither Moody's Investors Service, Inc. nor Standard and
Poor's Corporation shall have lowered its ratings of the
Bonds or the Company's First Mortgage Bonds in any respect.
(l) The Bonds shall, upon delivery to the Underwriters
in accordance with this Underwriting Agreement, be secured
by notes in accordance with the Trust Indenture; the
conditions precedent to a refunding, as set forth in the
Participation Agreement (including, without limitation,
Sections 2(d) and 11(c) thereof) and the Refunding
Agreements (including, without limitation, Section 5
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.
(m) The opinions of counsel required to be delivered
by the first two sentences of Section 11(c)(6) 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 NRC Counsel
and Special Mississippi Counsel to the Owner Participants
and the opinion of the Lessee's Special Louisiana Counsel,
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.
(n) 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.
(o) 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.
The Funding Corporation and the Company will furnish
the Underwriters with such conformed copies of such opinions,
certificates, letters and documents as may be reasonably
requested.
If any of the conditions specified in this Section
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 Section 11.
SECTION 9. 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) 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, and no proceedings for that purpose shall be
pending before, or threatened by, the Commission on the
Closing Date.
(c) 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
shall not have been fulfilled, this Underwriting Agreement may be
terminated by the Company upon notice thereof to Morgan Stanley &
Co. Incorporated, provided that, in the case of paragraph (a)
above, the Company and the Funding Corporation shall have used
their best efforts to comply with the requirements of Rule 424.
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 Section 11.
SECTION 10. 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 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 such Underwriter and
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 contained in the Registration Statement, as amended or
supplemented, or the omission or alleged omission to state
therein a material fact 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 the
Commission pursuant to Rule 424), or in the Prospectus, as
amended or supplemented (if any amendments or supplements shall
have been made), or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein, in the 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 in writing to the Company by such Underwriter
specifically for use in connection with the preparation of 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 Registration Statement or the Prospectus or
any amendment or supplement to any thereof or arising out of or
based upon statements in or omissions from that part of the
Registration Statement that constitutes the statements of
eligibility under the TIA of the Trustee and Stanley Burg; and
provided further, that the indemnity agreement contained in this
subsection shall not inure to the benefit of any Underwriter or
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 the Basic
Prospectus or the Prospectus, as supplemented or amended
(excluding in both cases, however, any document then incorporated
or deemed incorporated by reference therein pursuant to Item 12
of Form S-3), furnished by an Underwriter to a person to whom any
of the Bonds were sold, 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.
(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, 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 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
(if any amendments or supplements thereto shall have been
furnished), or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to
make the statements therein, in the 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 in writing to the
Company by such Underwriter specifically for use in connection
with the preparation of 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), the Registration
Statement 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 or parties in respect of which indemnity may be sought
pursuant to any of the preceding paragraphs, such party or
parties (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),
which separate firm (or firms), in the case of the Underwriters
being the indemnified parties, shall be designated in writing by
Morgan Stanley & Co. Incorporated). 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. An indemnifying party shall not, without the prior
written consent of the indemnified party, effect any settlement
of any pending or threatened litigation, proceeding or claim in
respect of which indemnity has been properly sought by any
indemnified party or by any person controlling any indemnified
party hereunder, unless such settlement includes an unconditional
release of such indemnified party or such person controlling any
indemnified party from all liability with respect to claims which
are the subject matter of such litigation, proceeding or claim.
(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) to the Company 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 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 11. Survival of Certain Representations and
Obligations. Any other provision of this Underwriting Agreement
to the contrary notwithstanding, the indemnity and contribution
agreements contained in Section 10 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 any
person controlling any Underwriter or by or on behalf of the
Funding Corporation or the Company, its directors or officers or
the person controlling the Company and (ii) acceptance of
and payment for the Bonds. In addition, 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 12. 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 or
Underwriters 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 severally in the
proportions which the amounts of Bonds set forth opposite their
names in Section 2 hereof bear to the aggregate principal amount
of Bonds set forth opposite the names of all such non-defaulting
Underwriters, to purchase the Bonds which such defaulting
Underwriter or Underwriters 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 the written consent of such Underwriter. If any
Underwriter or Underwriters 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 such non-defaulting Underwriters to purchase and
pay for the respective principal amounts of Bonds that they had
severally agreed to purchase hereunder, as hereinabove provided,
and, in addition, the principal amount of Bonds that the
defaulting Underwriter or Underwriters shall have so failed to
purchase up to a principal amount thereof equal to one-ninth of
the respective principal amounts 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 or
Underwriters 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 or Underwriters 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 the 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 13. Termination. This Underwriting Agreement
shall be subject to termination by notice given by 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, 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, 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 Underwriters' judgment, 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 the Underwriters
impracticable to market 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 14. 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 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 controlling person 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 15. 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 1340 Echelon Parkway, Jackson,
Mississippi 39213, Attention: Vice President - Financial
Strategies or, if to the Funding Corporation, shall be mailed or
delivered to it c/o National Corporate Research, Ltd., 15 North
Street, City of Dover, County of Kent, State of Delaware, 19901,
Attention: Joseph Mirrione, with a copy to Peter O'Brien, Reid &
Priest, 40 W. 57th Street, New York, NY 10019.
<PAGE>
Very truly yours,
GG1B Funding Corporation
By:
Name:
Title:
SYSTEM ENERGY RESOURCES, INC.
By: /s/ Glenn E. Harder
Name: Glenn E. Harder
Title: Vice President -
Financial Strategies and
Treasurer
By:
Attorney-in-fact
Accepted as of the date first above written:
MORGAN STANLEY & CO. INCORPORATED
BEAR, STEARNS & CO. INC.
GOLDMAN, SACHS & CO.
By: MORGAN STANLEY & CO. INCORPORATED
By:
Name:
Title:
<PAGE>
EXHIBIT A
[Letterhead of Wise Carter Child & Caraway]
MORGAN STANLEY & CO. INCORPORATED
BEAR, STEARNS & CO. INC.
GOLDMAN, SACHS & CO.
c/o MORGAN STANLEY & CO. INCORPORATED
1251 Avenue of the Americas
New York, New York 10020
Ladies and Gentlemen:
We, together with Reid & Priest, of New York, N.Y.,
have acted as counsel for System Energy Resources, Inc. (the
"Company") in connection with the sale to you, the several
Underwriters, pursuant to and subject to the conditions of the
Underwriting Agreement, effective (the "Underwriting
Agreement"), among GG1B Funding Corporation (the "Funding
Corporation"), the Company and you, of $____________ aggregate
principal amount of the Funding Corporation's Secured Lease
Obligation Bonds _____% Series due ____ and $___________
aggregate principal amount of its Secured Lease Obligation Bonds
_____% Series due ____ (the "Bonds"). The Bonds are being issued
pursuant to the Collateral Trust Indenture dated as of
, as amended by Supplemental Indenture No. 1 thereto, dated as of
(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 delivered to you pursuant
to Section 8(d) of the Underwriting
Agreement.
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 Amended and Restated Articles of
Incorporation and By-Laws, as amended; (b) the Underwriting
Agreement; (c) the Trust Indenture; (d) the Registration
Statement and Prospectus (such terms having the same meaning
herein as in the Underwriting Agreement) filed under the
Securities Act of 1933, as amended (the "Securities Act"); (e)
the documents incorporated by reference in the Registration
Statement and Prospectus; (f) 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 (g) the proceedings before the
Securities and Exchange Commission (the "Commission") under the
Public Utility Holding Company Act of 1935, as amended (the "1935
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 a specimen thereof, and we have relied
upon a certificate of the Trustee under the Trust Indenture as to
the authentication and delivery thereof.
Based upon the foregoing, and 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
Arkansas, 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 States of Arkansas and Mississippi.
(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 of the Company
enforceable against the Company in accordance with its terms,
except as limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization and other laws affecting
creditors' rights or remedies for the enforcement of the security
interest provided by the Trust Indenture 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 Trust Indenture Act of 1939, as amended
(the "TIA"), and no proceedings to suspend the such qualification
have been instituted or, to our knowledge, threatened by the
Commission.
(3) The Underwriting Agreement has been duly and
validly authorized, executed and delivered by the Company.
(4) The statements made in the Prospectus under the
captions "Selected Information", "Selected Information Relating
to the Bonds", "Certain Terms of the Bonds", "Security and Source
of Payment for the Bonds", "Description of the Bonds and the
Indenture", "Description of the Lease Indentures", "Description
of the Leases" and "Other Agreements", insofar as such statements
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
and the consummation of the transactions contemplated thereby (a)
will not violate or conflict with any provision of the Company's
Amended and Restated Articles of Incorporation or By-laws, as
amended, (b) will not violate or conflict with 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 (other than 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 respective 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 approvals, authorizations,
orders, licenses, permits, franchises and consents of, and
registrations, declarations and filings with, governmental
authorities may be required to be obtained or made, as the case
may be (1) in connection or compliance with the provisions of the
securities or blue sky laws of any jurisdiction, (2) in
connection with the construction, acquisition, ownership,
operation and maintenance of the Grand Gulf Nuclear Electric
Generating Station and (3) as set forth in the exceptions to the
opinions set forth in paragraph (7) below).
(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 (except with respect to the part of the Registration
Statement that constitutes the statements of eligibility of the
Trustee and Stanley Burg, upon which we do not pass), at the date
of its effectiveness, and the Prospectus, at the time it was
filed with the Commission pursuant to Rule 424(b) under the
Securities Act, complied as to form in all material respects with
the applicable requirements of the Securities Act, 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 Securities Exchange Act of 1934, as amended (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 1935 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 the declaration of
effectiveness of the Registration Statement under the Securities
Act or in connection or compliance with the provisions of the
securities or blue sky laws of any jurisdiction) is legally
required to permit the valid issuance and sale by the Funding
Corporation of the Bonds to the Underwriters pursuant to the
Underwriting Agreement or the execution and delivery of the Trust
Indenture by the Company; and no further approval, authorization,
consent or other order of any governmental body is legally
required to permit the performance (other than that relating to
the construction, acquisition, ownership, operation and
maintenance of the Grand Gulf Nuclear Electric Generating
Station) by the Company of its obligations with respect to the
Bonds or under the Trust Indenture and the Underwriting
Agreement.
(8) No legal or governmental proceedings to which the
Company is a party, or of which its property is the subject, that
are of a character required to be disclosed in the Registration
Statement or the Prospectus and which are not disclosed and
properly described therein as required are pending or, to our
knowledge, threatened; and we do not know of any contracts or
other documents of the Company of a character required to be
filed as exhibits to the Registration Statement or the Prospectus
which are not so filed, or any contracts or other documents of
the Company of a character required to be disclosed in the
Registration Statement or the Prospectus which are not disclosed
and properly described therein as required; the descriptions in
the Registration Statement and Prospectus of statutes, legal and
governmental proceedings and contracts and other documents are
accurate and fairly present the information required to be shown.
(9) Except as disclosed in the Prospectus, there is no
action, suit, proceeding or investigation pending against or
affecting the Company or any of its assets the result of which
would, in our opinion, have a materially adverse effect on the
issuance and sale of the Bonds in accordance with the
Underwriting Agreement.
In passing upon the forms of the Registration Statement
and the Prospectus, we necessarily assume the correctness and
completeness 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 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,
with Deloitte & Touche, the independent certified public
accountants who audited certain of the financial statements
included or incorporated by reference in the Registration
Statement, and with your representatives. 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 its 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 filed with the Commission pursuant to
Rule 424(b) 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 or as
to the statements of eligibility on Form T-1 and T-2 filed as
exhibits to the Registration Statement.
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 Mississippi 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 and Winthrop, Stimson, Putnam &
Roberts, and we concur in the conclusions expressed therein
insofar as they involve questions of Mississippi law. As to all
matters of Arkansas and New York law, we have relied, in the case
of Arkansas law, upon the opinion of even date herewith addressed
to us of Friday, Eldredge & Clark of Little Rock, Arkansas, and
in the case of New York law, upon the opinion of even date
herewith addressed to you of Reid & Priest.
With respect to the opinion set forth in paragraph 2
above, we call your attention to the fact that the provisions of
the Atomic Energy Act of 1954, as amended, and regulations
promulgated thereunder impose certain licensing and other
requirements upon persons (such as the Trustee or other
purchasers pursuant to the remedial provisions of the Trust
Indenture) who seek to acquire, possess or use nuclear production
facilities.
The opinion set forth above is solely for the benefit
of the addressees of this Letter and may not be relied upon in
any manner by any other person without our prior written consent,
except that Reid & Priest and Winthrop, Stimson, Putnam & Roberts
may rely on this opinion as to all matters of Mississippi law in
rendering their opinions required to be delivered under the
Underwriting Agreement.
Very truly yours,
WISE CARTER CHILD & CARAWAY
Professional Association
By:
<PAGE>
EXHIBIT B
[Letterhead of Reid & Priest
Counsel to the Company]
MORGAN STANLEY & CO. INCORPORATED
BEAR, STEARNS & CO. INC.
GOLDMAN, SACHS & CO.
c/o MORGAN STANLEY & CO. INCORPORATED
1251 Avenue of the Americas
New York, New York 10020
Ladies and Gentlemen:
We, together with Wise Carter Child & Caraway,
Professional Association, of Jackson, Mississippi, have acted as
counsel for System Energy Resources, Inc. (the "Company") in
connection with the sale to you, the several Underwriters,
pursuant to and subject to the conditions of the Underwriting
Agreement, effective (the "Underwriting
Agreement"), among GG1B Funding Corporation (the "Funding
Corporation"), the Company and you, of $___________ aggregate
principal amount of the Funding Corporation's Secured Lease
Obligation Bonds, _____% Series due ____ and $___________
aggregate principal amount of its Secured Lease Obligation Bonds
_____% Series due ____ (the "Bonds"). The Bonds are being issued
pursuant to the Collateral Trust Indenture, dated as of
, as amended by Supplemental Indenture No. 1, dated as of
(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 delivered to you pursuant
to Section 8(d) of the Underwriting Agreement.
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 Amended and Restated Articles
of Incorporation and By-Laws, as amended; (b) the Underwriting
Agreement; (c) the Trust Indenture; (d) the Registration
Statement and Prospectus (such terms having the same meaning
herein as in the Underwriting Agreement) filed under the
Securities Act of 1933, as amended (the "Act"); (e) the documents
incorporated by reference in the Registration Statement and
Prospectus; (f) 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 (g) the proceedings before the Securities and Exchange
Commission (the "Commission") under the Public Utility Holding
Company Act of 1935, as amended (the "1935 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 a
specimen thereof, and we have relied upon a certificate of the
Trustee under the Trust Indenture as to the authentication and
delivery thereof.
Based upon the foregoing, and 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
Arkansas, 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 States of Arkansas and Mississippi.
(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 of the Company
enforceable against the Company in accordance with its terms,
except as limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization and other laws affecting
creditors' rights or remedies for the enforcement of the security
interest provided by the Trust Indenture 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 Trust Indenture Act of 1939, as amended
(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 and
validly authorized, executed and delivered by the Company.
(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 or conflict with any provision of the Company's
Amended and Restated Articles of Incorporation or By-laws, as
amended, (b) will not violate or conflict with 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 (other than 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 respective 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 approvals, authorizations,
orders, licenses, permits, franchises and consents of, and
registrations, declarations and filings with, governmental
authorities may be required to be obtained or made, as the case
may be (1) in connection or compliance with the provisions of the
securities or blue sky laws of any jurisdiction, (2) in
connection with the construction, acquisition, ownership,
operation and maintenance of the Grand Gulf Nuclear Electric
Generating Station and (3) as set forth in the exceptions to the
opinions set forth in paragraph 6 below).
(5) 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 (except with respect to the part of the Registration
Statement that constitutes the statements of eligibility of the
Trustee and Stanley Burg, upon which we do not pass), at the date
of its effectiveness, and the Prospectus, at the time it was
filed with the Commission pursuant to Rule 424(b) under the
Securities Act, complied as to form in all material respects with
the applicable requirements of the Securities Act, 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 Securities Exchange Act of 1934, as amended (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 1935 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 (other than the declaration of effectiveness of
the Registration Statement under the Securities Act or in
connection or compliance with the provisions of the securities or
blue sky laws of any jurisdiction) is legally required to permit
the valid issuance and sale by the Funding Corporation of the
Bonds to the Underwriters pursuant to the Underwriting Agreement
or the execution and delivery of the Trust Indenture by the
Company; and no further approval, authorization, consent or other
order of any governmental body is legally required to permit the
performance (other than that relating to the construction,
acquisition, ownership, operation and maintenance of the Grand
Gulf Nuclear Electric Generating Station) by the Company of its
obligations with respect to the Bonds or under the Trust
Indenture and the Underwriting Agreement.
(7) No legal or governmental proceedings to which the
Company is a party, or of which its property is the subject, that
are of a character required to be disclosed in the Registration
Statement or the Prospectus which are not disclosed and properly
described therein as required are pending or, to our knowledge,
threatened; and we do not know of any contracts or other
documents of the Company of a character required to be filed as
exhibits to the Registration Statement or the Prospectus which
are not so filed, or any contracts or other documents of the
Company of a character required to be disclosed in the
Registration Statement or the Prospectus which are not disclosed
and properly described therein as required; the descriptions in
the Registration Statement and Prospectus of statutes, legal and
government proceedings and contracts and other documents are
accurate and fairly present the information required to be shown.
(8) Except as disclosed in the Prospectus, there is no
action, suit, proceeding or investigation pending against or
affecting the Company or any of its assets the result of which
would, in our opinion, have a materially adverse effect on the
financial condition of the Company or on the issuance and sale of
the Bonds in accordance with the Underwriting Agreement.
(9) The statements made in the Prospectus under the
captions "Selected Information", "Selected Information Relating
to the Bonds", "Certain Terms of the Bonds", "Security and Source
of Payment for the Bonds", "Description of the Bonds and the
Indenture", "Description of the Lease Indentures", "Description
of the Leases" and "Other Agreements", insofar as such statements
purport to constitute summaries of the documents referred to
therein, constitute accurate summaries of the terms of such
documents in all material respects.
In passing upon the forms of the Registration Statement
and the Prospectus, we necessarily assume the correctness and
completeness 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 9
above. In connection with the preparation 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, with Deloitte & Touche, the independent
certified public accountants who audited certain of the financial
statements included or incorporated by reference in the
Registration Statement, and with your representatives. 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
its 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 filed with the
Commission pursuant to Rule 424(b) 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 or as to the statements of eligibility on Form T-1 and
T-2 filed as exhibits to the Registration Statement.
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. Accordingly, as to matters involving the laws of other
jurisdictions, we have relied upon the below-named opinions of
counsel to the extent that such opinions state an opinion with
regard to the matters covered by this opinion. As to matters of
Arkansas law relating to the Company, we have, with your consent,
relied upon an opinion of even date herewith addressed to us of
Messrs. Friday, Eldredge & Clark of Little Rock, Arkansas. As to
matters of Mississippi law related to the Company, we have, with
your consent, relied upon the opinion of even date herewith of
Wise Carter Child & Caraway, Professional Association, which has
been delivered to you pursuant to the Underwriting Agreement.
The opinion set forth above is solely for the benefit
of the addressees of this Letter and may not be relied upon in
any manner by any other person without our prior written consent,
except that Wise Carter Child & Caraway may rely on this opinion
as to matters of New York law in rendering its opinion referred
to above.
With respect to the opinion set forth in paragraph 2
above, we call your attention to the fact that the provisions of
the Atomic Energy Act of 1954, as amended, and regulations
promulgated thereunder impose certain licensing and other
requirements upon persons (such as the Trustee or other
purchasers pursuant to the remedial provisions of the Trust
Indenture) who seek to acquire, possess or use nuclear production
facilities.
We have not examined and are expressing no opinion as
to the title of the Company to its properties or the lien of the
Trust Indenture.
Very truly yours,
REID & PRIEST
<PAGE>
EXHIBIT C
[Letterhead of Friday, Eldredge & Clark]
REID & PRIEST
40 West 57th Street
New York, New York 10019
WISE CARTER CHILD & CARAWAY,
Professional Association
Heritage Building
P.O. Box 651
Jackson, Mississippi 39205
Ladies and Gentlemen:
We have acted as Arkansas counsel for System Energy
Resources, Inc. (the "Company") in connection with the sale to
the several Underwriters pursuant to and subject to the
conditions of the Underwriting Agreement, effective
(the "Underwriting Agreement"), among GG1B Funding Corporation
(the "Funding Corporation"), the Company and such Underwriters,
of $___________ in principal amount of the Funding Corporation's
Secured Lease Obligation Bonds _____% Series due ____ and
$___________ aggregate principal amount of its Secured Lease
Obligation Bonds _____% Series due ____ (the "Bonds"). The Bonds
are being issued pursuant to the Collateral Trust Indenture,
dated as of , as amended by Supplemental Indenture
No. 1, dated as of (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 delivered to you pursuant to Section 8(d) of the
Underwriting Agreement.
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 Amended and Restated Articles of
Incorporation and By-Laws, each as amended; (b) the Underwriting
Agreement; (c) the Trust Indenture; (d) the Registration
Statement and Prospectus (such terms having the same meaning
herein as in the Underwriting Agreement) filed under the
Securities Act of 1933, as amended (the "Act"); (e) the documents
incorporated by reference in the Registration Statement and
Prospectus; and (f) 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. 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 a specimen thereof, and we have relied
upon a certificate of the Trustee under the Trust Indenture as to
the authentication and delivery thereof.
Based upon the foregoing, and 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
Arkansas, and is duly qualified to conduct its business in such
state.
(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 and is a legal, valid and binding instrument of the
Company enforceable against the Company in accordance with its
terms, except as limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization and other laws affecting
creditors' rights or remedies for the enforcement of the security
interest provided by the Trust Indenture and general equitable
principles (regardless of whether such enforceability is
considered in a proceeding in equity or law).
(3) The Underwriting Agreement has been duly and
validly authorized, executed and delivered by the Company.
(4) The execution, delivery and performance by the
Company of the Trust Indenture and the Underwriting Agreement,
and the consummation of the transactions contemplated thereby (a)
will not violate or conflict with any provision of the Company's
Amended and Restated Articles of Incorporation or By-laws, each
as amended, and (b) will not violate or conflict with any
provision of any law or regulation of the State of Arkansas or
any subdivision thereof 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 of the State of Arkansas or any
subdivision thereof applicable to the Company.
(5) No approval, authorization, order, license,
permit, franchise or consent of or registration, declaration or
filing with any Arkansas governmental authority is required in
connection with the issuance and sale of the Bonds or the
execution, delivery and performance by the Company of the Trust
Indenture and the Underwriting Agreement.
(6) Except as disclosed in the Prospectus, there is no
action, suit, proceeding or investigation pending against or
affecting the Company or any of its assets the result of which
would, in our opinion, have a materially adverse effect on the
financial condition of the Company or on the issuance and sale of
the Bonds in accordance with the Underwriting Agreement.
Since we have acted herein only as Arkansas counsel for
the Company, the opinions set forth herein relate only to matters
governed by the laws of the State of Arkansas. You may rely upon
this opinion in rendering your respective opinions required to be
delivered under the Underwriting Agreement. The opinions set
forth above are solely for the benefit of the addressees of this
Letter and may not be relied upon in any manner by any other
person without our prior written consent, except that Winthrop,
Stimson, Putnam & Roberts may rely on these opinions as to all
matters of Arkansas law and the underwriters to whom your
respective opinions are addressed may rely upon these opinions as
though addressed and delivered to such underwriters.
Very truly yours,
FRIDAY, ELDREDGE & CLARK
<PAGE>
EXHIBIT D
[Letterhead of Reid & Priest, Counsel to
Funding Corporation]
MORGAN STANLEY & CO. INCORPORATED
BEAR, STEARNS & CO. INC.
GOLDMAN, SACHS & CO.
c/o MORGAN STANLEY & CO. INCORPORATED
1251 Avenue of the Americas
New York, New York 10020
Ladies and Gentlemen:
We have acted as special counsel to GG1B Funding
Corporation ("Funding Corporation"), in connection with the sale
to you, the several Underwriters, of $___________ aggregate
principal amount of Funding Corporation's Secured Lease
Obligation Bonds, _____% Series due ____ and $___________ of its
Secured Lease Obligation Bonds, _____% Series due ____ (the
"Bonds"), pursuant to and subject to the conditions set forth in
the Underwriting Agreement, effective (the
"Underwriting Agreement"), among Funding Corporation, System
Energy Resources, Inc. ("SERI") and you. The Bonds are being
issued pursuant to the Collateral Trust Indenture, dated as of
, as amended by Supplemental Indenture No. 1, dated as of
(the Collateral Trust Indenture, as so amended being hereinafter
referred to as the "Trust Indenture"), among Funding Corporation,
SERI and Bankers Trust Company, as Trustee (the "Trustee"). This
opinion is being delivered to you pursuant to Section 8(d) of the
Underwriting Agreement.
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, as amended; (b) the Underwriting
Agreement; (c) the Trust Indenture; (d) the Registration
Statement and Prospectus (such terms having the same meaning
herein as in the Underwriting Agreement) filed under the
Securities Act of 1933, as amended (the "Act"), and the Trust
Indenture Act of 1939, as amended (the "TIA"); (e) the documents
incorporated by reference in the Registration Statement and
Prospectus; (f) 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 the Company
of the Trust Indenture and the Underwriting Agreement; and (g)
the proceedings before the Securities and Exchange Commission
(the "Commission") under the Public Utility Holding Company Act
of 1935, as amended (the "1935 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 a
specimen thereof, and we have relied upon a certificate of the
Trustee as to the authentication and delivery thereof.
Based upon the foregoing, and 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 incorporated and
validly existing as a corporation in good standing under the laws
of the State of Delaware and has all corporate and other 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 and is a legal, valid and
binding instrument of Funding Corporation, enforceable against
Funding Corporation in accordance with its terms, except as
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization and other laws affecting creditors' rights or
remedies for the enforcement of the security interest provided by
the Trust Indenture 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 and other laws
affecting creditors' rights or remedies for the enforcement of
the security interest provided by the Trust Indenture and general
equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law), are entitled
to the benefits and security afforded by the Trust Indenture in
accordance with the terms of the Trust Indenture and the Bonds,
and conform to the description thereof in the Prospectus.
(5) The Registration Statement has become, and on the
date hereof is, effective under the 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) The Commission has issued an order under the 1935
Act authorizing the issuance and sale of the Bonds, and no other
consent, approval, authorization or other order of any regulatory
body is legally required for the valid issuance and sale of the
Bonds pursuant to the Underwriting Agreement other than the
declaration of effectiveness of the Registration Statement under
the Securities Act or such registration or qualification as may
be required under state securities or Blue Sky laws.
(7) It is not necessary for Funding Corporation to
register as an investment company pursuant to the Investment
Company Act of 1940 in order to participate in the transactions
contemplated by the Prospectus.
(8) No legal or governmental proceedings to which
Funding Corporation is a party, or of which its property is the
subject, that are of a character required to be disclosed in the
Registration Statement or the Prospectus are pending or, to our
knowledge, threatened; and we do not know of any contracts or
other documents of Funding Corporation of a character required to
be filed as exhibits to the Registration Statement which are not
so filed, or any contracts or other documents of Funding
Corporation of a character required to be disclosed in the
Registration Statement or the Prospectus which are not disclosed
and properly described therein as required; the descriptions in
the Registration Statement and Prospectus of statutes, legal and
government proceedings and contracts and other documents fairly
present the information required to be shown.
(9) The Underwriting Agreement has been duly and
validly authorized, executed and delivered by Funding
Corporation.
(10) Except as disclosed in the Prospectus, there is no
action, suit, proceeding or investigation pending against or
affecting Funding Corporation or any of its assets the result of
which would, in our opinion, have a materially adverse effect on
the financial condition of Funding Corporation or on the issuance
and sale of the Bonds in accordance with the Underwriting
Agreement.
(11) Neither the execution and delivery by Funding
Corporation of the Underwriting Agreement, the Bonds or the Trust
Indenture nor the consummation of the transactions therein
contemplated will conflict with, or result in a breach of, any of
the terms, conditions or provisions of the Certificate of
Incorporation or By-Laws of Funding Corporation or of any law or
decree, or any regulation, order, writ, injunction, determination
or award known to us of any court or arbitrator or of any
governmental department, body, commission, board, bureau, agency
or instrumentality or any agreement or instrument known to us to
which Funding Corporation is a party or otherwise subject or by
which it or any of its property is affected or by which it is
bound, or constitute a default thereunder or result in the
creation or imposition of any lien, charge, encumbrance on or
security interest in (other than 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 after due inquiry with respect
thereto to which Funding Corporation is a party or which purports
to be binding upon Funding Corporation or upon any of its assets.
(12) The statements contained in the Prospectus under
the captions "Selected Information", "Selected Information
Relating to the Bonds", "Certain Terms of the Bonds", "Security
and Source of Payment for the Bonds", "GG1B Funding Corporation",
"Description of the Bonds and the Indenture", "Description of the
Lease Indentures", "Description of the Leases" and "Other
Agreements", insofar as such statements purport to constitute
summaries of documents referred to therein, constitute accurate
summaries of the terms of such documents in all material
respects.
With respect to the opinions set forth in paragraphs 2
and 4 above, we call your attention to the fact that the
provisions of the Atomic Energy Act of 1954, as amended, and
regulations promulgated thereunder impose certain licensing and
other requirements upon persons (such as the Trustee or other
purchasers pursuant to the remedial provisions of the Trust
Indenture) who seek to acquire, possess or use nuclear production
facilities.
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 and may not be relied upon in
any manner by any other person without our prior written consent,
except that the Trustee, Funding Corporation and SERI are
entitled to rely on this opinion as if addressed to them.
Very truly yours,
<PAGE>
EXHIBIT E
[Letterhead of Winthrop, Stimson, Putnam & Roberts]
MORGAN STANLEY & CO. INCORPORATED
BEAR, STEARNS & CO. INC.
GOLDMAN, SACHS & CO.
c/o MORGAN STANLEY & CO. INCORPORATED
1251 Avenue of the Americas
New York, New York 10020
Ladies and Gentlemen:
We have acted as counsel for you as the underwriters
(the "Underwriters"), pursuant to the Underwriting Agreement
effective (the "Underwriting Agreement") among
the Underwriters, GG1B Funding Corporation (the "Funding
Corporation") and System Energy Resources, Inc. (the "Company"),
providing for the several purchases and reoffering by the
Underwriters of $___________ aggregate principal amount of the
Funding Corporation's Secured Lease Obligation Bonds _____%
Series due ____ and $___________ aggregate principal amount of
its Secured Lease Obligation Bonds _____% Series due ____
(collectively, the "Bonds"). Capitalized terms used herein and
not otherwise defined shall have the meanings ascribed to them in
the Underwriting Agreement.
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. In
such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as
originals, the conformity to the originals of the documents
submitted to us as certified or photostatic copies, and the
correctness of all statements of fact contained in all such
original or copied documents. We have not examined the Bonds
except specimens thereof, and we have relied upon a certificate
of the Trustee as to the due authentication and delivery thereof.
We have not examined into, and are expressing no opinion or
belief as to matters relating to, titles to property, franchises,
licenses and permits or the lien of the Trust Indenture.
Based upon the foregoing, it is our 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 valid and binding instrument of the Company
enforceable against the Company in accordance with its terms,
except as limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization and other laws affecting creditors'
rights or remedies for the enforcement of the security interest
provided by the Trust Indenture and general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law), and is duly qualified under the
Trust Indenture Act of 1939, as amended (the "TIA"), and no
proceedings to suspend such qualification have been instituted
or, to our knowledge, threatened by the Securities and Exchange
Commission (the "Commission").
(2) The Bonds have been duly and validly authorized by
all necessary corporate action, and 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 and other laws affecting
creditors' rights or remedies for the enforcement of the security
interest provided by the Trust Indenture 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 under the
captions "Selected Information", "Selected Information Relating
to the Bonds", "Certain Terms of the Bonds", "Security and Source
of Payment for the Bonds", "Description of the Bonds and the
Indenture", "Description of the Lease Indentures", "Description
of the Leases" and "Other Agreements", insofar as such statements
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 and
validly authorized, executed and delivered by the Funding
Corporation and the Company.
(5) An appropriate order has been entered by the
Commission under the Public Utility Holding Company Act of 1935,
as amended, granting the application, as amended, with respect to
the Bonds and, to the best of our knowledge, such order is in
full force and effect.
(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 (except with respect to the part of the Registration
Statement that constitutes the statements of eligibility on Forms
T-1 and T-2, respectively, of the Trustee and Stanley Burg, upon
which we do not pass), at the date of its effectiveness, and the
Prospectus, at the time it was first filed with the Commission
pursuant to Rule 424 under the Securities Act of 1933, as amended
(the "Securities Act"), complied as to form in all material
respects with the applicable requirements of the Securities Act,
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 Securities Exchange Act of 1934, as
amended (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.
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 and
representatives of and counsel for the Funding Corporation and
the Company and its affiliates, with Deloitte & Touche, the
independent certified public accountants who audited certain of
the financial statements included or incorporated by reference in
the Registration Statement, and with your representatives. 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, at its effective date, the
Registration Statement 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
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 or as to the statements of eligibility on Form T-1 and
T-2 filed as exhibits to the Registration Statement.
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 opinions of even date herewith addressed to
you of (i) Friday, Eldredge & Clark and (ii) Wise Carter Child
& Caraway, Professional Association, as to all matters of
Arkansas and Mississippi law, respectively, related to this
opinion.
With respect to the opinions set forth in paragraphs 1
and 2 above, we call your attention to the fact that the
provisions of the Atomic Energy Act of 1954, as amended, and
regulations promulgated thereunder impose certain licensing and
other requirements upon persons (such as the Trustee or other
purchasers pursuant to the remedial provisions of the Trust
Indenture) who seek to acquire, possess or use nuclear production
facilities.
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,
<PAGE>
EXHIBIT F
ITEMS PURSUANT TO SECTION 8(f)(iv) OF THE
UNDERWRITING AGREEMENT FOR INCLUSION IN
LETTER OF DELOITTE & TOUCHE REFERRED
TO THEREIN
CAPTION ITEMS
REGISTRATION STATEMENT
ON FORM S-3 (NO. 33-51175)
RATIOS OF EARNINGS TO FIXED The unaudited ratios of
CHARGES earnings to fixed charges of
the Company for each of the
five years in the period ended
December 31, 1992 and the
twelve-month period ended
September 30, 1993, the
coverage deficiency in footnote
(b) and compliance with the
requirements of Item 503(d) of
Regulation S-K. P. 32
FORM 10-Q FOR THE
QUARTERLY PERIOD ENDED
SEPTEMBER 30, 1993
COMMITMENTS AND The total equity capital
CONTINGENCIES percentage of adjusted
capitalization and the fixed
charge coverage ratio of the
Company at September 30, 1993
for purposes of the
Reimbursement Agreement. P. 41
Exhibit B-10(a)
REFUNDING AGREEMENT NO. 1-A
dated as of January 1, 1994
among
RESOURCES CAPITAL MANAGEMENT CORPORATION,
as Owner Participant and Approved Transferee of
Public Service Resources Corporation
the Original Owner Participant
GG1B Funding Corporation,
as Funding Corporation
MERIDIAN TRUST COMPANY,
as Corporate Owner Trustee under Trust Agreement No. 1, dated as
of
December 1, 1988, with the Individual Owner Trustee and the Owner
Participant, as successor in interest to the Original Owner
Participant,
STEPHEN J. KABA,
as successor Individual Owner Trustee under Trust Agreement No.
1, dated as of December 1, 1988, with the Corporate Owner
Trustee and the Owner Participant, as successor in interest to
the
Original Owner Participant,
BANKERS TRUST COMPANY,
as Corporate Indenture Trustee under Trust Indenture, Deed of
Trust,
Mortgage, Security Agreement and Assignment of Facility Lease No.
1,
dated as of December l, 1988, as supplemented, with the
Individual Indenture
Trustee and the Owner Trustee,
STANLEY BURG,
as Individual Indenture Trustee under Trust Indenture, Deed of
Trust, Mortgage, Security Agreement and Assignment of Facility
Lease
No. 1, dated as of December 1, 1988, as supplemented, with the
Corporate Indenture Trustee and the Owner Trustee,
and
SYSTEM ENERGY RESOURCES, INC.,
as Lessee
<PAGE>
REFUNDING AGREEMENT NO. 1-A, dated as of January 1,
1994, ("Refunding Agreement") among RESOURCES CAPITAL MANAGEMENT
CORPORATION, a New Jersey corporation (the "Owner Participant")
as Approved Transferee (such term, and other capitalized terms
used herein without definition, being defined as provided in
Section 1) of Public Service Resources Corporation, the Original
Owner Participant, GG1A FUNDING CORPORATION, a Delaware
corporation (the "Original Funding Corporation"), GG1B FUNDING
CORPORATION, a Delaware corporation (the "Funding Corporation"),
MERIDIAN TRUST COMPANY, a Pennsylvania trust company, not in its
individual capacity, but solely as Corporate Owner Trustee under
the Trust Agreement, STEPHEN J. KABA, not in his individual
capacity, but solely as successor Individual Owner Trustee under
the Trust Agreement, BANKERS TRUST COMPANY, a New York banking
corporation, not in its individual capacity but solely as
Corporate Indenture Trustee under the Indenture, STANLEY BURG,
not in his individual capacity but solely as Individual Indenture
Trustee under the Indenture, and SYSTEM ENERGY RESOURCES, INC.,
an Arkansas corporation (the "Lessee"),
W I T N E S S E T H:
WHEREAS, the parties to this Refunding Agreement other
than the Funding Corporation are parties to Participation
Agreement No. 1, dated as of December 1, 1988 (the "Participation
Agreement"), among the Lessee, the Original Funding Corporation,
the Owner Participant, as successor in interest to the Original
Owner Participant, the Corporate Owner Trustee, the Individual
Owner Trustee, the Corporate Indenture Trustee, the Individual
Indenture Trustee and the Original Loan Participants named
therein; and
WHEREAS, the Initial Series Notes were issued by the
Owner Trustee in connection with the acquisition of the Undivided
Interest; and
WHEREAS, on April 13, 1989 the Original Funding
Corporation utilized the proceeds of a series of Bonds issued by
it to make a Refunding Loan to the Owner Trustee and the Owner
Trustee issued Fixed Rate Notes to refund the Initial Series
Notes; and
WHEREAS, Section 2(d) of the Participation Agreement
provides for a refunding of the Notes theretofore issued and then
Outstanding upon the satisfaction of the conditions set forth in
Sections 2 and 11(c) of the Participation Agreement; 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 of the Owner
Participant in the event of the issuance of Fixed Rate Notes; and
WHEREAS, on December 14, 1993, at the direction of the
Lessee and the Owner Participant, the Owner Trustee gave the
Indenture Trustee notice of prepayment, which notice provided, in
accordance with Section 3.9(c) of the Indenture, that such
prepayment is conditional upon the receipt by the Indenture
Trustee on or prior to the Refunding Date, of moneys sufficient
to pay the principal of, and the premium, if any, and interest on
the Outstanding Notes and that if such moneys shall not have been
so received, said notice shall be of no force and effect and the
Owner Trustee shall not be required to prepay the Outstanding
Notes, on January 18, 1994 of the Outstanding Notes and the
Original Funding Corporation gives notice to the Collateral Trust
Trustee of the redemption on January 18, 1994 of the Bonds
Outstanding, which notice was correspondingly conditional; and
WHEREAS, the parties hereto wish to cause the issuance
of a new series of Fixed Rate Notes (the "Refunding Notes") in
order to refund the Outstanding Notes and redeem the outstanding
Bonds; and
WHEREAS, the Lessee has filed with the Securities and
Exchange Commission a Registration Statement on Form S-3 (Reg.
No. 33-51175) relating to the New Bonds, which Registration
Statement became effective on December 28, 1993; and
WHEREAS, Section 10.1(viii) of the Indenture provides,
among other things, that the Owner Trustee and Indenture Trustee
may, without consent of the Holders of Notes Outstanding, execute
a supplement to the Indenture in order to evidence the issuance
of and to provide the terms of Additional Notes; and
WHEREAS, subject to the conditions set forth herein,
the Owner Trustee and the Indenture Trustee intend to execute
Supplemental Indenture No. 2 to the Indenture, dated as of
January 1, 1994 ("Supplemental Indenture No. 2"), providing for
the issuance under the Indenture of Refunding Notes as
contemplated in Supplemental Indenture No. 2; and
WHEREAS, Section 10.2(ii) of the Indenture provides,
among other things, that, upon receipt of a written instruction
from the Lessee and the Owner Trustee, the Indenture Trustee
shall consent to certain amendments of the Facility Lease; and
WHEREAS, subject to the conditions set forth herein,
the Owner Trustee and the Lessee intend to execute Lease
Supplement No. 2 to the Facility Lease, dated as of January 1,
1994 ("Lease Supplement No. 2"), to amend certain schedules
thereto;
WHEREAS, subject to the conditions set forth herein,
the Owner Participant and the Lessee intend to execute Amendment
No. 1 dated as of January 1, 1994 to the Tax Indemnification
Agreement No. 1 ("TIA Amendment No. 1"), to amend certain
provisions of the Tax Indemnification Agreement;
WHEREAS, Basic Rent and the Value Schedules, as set
forth in Lease Supplement No. 2, have been adjusted to take into
effect, among other things, the additional Tax Assumptions set
forth on TIA Amendment No. 1 and the additional Pricing
Assumptions set forth on 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:
SECTION 1. Definitions.
For purposes hereof, capitalized terms used herein and
not otherwise defined herein shall have the respective meanings
assigned to such terms as set forth in Appendix A to the
Participation Agreement.
SECTION 2. Agreement of Funding Corporation.
(a) Subject to the terms and conditions hereof and of
Section 2 and 11(c) of the Participation Agreement, on the
Refunding Date, Funding Corporation shall make a Refunding Loan
to the Owner Trustee by paying to the Indenture Trustee for the
account of the Owner Trustee immediately available funds in an
amount equal to $348,009,000. 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 3(c)(ii).
(b) On and as of the Refunding Date, Original Funding
Corporation hereby assigns to Funding Corporation and Funding
Corporation hereby assumes all rights and obligations of Original
Funding Corporation under the Participation Agreement and
thereupon the Original Funding Corporation shall be released and
discharged from any further obligations under the Participation
Agreement. Notwithstanding the foregoing, Original Funding
Corporation shall continue to have the rights and obligations of
an Indemnitee under Section 13 of the Participation Agreement. On
and as of the Refunding Date (and for purposes of the definitions
contained in this Agreement on and as of the date of the
execution and delivery hereof), Appendix A to the Participation
Agreement shall be amended such that Funding Corporation, as
defined therein, shall mean GG1B Funding Corporation, a Delaware
corporation (it being understood that the reference to "Funding
Corporation" in Section 11(c) of the Participation Agreement
refers to GG1B Funding Corporation in the context of the
Refunding Loan contemplated hereby).
SECTION 3. Issuance of Refunding Notes by
Owner Trustee; Application of
Proceeds.
Subject to the terms and conditions hereof and of
Sections 2 and 11(c) of the Participation Agreement and Section
3.5 of the Indenture, on the Refunding Date, (a)(i) the Lessee
and the Lessor shall enter into Lease Supplement No. 2, (ii) the
Owner Trustee and the Indenture Trustee shall enter into
Supplemental Indenture No. 2, and (iii) the Lessee, the 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 to the
Collateral Trust Indenture ("Collateral Trust Supplement") and
(iv) the Lessee and the Owner Participant will enter into the TIA
Amendment No. 1, (b) the Lessee shall make a Supplemental Rent
payment pursuant to Section 3(b)(ii) of the Facility Lease in the
amount of $25,935,493.05, (c) upon receipt of the Refunding Loan
to be made by Funding Corporation in accordance with Section 2
hereof and such Supplemental Rent payment, the Indenture Trustee,
at the direction of the Owner Trustee, shall (i) authenticate and
deliver the Refunding Notes, in the aggregate principal amount of
the Refunding Loan and bearing interest at the rates per annum
and in the amounts, respectively, set forth in Supplemental
Indenture No. 2 and (ii) apply the proceeds of the Refunding Loan
to the prepayment in full of the principal of the Outstanding
Notes (it being understood that any accrued interest on the
Outstanding Notes shall be paid from the Rent payable by the
Lessee under the Facility Lease on the Refunding Date and that
the premium payable upon the prepayment of the Outstanding Notes
shall be paid from the Supplemental Rent payable by the Lessee in
accordance with clause (b) hereof under Section 3(b)(ii) of the
Facility Lease on the Refunding Date) and (d) Schedule 5 to the
Participation Agreement shall be amended to include the
additional Pricing Assumptions set forth on Schedule 2 hereof.
SECTION 4. Implementation.
(a) Forms. The forms of Supplemental Indenture No. 2,
Lease Supplement No. 2, the Collateral Trust Indenture and the
Collateral Trust Supplement and the TIA Amendment No. 1 are
attached hereto as Exhibits A, B, C, D and E 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(d) and 11(c) of the Participation
Agreement and Section 3.5 of the Indenture, and subject to the
Owner Trustee having received the Rent payments described in
Section 3, the Owner Participant hereby agrees that, on the
Refunding Date, it will execute and deliver TIA Amendment No. 1
and direct (i) the Owner Trustee to execute and deliver
Supplemental Indenture No. 2 and Lease Supplement No. 2
(collectively, with this Refunding Agreement and TIA Amendment
No. 1, the "Refunding Documents") in the forms of Exhibits A and
B hereto, respectively, (ii) the Corporate Owner Trustee to
execute Refunding Notes as contemplated by the Refunding
Documents and to request the Indenture Trustee (x) to
authenticate and deliver the Refunding Notes pursuant to Section
3.5 of the Indenture and (y) in view of the fact that Funding
Corporation is to pledge such Refunding Notes to the Collateral
Trust Trustee, to cause such Refunding Notes to be delivered
directly to, and registered in the name of, the Collateral Trust
Trustee and (iii) the Corporate Owner Trustee to execute and
deliver all other agreements, instruments and certificates
contemplated by the Transaction Documents, the Financing
Documents and the Refunding Documents.
(c) Instruction and Consent. Subject to satisfaction
of the terms and conditions of Section 2(d) and 11(c) of the
Participation Agreement and Section 3.5 of the Indenture, (x) in
accordance with Section 10.2(ii) of the Indenture, the Lessee and
the Owner Trustee hereby instruct the Indenture Trustee to
consent, effective as of the Refunding Date, to Lease Amendment
No. 2 and the Indenture Trustee hereby so consents and (y) in
accordance with Section 10.1(viii) of the Indenture, the Owner
Trustee and the Indenture Trustee hereby consent and agree to
execute and deliver Supplemental Indenture No. 2 on the Refunding
Date.
(d) Consent of Lessee. In accordance with Section
8(b)(2) of the Participation Agreement, the Lessee hereby
consents to the refunding of the Outstanding Notes as
contemplated hereby.
(e) Recordations and Filings. The Lessee agrees that
it will cause to be made the recordations and filings set forth
in Schedule 1 hereto and represents that such filings and
recordations are all the recordations and filings that are
necessary in order 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. 2, and the first and prior
security interest of the Indenture Trustee in the Lease Indenture
Estate under the Indenture, as amended by Supplemental Indenture
No. 2.
(f) Funding Corporation Consent. Pursuant to the
Collateral Trust Indenture, Funding Corporation shall assign to
the Collateral Trust Trustee all of Funding Corporation's right,
title and interest in and to the Refunding Notes, as security for
Funding Corporation's obligations under the Collateral Trust
Indenture and, therefore, Funding Corporation hereby consents to
the Owner Trustee's issuance of the Refunding Notes directly to
the Collateral Trust Trustee.
SECTION 5. Conditions Precedent.
(a) Conditions Precedent to Obligations of Funding
Corporation. The obligations of Funding Corporation and the
Lessee to take the actions specified in Sections 2 and 3 hereof
on the Refunding Date shall be subject to the following
conditions precedent:
(i) the Underwriting Agreement dated January 11,
1994 (the "Underwriting Agreement") among Funding
Corporation, the Lessee, Morgan Stanley & Co.
Incorporated, Bear, Stearns & Co. Inc. and Goldman,
Sachs & Co. (collectively, the "Underwriters") relating
to the offer and sale to the public of $435,102,000
aggregate principal amount of Secured Lease Obligation
Bonds of Funding Corporation (the "Bonds") shall have
been executed and delivered;
(ii) the Underwriters shall have purchased the
Bonds pursuant to the Underwriting Agreement; and
(iii) the conditions set forth in Sections 2 and
11(c) of the Participation Agreement and in the
Underwriting Agreement shall have been satisfied.
(b) Conditions Precedent to Obligations of the Owner
Trustee. The obligations of the Owner Trustee to issue and
deliver the Refunding Notes to the Collateral Trust Trustee, as
assignee of Funding Corporation on the Refunding Date in
consideration of the Refunding Loan shall be subject to (x) the
simultaneous performance by Funding Corporation of its
obligations under Sections 2 and 3 hereof and the payment by the
Lessee of Basic Rent, the prepayment of Basic Rent, and
Supplemental Rent referred to in Section 3 hereof, (y) the
satisfaction of the conditions set forth in Sections 2 and 11(c)
of the Participation Agreement and Section 3.5 of the Indenture
to the participation by the Owner Trustee in the transactions
contemplated by this Refunding Agreement and (z) receipt of a
direction from the Owner Participant to the effect set forth in
Section 4(b) hereof.
(c) Conditions Precedent to Obligations of the
Indenture Trustee. The obligations of the Indenture Trustee to
take the action required by Section 3 hereof on the Refunding
Date shall be subject to the satisfaction of the conditions set
forth in Section 3.5 of the Indenture.
SECTION 6. Expenses.
The Lessee hereby affirms that it shall pay, as
Supplemental Rent pursuant to Section 14(b)(ii)(g) of the
Participation Agreement, 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 the refunding contemplated hereby; provided,
however, that:
(i) Lessee shall pay a fixed sum of $125,000 to
legal counsel of the Owner Participant and a
fee of $160,000 to the Owner Participant in
connection with the refinancing;
(ii) Lessee shall pay a financial advisory fee of
$120,000 to Cornerstone Financial Advisors,
the financial advisor of the Owner
Participant;
(iii) Lessee shall pay on an After Tax Basis the
financial advisory fee and the fee of Owner
Participant's legal counsel, the amortization
of which shall be reflected in Basic Rent and
Casualty Values. Notwithstanding anything to
the contrary in any of the Transaction
Documents, Lessee shall not pay on an After
Tax Basis (or otherwise indemnify the Owner
Participant for) the $160,000 fee to the
Owner Participant;
(iv) In the event that the legal expenses of the
Owner Participant's legal counsel or the
financial advisory fee shall exceed the
amounts set forth above, any such excess
amounts, together with any other fees,
expenses or disbursements of Owner
Participant shall be for the account of the
Owner Participant, shall not be reimbursable
by the Lessee, and shall be disregarded for
the purposes of the Tax Indemnification
Agreement;
(v) Lessee shall not be required to reimburse the
Owner Participant for any other fees,
expenses, disbursements or costs, whether
payable under Section 14(b)(g)(ii) of the
Participation Agreement or otherwise payable
in connection with the refunding contemplated
herein.
SECTION 7. Miscellaneous.
(a) Execution. This Refunding Agreement may be
executed in any number of counterparts and by different parties
hereto on 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.
(b) Governing Law. This Refunding Agreement 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.
(c) Notices to Owner Participant. In accordance with
Section 18 of the Participation Agreement, the Owner Participant
does hereby designate that all communications, notices and
consents to the Owner Participant provided for in the
Participation Agreement shall be addressed as follows unless and
until the Owner Participant shall hereafter designate another
address in accordance with such Section 18:
Resources Capital Management Corporation
One Riverfront Plaza
9th Floor
Newark, New Jersey 07102
Telephone: (201) 430-6499
Telecopy: (201) 430-5328
All payments required to be made to the "Owner
Participant" under any Transaction Document shall be made to the
following account unless and until the Owner Participant shall
hereafter designate another account for such purpose: The Chase
Manhattan Bank, N.A., A/C #910-2-546562, ABA #021000021
(Resources Capital Management Corporation (notify Eileen A.
Moran)).
(d) Concerning the Owner Trustee. MTC and Stephen J.
Kaba are entering into this Refunding Agreement solely as Owner
Trustee under the Trust Agreement and not in their individual
capacities. Anything herein to the contrary notwithstanding, all
and each of the agreements herein made on the part of the Owner
Trustee are made and intended not as personal agreements of MTC
and Stephen J. Kaba but are made and intended for the purpose of
binding only the Trust Estate.
(e) Concerning the Indenture Trustee. BTC and Stanley
Burg are entering into this Refunding Agreement solely as
Corporate Indenture Trustee and Individual Indenture Trustee,
respectively, under the Indenture and not in their individual
capacities. Anything herein to the contrary notwithstanding, all
and each of the respective agreements herein made on the part of
the Corporate Indenture Trustee and Individual Indenture Trustee,
respectively, are made and intended not as personal agreements
for BTC and Stanley Burg, as the case may be, but are made and
intended solely as the agreements of the Corporate Indenture
Trustee and the Individual Indenture Trustee pursuant to the
Indenture, in the exercise of the powers and authority conferred
and vested in the Corporate Indenture Trustee and Individual
Indenture Trustee, respectively,pursuant to the Indenture.
(f) Owner Trustee's, Owner Participant's and Indenture
Trustee's Obligations. The obligations and duties of the Owner
Trustee, the Owner Participant and the Indenture Trustee under
this Agreement are limited to those expressly set forth herein as
obligations of the Owner Trustee, the Owner Participant and the
Indenture Trustee, respectively. Without limiting the generality
of the foregoing, neither the Owner Trustee nor the Owner
Participant shall have any obligations or duties with respect to
the redemption of the bonds issued by Original Funding
Corporation or the issuance of the Bonds.
IN WITNESS WHEREOF, the parties hereto have caused this
Refunding Agreement to be duly executed by their respective
officers thereunto duly authorized.
<PAGE>
RESOURCES CAPITAL MANAGEMENT CORPORATION
as Owner Participant
By _____________________________
Name:
Title:
<PAGE>
GG1B FUNDING CORPORATION
By _____________________________
Name:
Title:
<PAGE>
MERIDIAN TRUST COMPANY, not in its
individual capacity, but solely as
Corporate Owner Trustee under the
Trust Agreement
By _____________________________
Name:
Title:
By _____________________________
STEPHEN J. KABA, not in his
individual capacity, but
solely as Individual Owner
Trustee under the Trust
Agreement
<PAGE>
BANKERS TRUST COMPANY, not in its
individual capacity but solely as
Corporate Indenture Trustee
By _____________________________
Name:
Title: Vice President
__________________________________
STANLEY BURG, not in his individual
capacity but solely as Individual
Indenture Trustee
<PAGE>
SYSTEM ENERGY RESOURCES, INC., as
Lessee
By ______________________________
Name:
Title:
<PAGE>
SCHEDULE 1
Recordations and Filings
Part I. Land Record Filings.
A. Chancery Clerk, Claiborne County, Mississippi
1. Lease Supplement No. 2 to the Facility Lease.
2. Supplemental Indenture No. 2 to the Indenture.
3. Collateral Trust Indenture.
4. Supplemental Indenture No. 1 to the Collateral
Trust Indenture.
Part II. Uniform Commercial Code Filings.
A. Chancery Clerk, Claiborne County, Mississippi:
1. UCC-3 to amend the UCC-l filed with respect to the
Facility Lease naming SERI as Lessee and the Owner
Trustee as Lessor, attaching thereto Lease
Supplement No. 2 to the Facility Lease.
2. UCC-3 to amend the UCC-l filed with respect to the
Indenture, naming the Owner Trustee as debtor and
the Indenture Trustee as secured party in respect
of the Lease Indenture Estate, attaching thereto
Supplemental Indenture No. 2 to the Indenture.
3. UCC-l with respect to the Collateral Trust
Indenture, as amended by Supplemental Indenture
No. 2 thereto, naming GG1B Funding Corporation as
debtor and Bankers Trust Company, Trustee, as
secured party.
B. Chancery Clerk, Hinds County, Mississippi:
1. UCC-3 to amend the UCC-1 filed with respect to the
Facility Lease naming SERI as Lessee and the Owner
Trustee as Lessor, attaching thereto Lease
Supplement No. 2 to the Facility Lease.
2. UCC-3 to amend the UCC-l filed with respect to the
Indenture, naming the Owner Trustee as debtor and
the Indenture Trustee as secured party in respect
of the Lease Indenture Estate, attaching thereto
Supplemental Indenture No. 2 to the Indenture.
3. UCC-l with respect to the Collateral Trust
Indenture, as amended by Supplemental Indenture
No. 1 thereto, naming GG1B Funding Corporation as
debtor and Bankers Trust Company, Trustee, as
secured party.
C. Mississippi Secretary of State.
1. UCC-3 to amend the UCC-l filed with respect to the
Facility Lease naming SERI as Lessee and the Owner
Trustee as Lessor, attaching thereto Lease
Supplement No. 2 to the Facility Lease.
2. UCC-3 to amend the UCC-l filed with respect to the
Indenture, naming the Owner Trustee as debtor and
the Indenture Trustee as secured party in respect
of the Lease Indenture Estate, attaching thereto
Supplemental Indenture No. 2 to the Indenture.
3. UCC-1 with respect to the Collateral Trust
Indenture, as amended by Supplemental Indenture
No. 1 thereto, naming GG1B Funding Corporation as
debtor and Bankers Trust Company, Trustee, as
secured party.
D. Secretary of State of Delaware.
UCC-1 with respect to the Collateral Trust
Indenture, as amended by Supplemental Indenture
No. 1 thereto, naming GG1B Funding Corporation as
debtor and Bankers Trust Company, Trustee, as
secured party.
E. Secretary of State of New York.
UCC-1 with respect to the Collateral Trust
Indenture, as amended by Supplemental Indenture
No. 1 thereto, naming GG1B Funding Corporation as
debtor and Bankers Trust Company, Trustee, as
secured party.
<PAGE>
Schedule 2
Additional Pricing Assumptions
Basic Rent, Casualty Values and Special Casualty
Values, as set forth in the Facility Lease, as amended by
Supplement No. 2, dated as of January 1, 1994, 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: January 18, 1994
2. Interest Rate on and Amortization of Notes:
See Supplemental Indenture No. 2, dated
as of January 1, 1994.
3. Refunding Expenses:
a) $3,006,038.39 paid by the Lessee on the Refunding Date
on an After-Tax Basis (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).
b) $25,935,493.05 paid by the Lessee on the Refunding Date
in respect of the premium on the Notes
redeemed on the Refunding Date.
c) $160,000 fee paid to Owner Participant on the
Refunding Date not to be taken into account
for pricing assumptions.
4. Additional Basic Rent: $328,776.91 as interest from
January 15, 1994 to the Refunding
Date on Notes which are redeemed on
the Refunding Date.
5. Owner Participant's
Marginal Federal Tax Rate: 35% (subject to proviso
contained in Section 3(d) of
the Lease).
Exhibit B-11(a)
REFUNDING AGREEMENT NO. 2-A
dated as of January 1, 1994
among
TEXTRON FINANCIAL CORPORATION,
as Owner Participant and Approved Transferee of
Lease Management Realty Corporation IV,
the Original Owner Participant
GG1B Funding Corporation,
as Funding Corporation
MERIDIAN TRUST COMPANY,
as Corporate Owner Trustee under Trust Agreement No. 2, dated as
of
December 1, 1988, with the Individual Owner Trustee and the Owner
Participant, as successor in interest to the Original Owner
Participant,
STEPHEN J. KABA,
as successor Individual Owner Trustee under Trust Agreement No.
2, dated as of December 1, 1988, with the Corporate Owner
Trustee and the Owner Participant, as successor in interest to
the
Original Owner Participant,
BANKERS TRUST COMPANY,
as Corporate Indenture Trustee under Trust Indenture, Deed of
Trust,
Mortgage, Security Agreement and Assignment of Facility Lease No.
2,
dated as of December l, 1988, as supplemented, with the
Individual Indenture
Trustee and the Owner Trustee,
STANLEY BURG,
as Individual Indenture Trustee under Trust Indenture, Deed of
Trust, Mortgage, Security Agreement and Assignment of Facility
Lease
No. 2, dated as of December 1, 1988, as supplemented, with the
Corporate Indenture Trustee and the Owner Trustee,
and
SYSTEM ENERGY RESOURCES, INC.,
as Lessee
<PAGE>
REFUNDING AGREEMENT NO. 2-A, dated as of January 1,
1994, ("Refunding Agreement") among TEXTRON FINANCIAL
CORPORATION, a Delaware corporation (the "Owner Participant") as
Approved Transferee (such term, and other capitalized terms used
herein without definition, being defined as provided in Section
1) of Lease Management Realty Corporation IV, the Original Owner
Participant, GG1A FUNDING CORPORATION, a Delaware corporation
(the "Original Funding Corporation"), GG1B FUNDING CORPORATION, a
Delaware corporation (the "Funding Corporation"), MERIDIAN TRUST
COMPANY, a Pennsylvania trust company, not in its individual
capacity, but solely as Corporate Owner Trustee under the Trust
Agreement, STEPHEN J. KABA, not in his individual capacity, but
solely as successor Individual Owner Trustee under the Trust
Agreement, BANKERS TRUST COMPANY, a New York banking corporation,
not in its individual capacity but solely as Corporate Indenture
Trustee under the Indenture, STANLEY BURG, not in his individual
capacity but solely as Individual Indenture Trustee under the
Indenture, and SYSTEM ENERGY RESOURCES, INC., an Arkansas
corporation (the "Lessee"),
W I T N E S S E T H:
WHEREAS, the parties to this Refunding Agreement other
than the Funding Corporation are parties to Participation
Agreement No. 2, dated as of December 1, 1988 (the "Participation
Agreement"), among the Lessee, the Original Funding Corporation,
the Owner Participant, as successor in interest to the Original
Owner Participant, the Corporate Owner Trustee, the Individual
Owner Trustee, the Corporate Indenture Trustee, the Individual
Indenture Trustee and the Original Loan Participants named
therein; and
WHEREAS, the Initial Series Notes were issued by the
Owner Trustee in connection with the acquisition of the Undivided
Interest; and
WHEREAS, on April 13, 1989 the Original Funding
Corporation utilized the proceeds of a series of Bonds issued by
it to make a Refunding Loan to the Owner Trustee and the Owner
Trustee issued Fixed Rate Notes to refund the Initial Series
Notes; and
WHEREAS, Section 2(d) of the Participation Agreement
provides for a refunding of the Notes theretofore issued and then
Outstanding upon the satisfaction of the conditions set forth in
Sections 2 and 11(c) of the Participation Agreement; 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 of the Owner
Participant in the event of the issuance of Fixed Rate Notes; and
WHEREAS, on December 14, 1993, at the direction of the
Lessee and the Owner Participant, the Owner Trustee gave the
Indenture Trustee notice of prepayment, which notice provided, in
accordance with Section 3.9(c) of the Indenture, that such
prepayment is conditional upon the receipt by the Indenture
Trustee on or prior to the Refunding Date, of moneys sufficient
to pay the principal of, and the premium, if any, and interest on
the Outstanding Notes and that if such moneys shall not have been
so received, said notice shall be of no force and effect and the
Owner Trustee shall not be required to prepay the Outstanding
Notes, on January 18, 1994 of the Outstanding Notes and the
Original Funding Corporation gives notice to the Collateral Trust
Trustee of the redemption on January 18, 1994 of the Bonds
Outstanding, which notice was correspondingly conditional; and
WHEREAS, the parties hereto wish to cause the issuance
of a new series of Fixed Rate Notes (the "Refunding Notes") in
order to refund the Outstanding Notes and redeem the outstanding
Bonds; and
WHEREAS, the Lessee has filed with the Securities and
Exchange Commission a Registration Statement on Form S-3 (Reg.
No. 33-51175) relating to the New Bonds, which Registration
Statement became effective on December 28, 1993; and
WHEREAS, Section 10.1(viii) of the Indenture provides,
among other things, that the Owner Trustee and Indenture Trustee
may, without consent of the Holders of Notes Outstanding, execute
a supplement to the Indenture in order to evidence the issuance
of and to provide the terms of Additional Notes; and
WHEREAS, subject to the conditions set forth herein,
the Owner Trustee and the Indenture Trustee intend to execute
Supplemental Indenture No. 2 to the Indenture, dated as of
January 1, 1994 ("Supplemental Indenture No. 2"), providing for
the issuance under the Indenture of Refunding Notes as
contemplated in Supplemental Indenture No. 2; and
WHEREAS, Section 10.2(ii) of the Indenture provides,
among other things, that, upon receipt of a written instruction
from the Lessee and the Owner Trustee, the Indenture Trustee
shall consent to certain amendments of the Facility Lease; and
WHEREAS, subject to the conditions set forth herein,
the Owner Trustee and the Lessee intend to execute Lease
Supplement No. 2 to the Facility Lease, dated as of January 1,
1994 ("Lease Supplement No. 2"), to amend certain schedules
thereto;
WHEREAS, subject to the conditions set forth herein,
the Owner Participant and the Lessee intend to execute Amendment
No. 1 dated as of January 1, 1994 to the Tax Indemnification
Agreement No. 2 ("TIA Amendment No. 1"), to amend certain
provisions of the Tax Indemnification Agreement;
WHEREAS, Basic Rent and the Value Schedules, as set
forth in Lease Supplement No. 2, have been adjusted to take into
effect, among other things, the additional Tax Assumptions set
forth on TIA Amendment No. 1 and the additional Pricing
Assumptions set forth on 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:
SECTION 1. Definitions.
For purposes hereof, capitalized terms used herein and
not otherwise defined herein shall have the respective meanings
assigned to such terms as set forth in Appendix A to the
Participation Agreement.
SECTION 2. Agreement of Funding Corporation.
(a) Subject to the terms and conditions hereof and of
Section 2 and 11(c) of the Participation Agreement, on the
Refunding Date, Funding Corporation shall make a Refunding Loan
to the Owner Trustee by paying to the Indenture Trustee for the
account of the Owner Trustee immediately available funds in an
amount equal to $87,093,000. 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 3(c)(ii).
(b) On and as of the Refunding Date, Original Funding
Corporation hereby assigns to Funding Corporation and Funding
Corporation hereby assumes all rights and obligations of Original
Funding Corporation under the Participation Agreement and
thereupon the Original Funding Corporation shall be released and
discharged from any further obligations under the Participation
Agreement. Notwithstanding the foregoing, Original Funding
Corporation shall continue to have the rights and obligations of
an Indemnitee under Section 13 of the Participation Agreement. On
and as of the Refunding Date (and for purposes of the definitions
contained in this Agreement on and as of the date of the
execution and delivery hereof), Appendix A to the Participation
Agreement shall be amended such that Funding Corporation, as
defined therein, shall mean GG1B Funding Corporation, a Delaware
corporation (it being understood that the reference to "Funding
Corporation" in Section 11(c) of the Participation Agreement
refers to GG1B Funding Corporation in the context of the
Refunding Loan contemplated hereby).
SECTION 3. Issuance of Refunding Notes by
Owner Trustee; Application of
Proceeds.
Subject to the terms and conditions hereof and of
Sections 2 and 11(c) of the Participation Agreement and Section
3.5 of the Indenture, on the Refunding Date, (a)(i) the Lessee
and the Lessor shall enter into Lease Supplement No. 2, (ii) the
Owner Trustee and the Indenture Trustee shall enter into
Supplemental Indenture No. 2, and (iii) the Lessee, the 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 to the
Collateral Trust Indenture ("Collateral Trust Supplement") and
(iv) the Lessee and the Owner Participant will enter into the TIA
Amendment No. 1, (b) the Lessee shall make a Supplemental Rent
payment pursuant to Section 3(b)(ii) of the Facility Lease in the
amount of $6,534,775.05, (c) upon receipt of the Refunding Loan
to be made by Funding Corporation in accordance with Section 2
hereof and such Supplemental Rent payment, the Indenture Trustee,
at the direction of the Owner Trustee, shall (i) authenticate and
deliver the Refunding Notes, in the aggregate principal amount of
the Refunding Loan and bearing interest at the rates per annum
and in the amounts, respectively, set forth in Supplemental
Indenture No. 2 and (ii) apply the proceeds of the Refunding Loan
to the prepayment in full of the principal of the Outstanding
Notes (it being understood that any accrued interest on the
Outstanding Notes shall be paid from the Rent payable by the
Lessee under the Facility Lease on the Refunding Date and that
the premium payable upon the prepayment of the Outstanding Notes
shall be paid from the Supplemental Rent payable by the Lessee in
accordance with clause (b) hereof under Section 3(b)(ii) of the
Facility Lease on the Refunding Date) and (d) Schedule 5 to the
Participation Agreement shall be amended to include the
additional Pricing Assumptions set forth on Schedule 2 hereof.
SECTION 4. Implementation.
(a) Forms. The forms of Supplemental Indenture No. 2,
Lease Supplement No. 2, the Collateral Trust Indenture and the
Collateral Trust Supplement and the TIA Amendment No. 1 are
attached hereto as Exhibits A, B, C, D and E 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(d) and 11(c) of the Participation
Agreement and Section 3.5 of the Indenture, and subject to the
Owner Trustee having received the Rent payments described in
Section 3, the Owner Participant hereby agrees that, on the
Refunding Date, it will execute and deliver TIA Amendment No. 1
and direct (i) the Owner Trustee to execute and deliver
Supplemental Indenture No. 2 and Lease Supplement No. 2
(collectively, with this Refunding Agreement and TIA Amendment
No. 1, the "Refunding Documents") in the forms of Exhibits A and
B hereto, respectively, (ii) the Corporate Owner Trustee to
execute Refunding Notes as contemplated by the Refunding
Documents and to request the Indenture Trustee (x) to
authenticate and deliver the Refunding Notes pursuant to Section
3.5 of the Indenture and (y) in view of the fact that Funding
Corporation is to pledge such Refunding Notes to the Collateral
Trust Trustee, to cause such Refunding Notes to be delivered
directly to, and registered in the name of, the Collateral Trust
Trustee and (iii) the Corporate Owner Trustee to execute and
deliver all other agreements, instruments and certificates
contemplated by the Transaction Documents, the Financing
Documents and the Refunding Documents.
(c) Instruction and Consent. Subject to satisfaction
of the terms and conditions of Section 2(d) and 11(c) of the
Participation Agreement and Section 3.5 of the Indenture, (x) in
accordance with Section 10.2(ii) of the Indenture, the Lessee and
the Owner Trustee hereby instruct the Indenture Trustee to
consent, effective as of the Refunding Date, to Lease Amendment
No. 2 and the Indenture Trustee hereby so consents and (y) in
accordance with Section 10.1(viii) of the Indenture, the Owner
Trustee and the Indenture Trustee hereby consent and agree to
execute and deliver Supplemental Indenture No. 2 on the Refunding
Date.
(d) Consent of Lessee. In accordance with Section
8(b)(2) of the Participation Agreement, the Lessee hereby
consents to the refunding of the Outstanding Notes as
contemplated hereby.
(e) Recordations and Filings. The Lessee agrees that
it will cause to be made the recordations and filings set forth
in Schedule 1 hereto and represents that such filings and
recordations are all the recordations and filings that are
necessary in order 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. 2, and the first and prior
security interest of the Indenture Trustee in the Lease Indenture
Estate under the Indenture, as amended by Supplemental Indenture
No. 2.
(f) Funding Corporation Consent. Pursuant to the
Collateral Trust Indenture, Funding Corporation shall assign to
the Collateral Trust Trustee all of Funding Corporation's right,
title and interest in and to the Refunding Notes, as security for
Funding Corporation's obligations under the Collateral Trust
Indenture and, therefore, Funding Corporation hereby consents to
the Owner Trustee's issuance of the Refunding Notes directly to
the Collateral Trust Trustee.
SECTION 5. Conditions Precedent.
(a) Conditions Precedent to Obligations of Funding
Corporation. The obligations of Funding Corporation and the
Lessee to take the actions specified in Sections 2 and 3 hereof
on the Refunding Date shall be subject to the following
conditions precedent:
(i) the Underwriting Agreement dated January 11,
1994 (the "Underwriting Agreement") among Funding
Corporation, the Lessee, Morgan Stanley & Co.
Incorporated, Bear, Stearns & Co. Inc. and Goldman,
Sachs & Co. (collectively, the "Underwriters") relating
to the offer and sale to the public of $435,102,000
aggregate principal amount of Secured Lease Obligation
Bonds of Funding Corporation (the "Bonds") shall have
been executed and delivered;
(ii) the Underwriters shall have purchased the
Bonds pursuant to the Underwriting Agreement; and
(iii) the conditions set forth in Sections 2 and
11(c) of the Participation Agreement and in the
Underwriting Agreement shall have been satisfied.
(b) Conditions Precedent to Obligations of the Owner
Trustee. The obligations of the Owner Trustee to issue and
deliver the Refunding Notes to the Collateral Trust Trustee, as
assignee of Funding Corporation on the Refunding Date in
consideration of the Refunding Loan shall be subject to (x) the
simultaneous performance by Funding Corporation of its
obligations under Sections 2 and 3 hereof and the payment by the
Lessee of Basic Rent, the prepayment of Basic Rent, and
Supplemental Rent referred to in Section 3 hereof, (y) the
satisfaction of the conditions set forth in Sections 2 and 11(c)
of the Participation Agreement and Section 3.5 of the Indenture
to the participation by the Owner Trustee in the transactions
contemplated by this Refunding Agreement and (z) receipt of a
direction from the Owner Participant to the effect set forth in
Section 4(b) hereof.
(c) Conditions Precedent to Obligations of the
Indenture Trustee. The obligations of the Indenture Trustee to
take the action required by Section 3 hereof on the Refunding
Date shall be subject to the satisfaction of the conditions set
forth in Section 3.5 of the Indenture.
SECTION 6. Expenses.
The Lessee hereby affirms that it shall pay, as
Supplemental Rent pursuant to Section 14(b)(ii)(g) of the
Participation Agreement, 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 the refunding contemplated hereby; provided,
however, that:
(i) Lessee shall pay a fee of $90,000 to the
Owner Participant in connection with the
refinancing;
(ii) Lessee shall pay a financial advisory fee of
$30,000 to Cornerstone Financial Advisors,
the financial advisor of the Owner
Participant;
(iii) Lessee shall pay on an After Tax Basis the
financial advisory fee and $50,000 of the fee
payable to the Owner Participant, the
amortization of which shall be reflected in
Basic Rent and Casualty Values.
Notwithstanding anything to the contrary in
any of the Transaction Documents, Lessee
shall not pay on an After Tax Basis (or
otherwise indemnify the Owner Participant
for) the $40,000 of the fee to the Owner
Participant;
(iv) In the event that the financial advisory fee
shall exceed the amounts set forth above, any
such excess amounts, together with any other
fees, expenses or disbursements of Owner
Participant (including without limitation the
fees and disbursements of legal counsel for
the Owner Participant shall be for the
account of the Owner Participant, shall not
be reimbursable by the Lessee, and shall be
disregarded for the purposes of the Tax
Indemnification Agreement;
(v) Lessee shall not be required to reimburse the
Owner Participant for any other fees,
expenses, disbursements or costs, whether
payable under Section 14(b)(g)(ii) of the
Participation Agreement or otherwise payable
in connection with the refunding contemplated
herein.
SECTION 7. Miscellaneous.
(a) Execution. This Refunding Agreement may be
executed in any number of counterparts and by different parties
hereto on 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.
(b) Governing Law. This Refunding Agreement 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.
(c) Notices to Owner Participant. In accordance with
Section 18 of the Participation Agreement, the Owner Participant
does hereby designate that all communications, notices and
consents to the Owner Participant provided for in the
Participation Agreement shall be addressed as follows unless and
until the Owner Participant shall hereafter designate another
address in accordance with such Section 18:
Textron Financial Corporation
10 Dorrance Street
Post Office Box 6687
Providence, Rhode Island 02940-6687
Attention: Vice President - Law
Telephone: (401) 272-8000
Telecopy: (401) 751-1239
All payments required to be made to the "Owner
Participant" under any Transaction Document shall be made to the
following account unless and until the Owner Participant shall
hereafter designate another account for such purpose: The Chase
Manhattan Bank (National Association), One Chase Manhattan Plaza,
New York, New York 10004, Attention: Account No. #910-2-414969,
ABA #021-000-021 (Textron Financial Corporation (notify James E.
McGeary)).
(d) Concerning the Owner Trustee. MTC and Stephen J.
Kaba are entering into this Refunding Agreement solely as Owner
Trustee under the Trust Agreement and not in their individual
capacities. Anything herein to the contrary notwithstanding, all
and each of the agreements herein made on the part of the Owner
Trustee are made and intended not as personal agreements of MTC
and Stephen J. Kaba but are made and intended for the purpose of
binding only the Trust Estate.
(e) Concerning the Indenture Trustee. BTC and Stanley
Burg are entering into this Refunding Agreement solely as
Corporate Indenture Trustee and Individual Indenture Trustee,
respectively, under the Indenture and not in their individual
capacities. Anything herein to the contrary notwithstanding, all
and each of the respective agreements herein made on the part of
the Corporate Indenture Trustee and Individual Indenture Trustee,
respectively, are made and intended not as personal agreements
for BTC and Stanley Burg, as the case may be, but are made and
intended solely as the agreements of the Corporate Indenture
Trustee and the Individual Indenture Trustee pursuant to the
Indenture, in the exercise of the powers and authority conferred
and vested in the Corporate Indenture Trustee and Individual
Indenture Trustee, respectively,pursuant to the Indenture.
(f) Owner Trustee's, Owner Participant's and Indenture
Trustee's Obligations. The obligations and duties of the Owner
Trustee, the Owner Participant and the Indenture Trustee under
this Agreement are limited to those expressly set forth herein as
obligations of the Owner Trustee, the Owner Participant and the
Indenture Trustee, respectively. Without limiting the generality
of the foregoing, neither the Owner Trustee nor the Owner
Participant shall have any obligations or duties with respect to
the redemption of the bonds issued by Original Funding
Corporation or the issuance of the Bonds.
IN WITNESS WHEREOF, the parties hereto have caused this
Refunding Agreement to be duly executed by their respective
officers thereunto duly authorized.
<PAGE>
TEXTRON FINANCIAL CORPORATION
as Owner Participant
By _____________________________
Name:
Title:
<PAGE>
GG1B FUNDING CORPORATION
By _____________________________
Name:
Title:
<PAGE>
MERIDIAN TRUST COMPANY, not in its
individual capacity, but solely as
Corporate Owner Trustee under the
Trust Agreement
By _____________________________
Name:
Title:
By _____________________________
STEPHEN J. KABA, not in his
individual capacity, but
solely as Individual Owner
Trustee under the Trust
Agreement
<PAGE>
BANKERS TRUST COMPANY, not in its
individual capacity but solely as
Corporate Indenture Trustee
By _____________________________
Name:
Title: Vice President
__________________________________
STANLEY BURG, not in his individual
capacity but solely as Individual
Indenture Trustee
<PAGE>
SYSTEM ENERGY RESOURCES, INC., as
Lessee
By ______________________________
Name:
Title:
<PAGE>
SCHEDULE 1
Recordations and Filings
Part I. Land Record Filings.
A. Chancery Clerk, Claiborne County, Mississippi
1. Lease Supplement No. 2 to the Facility Lease.
2. Supplemental Indenture No. 2 to the Indenture.
3. Collateral Trust Indenture.
4. Supplemental Indenture No. 1 to the Collateral
Trust Indenture.
Part II. Uniform Commercial Code Filings.
A. Chancery Clerk, Claiborne County, Mississippi:
1. UCC-3 to amend the UCC-l filed with respect to the
Facility Lease naming SERI as Lessee and the Owner
Trustee as Lessor, attaching thereto Lease
Supplement No. 2 to the Facility Lease.
2. UCC-3 to amend the UCC-l filed with respect to the
Indenture, naming the Owner Trustee as debtor and
the Indenture Trustee as secured party in respect
of the Lease Indenture Estate, attaching thereto
Supplemental Indenture No. 2 to the Indenture.
3. UCC-l with respect to the Collateral Trust
Indenture, as amended by Supplemental Indenture
No. 2 thereto, naming GG1B Funding Corporation as
debtor and Bankers Trust Company, Trustee, as
secured party.
B. Chancery Clerk, Hinds County, Mississippi:
1. UCC-3 to amend the UCC-1 filed with respect to the
Facility Lease naming SERI as Lessee and the Owner
Trustee as Lessor, attaching thereto Lease
Supplement No. 2 to the Facility Lease.
2. UCC-3 to amend the UCC-l filed with respect to the
Indenture, naming the Owner Trustee as debtor and
the Indenture Trustee as secured party in respect
of the Lease Indenture Estate, attaching thereto
Supplemental Indenture No. 2 to the Indenture.
3. UCC-l with respect to the Collateral Trust
Indenture, as amended by Supplemental Indenture
No. 1 thereto, naming GG1B Funding Corporation as
debtor and Bankers Trust Company, Trustee, as
secured party.
C. Mississippi Secretary of State.
1. UCC-3 to amend the UCC-l filed with respect to the
Facility Lease naming SERI as Lessee and the Owner
Trustee as Lessor, attaching thereto Lease
Supplement No. 2 to the Facility Lease.
2. UCC-3 to amend the UCC-l filed with respect to the
Indenture, naming the Owner Trustee as debtor and
the Indenture Trustee as secured party in respect
of the Lease Indenture Estate, attaching thereto
Supplemental Indenture No. 2 to the Indenture.
3. UCC-1 with respect to the Collateral Trust
Indenture, as amended by Supplemental Indenture
No. 1 thereto, naming GG1B Funding Corporation as
debtor and Bankers Trust Company, Trustee, as
secured party.
D. Secretary of State of Delaware.
UCC-1 with respect to the Collateral Trust
Indenture, as amended by Supplemental Indenture
No. 1 thereto, naming GG1B Funding Corporation as
debtor and Bankers Trust Company, Trustee, as
secured party.
E. Secretary of State of New York.
UCC-1 with respect to the Collateral Trust
Indenture, as amended by Supplemental Indenture
No. 1 thereto, naming GG1B Funding Corporation as
debtor and Bankers Trust Company, Trustee, as
secured party.
<PAGE>
Schedule 2
Additional Pricing Assumptions
Basic Rent, Casualty Values and Special Casualty
Values, as set forth in the Facility Lease, as amended by
Supplement No. 2, dated as of January 1, 1994, 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: January 18, 1994
2. Interest Rate on and Amortization of Notes:
See Supplemental Indenture No. 2, dated
as of January 1, 1994.
3. Refunding Expenses:
a) $775,025.85 paid by the Lessee on the Refunding Date
on an After-Tax Basis (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).
b) $6,534,775.05 paid by the Lessee on the Refunding Date
in respect of the premium on the Notes
redeemed on the Refunding Date.
c) $40,000 fee paid to Owner Participant on the
Refunding Date not to be taken into account
for pricing assumptions.
4. Additional Basic Rent: $82,331.15 as interest from
January 15, 1994 to the Refunding
Date on Notes which are redeemed on
the Refunding Date.
5. Owner Participant's
Marginal Federal Tax Rate: 35% (subject to proviso
contained in Section 3(d) of
the Lease).
Exhibit B-12
AMENDMENT NO. 1
dated as of January 1, 1994
to
TAX INDEMNITY AGREEMENT
dated as of December 1, 1988
between
[RESOURCES CAPITAL MANAGEMENT CORPORATION/
TEXTRON FINANCIAL CORPORATION]
as Beneficiary under a Trust Agreement,
dated as of December 1, 1988
with
MERIDIAN TRUST COMPANY,
AS OWNER TRUSTEE,
Lessor,
and
SYSTEM ENERGY RESOURCES, INC.
Lessee
<PAGE>
AMENDMENT No. 1, dated as of January 1, 1994, to the Tax
Indemnity Agreement dated as of December 1, 1988, between [Public
Service Resources Corporation/Textron Financial Corporation] (the
Owner Participant), with Meridian Trust Company, as Owner Trustee
under a Trust Agreement, dated as of December 1, 1988 (the
Lessor) and System Energy Resources, Inc. (the Lessee).
Capitalized terms not otherwise defined herein shall have the
respective meanings specified in Appendix A to the Participation
Agreement, as amended through and including the date hereof and
the Refunding Agreement No. [1-A/2-A] (the Refunding Agreement).
W I T N E S S E T H:
A. The Owner Trustee, as Lessor, and the Lessee are
parties to the Facility Lease, whereby the Lessor, as
lessor, has leased the Undivided Interest to the Lessee, as
lessee.
B. The Basic Rent payable by the Lessee under Section
3(e) of the Facility Lease, as adjusted pursuant to Lease
Supplement No. 2, dated as of the date hereof, has been
determined in part on the assumption that the Owner
Participant will be entitled to certain Federal income tax
benefits;
C. In connection with the issuance of the Refunding
Notes and the Bonds, as contemplated by the Refunding
Agreement, dated as of the date hereof, the parties hereto
desire to amend the circumstances under which the Lessee
shall be required to indemnify the Owner Participant for the
loss of tax benefits;
NOW, THEREFORE, in consideration of the mutual
covenants contained herein and in the documents referred to
above, the parties hereby agree as follows:
Section 1. Amendments
(a) The Tax Indemnity Agreement is hereby amended by
inserting "and/or the Refunding Documents" after the term
"Transaction Documents" throughout the Agreement.
(b) Section 1.1(h) of the Tax Indemnity Agreement is
amended by the deletion of "and (vi)" and the substitution,
in lieu thereof, of ", (vi) payment of Supplemental Rent in
the amount of $____________, as contemplated by Section 3 of
the Refunding Agreement in the year that such payment is
made, and (vii)".
(c) Section 1.1 (i) of the Tax Indemnity Agreement is
amended to read as follows:
"(i) The Owner Participant's marginal
federal rate of tax is 34% for the taxable
year that includes the Closing Date and for
each taxable year which ends thereafter but
on or before December 31, 1992; and is 35%
for the taxable year that ends on December
31, 1993 and for each taxable year
thereafter."
(d) Section 1.1 of the Tax Indemnity Agreement is
amended by the addition of the following new paragraphs (o)
and (p):
"(o) The Owner Participant will be allowed a
current deduction in the taxable year of the
Owner Participant that includes the Refunding
Date in an amount equal to the excess of the
amount paid in redemption of the Bonds on
that Date over the unpaid principal and
accrued interest on such Bonds as of the
Refunding Date (the Premium Deduction).
(p) The Owner Participant will be entitled
to deduct the fees, costs and expenses
referred to in Section 6 of the Refunding
Agreement, other than those referred to in
the second sentence of subparagraph (iii)
thereof (the Refund Transaction Expenses) on
a straight-line basis over the period that
commences on the Refunding Date and concludes
on the last day of the Basic Lease Term (the
Refunding Amortization Deductions)."
(e) The final paragraph of Section 1.1 of the Tax
Indemnity Agreement is amended by the deletion of "(n)" and
the substitution, in lieu thereof, of "(p)".
(f) Section 3.1(a)(2)(A) of the Tax Indemnity
Agreement is amended by the deletion of "or the Interest
Deductions" and the substitution, in lieu thereof, of "the
Interest Deductions, the Premium Deduction, or the Refunding
Amortization Deductions".
(g) Section 1.2(d) of the Tax Indemnity Agreement is
amended by inserting "the Premium Deduction, the Refunding
Amortization Deductions," immediately after the phase "the
Amortization Deductions,".
(h) Sections 6(a)(i) and 6(b) of the Tax Indemnity
Agreement are amended by replacing the phrase "or the
Interest Deductions" with the phrase ", the Interest
Deductions, the Premium Deduction, or the Refunding
Amortization Deductions".
Section 2. Miscellaneous.
(a) Execution. This Amendment No. 1 may be executed
in any number of counterparts and by the different parties hereto
on 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. Although
this Amendment No. 1 is dated as of the date first above written
for convenience, the actual dates of the execution hereof by the
parties hereto are respectively the dates set forth under the
signatures hereto, and this Amendment No. 1 shall be effective on
the latest of such dates.
(b) Governing Law. This 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 law of the
State of New York.
<PAGE>
IN WITNESS WHEREOF, intending to be legally bound, each
of the parties hereto has caused this Amendment No. 1 to Tax
Indemnity Agreement to be duly executed by an officer thereunto
duly authorized.
[RESOURCE CAPITAL MANAGEMENT CORPORATION/
TEXTRON FINANCIAL CORPORATION]
By
Name:
Title:
Date:
SYSTEM ENERGY RESOURCES, INC.
By
Name:
Title:
Date:
Exhibit F
[Letterhead of Reid & Priest]
New York, New York
January 11, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
We are familiar with (1) the Application-
Declaration on Form U-1 (File No. 70-8215), as amended
("Application-Declaration"), filed by System Energy
Resources, Inc. ("System Energy") with the Securities and
Exchange Commission ("Commission") under the Public Utility
Holding Company Act of 1935, as amended, contemplating,
among other things, the refunding of debt incurred in
connection with the sale and leaseback of a portion of
System Energy's 90% undivided ownership interest in Unit 1
of the Grand Gulf Steam Electric Generating Station with
the issuance and sale by GG1B Funding Corporation of two
separate series of Secured Lease Obligation Bonds and
(2) System Energy's proposed execution of a Collateral
Trust Indenture, a Supplemental Indenture No. 1 to the
Collateral Trust Indenture, an Underwriting Agreement, two
Refunding Agreements, two Lease Supplements to the Facility
Leases, two Supplemental Indentures to the Lease Indentures
and an amendment to System Energy's existing Tax Indemnity
Agreement in connection with said sale and leaseback, all
as referred to and more fully described in the Application-
Declaration (collectively, the "Transactions"). In
connection therewith, we advise you that, in our opinion:
1. System Energy is a corporation duly
organized and validly existing under the laws of the State
of Arkansas.
2. In the event that the Transactions are
consummated in accordance with the Application-Declaration:
(a) all state laws applicable to the
participation by System Energy in the
Transactions will have been complied
with (other than so-called "blue sky"
laws or similar laws, upon which we do
not pass herein); and
(b) the consummation of the Transactions
will not violate the legal rights of
the holders of any securities issued by
System Energy or any associate company
thereof.
We are members of the New York Bar and do not
hold ourselves out as experts on the laws of any other
state. We have made a study of the laws of other states
insofar as they are involved in the conclusions stated
herein.
We consent to the use of this opinion as an
exhibit to the Application-Declaration.
Very truly yours,
REID & PRIEST
