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EXHIBIT 10(j)(3)
 
EXECUTION COPY

 
               [clecologo1.jpg]    
 
[jpmorgan.jpg]
 
LOAN AGREEMENT
 
dated as of February 19, 2010
among
 
CLECO CORPORATION,
as Borrower
 
The Lenders Party Hereto
 
CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,
as Syndication Agent
 
and
 
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
 
___________________________
 
J.P. MORGAN SECURITIES INC.,
as Lead Arranger and Book Runner
 
   

 

 
 

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TABLE OF CONTENTS
 
Page

ARTICLE 1. DEFINITIONS
1
 
Section 1.1
Defined Terms
1
Section 1.2
Classification of Loans and Borrowings
21
Section 1.3
Terms Generally
21
Section 1.4
Accounting Terms; GAAP
21
Section 1.5
Rounding
22
 
ARTICLE 2. THE CREDITS
22
 
Section 2.1
Commitments
22
Section 2.2
Loans and Borrowings
22
Section 2.3
Requests for Borrowings on the Effective Date.
23
Section 2.4
Funding of Borrowings.
23
Section 2.5
Termination of Commitments
24
Section 2.6
Repayment of Loans; Evidence of Debt
24
Section 2.7
Prepayment of Loans
24
Section 2.8
[Intentionally Omitted]
25
Section 2.9
Payments Generally; Pro Rata Treatment; Sharing of Set-offs
25
Section 2.10
Defaulting Lenders
26
 
ARTICLE 3. INTEREST, FEES, YIELD PROTECTION, ETC.
27
 
Section 3.1
Interest
27
Section 3.2
Interest Elections Relating to Borrowings
27
Section 3.3
Fees
28
Section 3.4
Alternate Rate of Interest
29
Section 3.5
Increased Costs; Illegality
29
Section 3.6
Break Funding Payments
30
Section 3.7
Taxes
31
Section 3.8
Mitigation Obligations
33
 
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
33
 
Section 4.1
Organization; Powers
33
Section 4.2
Authorization; Enforceability
33
Section 4.3
Governmental Approvals; No Conflicts
33
Section 4.4
Financial Condition; No Material Adverse Change
34
Section 4.5
Properties
34
Section 4.6
Litigation and Environmental Matters
34
Section 4.7
Compliance with Laws and Agreements
36
Section 4.8
Investment Company Status
36
Section 4.9
Taxes
36
Section 4.10
ERISA
36
Section 4.11
Disclosure
36
Section 4.12
Subsidiaries
36
Section 4.13
Federal Reserve Regulations, etc.
37
 
ARTICLE 5. CONDITIONS
37
 
Section 5.1
Effective Date
37
Section 5.2
Each Credit Event
38
 
ARTICLE 6. AFFIRMATIVE COVENANTS
39
 
Section 6.1
Financial Statements and Other Information
39
Section 6.2
Notices of Material Events
40

Cleco Corporation Loan Agreement

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TABLE OF CONTENTS
 
Page

Section 6.3
Legal Existence
41
Section 6.4
Taxes
42
Section 6.5
Insurance
42
Section 6.6
Payment of Indebtedness and Performance of Obligations
42
Section 6.7
Condition of Property
42
Section 6.8
Observance of Legal Requirements
42
Section 6.9
Inspection of Property; Books and Records; Discussions
42
Section 6.10
Licenses, Intellectual Property
43
Section 6.11
Financial Covenants
43
Section 6.12
Use of Proceeds
43
 
ARTICLE 7. NEGATIVE COVENANTS
43
 
Section 7.1
Indebtedness; Equity Interests
43
Section 7.2
Liens
44
Section 7.3
Merger, Consolidation, Purchase or Sale of Assets, Etc.
45
Section 7.4
Loans, Advances, Investments, etc.
48
Section 7.5
Amendments, etc. of Employee Stock Ownership Plan
48
Section 7.6
Restricted Payments
49
Section 7.7
Transactions with Affiliates
49
Section 7.8
Restrictive Agreements
49
Section 7.9
Permitted Hedge Agreements
50
 
ARTICLE 8. EVENTS OF DEFAULT
50
 
ARTICLE 9. THE ADMINISTRATIVE AGENT
52
 
ARTICLE 10. MISCELLANEOUS
54
 
Section 10.1
Notices
54
Section 10.2
Waivers; Amendments
55
Section 10.3
Expenses; Indemnity; Damage Waiver
56
Section 10.4
Successors and Assigns
57
Section 10.5
Survival
60
Section 10.6
Counterparts; Integration; Effectiveness
61
Section 10.7
Severability
61
Section 10.8
Right of Set-off
61
Section 10.9
Governing Law; Jurisdiction; Consent to Service of Process
62
Section 10.10
WAIVER OF JURY TRIAL
62
Section 10.11
Headings
62
Section 10.12
Interest Rate Limitation
62
Section 10.13
Advertisement
63
Section 10.14
USA Patriot Act Notice
63
Section 10.15
Treatment of Certain Information
63

 

(ii)
Cleco Corporation Loan Agreement
 
 

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SCHEDULES:
 
Schedule 2.1
List of Commitments
Schedule 4.6
Disclosed Matters
Schedule 4.12
List of Subsidiaries
Schedule 7.2
List of Existing Liens
Schedule 7.8
List of Existing Restrictions

EXHIBITS:
 
Exhibit A
Form of Assignment and Assumption
Exhibit B
Form of Opinion of Counsel to the Borrower
Exhibit C
Form of Initial Borrowing Request
Exhibit D
Form of Note
Exhibit E
Form of Compliance Certificate
Exhibit F
Approved Subordination Terms

 

(iii)
Cleco Corporation Loan Agreement
 
 

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LOAN AGREEMENT, dated as of February 19, 2010, by and among CLECO CORPORATION,
the Lenders party hereto, CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as
syndication agent hereunder, and JPMORGAN CHASE BANK, N.A., as Administrative
Agent for the Lenders hereunder.
 
The parties hereto agree as follows:
 
 
ARTICLE 1.
 
DEFINITIONS
 

Section 1.1 Defined Terms. As used in this Loan Agreement, the following terms
have the meanings specified below:
 
“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.
 
“Acadia Holdings” means Acadia Power Holdings LLC, a Louisiana limited liability
company and a wholly owned subsidiary of Midstream.
 
“Acadia Power” means Acadia Power Partners LLC, a Delaware limited liability
company, which on the Effective Date is fifty percent (50%) owned by Acadia
Holdings.
 
“Acadia Facility” means the gas-fired, combined-cycle electric generating
facility located near Eunice in Acadia Parish, Louisiana, owned on the Closing
Date by Acadia Power, which has two 2x1 gas-fired combined-cycle power blocks 
that share common equipment and facilities (collectively, the “Common
Facilities”).
 
“Acadia Transactions” means a series of transactions whereby the Utility will
acquire 100% ownership of Power Block One and a 50% undivided ownership interest
in the Common Facilities as a capital contribution from the Borrower, as part of
transactions made possible by Borrower's purchase (through Acadia Holdings) of
50% of the Equity Interests in Cajun for approximately $152,000,000.
 
“Accountants” means PricewaterhouseCoopers, L.L.P. or another registered public
accounting firm of recognized national standing.
 
“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to (i) the LIBO Rate for such Interest Period
multiplied by (ii) the Statutory Reserve Rate.
 
“Administrative Agent” means JPMCB, in its capacity as administrative agent for
the Lenders hereunder.
 
“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.
 
 
Cleco Corporation Loan Agreement

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“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
 
“Agents” means, collectively, the Administrative Agent and the Syndication
Agent.
 
“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (i) the Prime Rate in effect on such day, (ii) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1% and (iii) the LIBO Rate for a one
month Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1%. Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the
LIBO Rate shall be effective from and including the effective date of such
change in the Prime Rate, the Federal Funds Effective Rate or the LIBO Rate,
respectively.
 
“Applicable Margin” means, during the periods in which the applicable Pricing
Level set forth below is in effect: (i) with respect to Eurodollar Borrowings,
the percentage set forth in the following table under the heading “Eurodollar
Margin”, and (ii) with respect to ABR Borrowings, the percentage set forth in
the following table under the heading “ABR Margin”:
 
Pricing Level
 
Eurodollar Margin
 
ABR Margin
Pricing Level I
2.50%
1.50%
Pricing Level II
2.75%
1.75%
Pricing Level III
3.25%
2.25%

Changes in the Applicable Margin resulting from a change in the Pricing Level
shall become effective on the effective date of any change in the Senior Debt
Rating from S&P or Moody’s.  Notwithstanding anything in clause (a) of this
definition to the contrary, in the event of a split in the Senior Debt Rating
from S&P and Moody’s that would otherwise result in the application of more than
one Pricing Level (had the provisions regarding the applicability of other
Pricing Levels contained in the definitions thereof not been given effect), then
the Applicable Margin shall be determined as follows: (i) in the event of a
split in the Senior Debt Rating from S&P and Moody’s between Pricing Level I and
Pricing Level II, then the Applicable Margin shall be determined using Pricing
Level I, and (ii) in the event of a split in the Senior Debt Rating from S&P and
Moody’s between Pricing Level II and Pricing Level III or Pricing Level I and
Pricing Level III, then the Applicable Margin shall be determined using Pricing
Level III.
 
“Applicable Percentage” means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender’s Commitment. If the Commitments
have terminated or expired, the Applicable Percentages shall be determined based
upon the percentage obtained by dividing such Lender’s outstanding Loans by the
aggregate outstanding principal amount of all Loans at such time.
 
“Approved Fund” means, with respect to any Lender that is a fund that invests in
commercial loans, any other fund that invests in commercial loans and is managed
or advised by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.
 
“Approved Subordination Terms” means terms of subordination substantially as set
forth on Exhibit F.
 
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“Asset Sale” means any sale, transfer or other disposition by the Borrower or
any of the Restricted Subsidiaries to any Person of any property (including any
Equity Interests or other securities of another Person) of the Borrower or any
of the Restricted Subsidiaries, other than inventory or accounts receivables or
other receivables sold, transferred or otherwise disposed of in the ordinary
course of business, provided that, notwithstanding anything in this definition
to the contrary, for purposes of the Loan Documents, the term “Asset Sale” shall
not include the creation or granting of any Lien other than a conditional sale
or other title retention arrangement.
 
“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 10.4), and accepted by the Administrative Agent, substantially in the
form of Exhibit A or in such other form as shall be acceptable to the
Administrative Agent.
 
“Attala Transmission” means Attala Transmission LLC, a Louisiana limited
liability company and a direct wholly-owned Subsidiary.
 
“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.
 
“Borrower” means Cleco Corporation, a Louisiana corporation.
 
“Borrower Financial Statements” has the meaning assigned to such term in Section
4.4(a).
 
“Borrower Materials” has the meaning assigned to such term in Section 6.2.
 
“Borrowing” means Loans of the same Type made, converted or continued on the
same date and, in the case of Eurodollar Loans, as to which a single Interest
Period is in effect.
 
“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed, provided that, when used in connection with a Eurodollar Loan,
the term “Business Day” shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
 
“Cajun” means Cajun Gas Energy LLC, a Delaware limited liability company.
 
“Cajun Transaction” means the transaction whereby, immediately after the closing
of the ELL Transaction, Acadia Holdings and an investor group previously
identified to the Administrative Agent and the Lenders will (i) cause Acadia
Power to distribute to Cajun the purchase price paid to Acadia Power in the ELL
Transaction, and (ii) cause Cajun to distribute to Acadia Holdings an amount of
such purchase price equal to its pro rata ownership interest in Cajun, plus 100%
of the membership interest in Acadia Power in exchange for the complete
redemption by Cajun of Acadia Holding’s ownership of its 50% membership interest
in Cajun.
 
“Cajun Transaction Date  means the date on which the Cajun Transaction is
consummated (immediately following the consummation of the ELL Transaction).
 
“Capital Lease Obligations” means with respect to any Person, obligations of
such Person with respect to leases which, in accordance with GAAP, are required
to be capitalized on the financial statements of such Person.
 
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“Change in Control” means the occurrence of any of the following: (i) the
consummation of any transaction the result of which is that any “person” or
“group” (within the meaning of Section 13(d)(3) of the Securities Exchange Act
of 1934) becomes the “beneficial owner” (as such term is defined in Rule 13d-3
under the Securities Exchange Act of 1934) of more than 50% of the total voting
power in the aggregate of all classes of the Voting Securities of the Borrower
then outstanding, (ii) the occupation of a majority of the seats (other than
vacant seats) on the board of directors of the Borrower by Persons who were
neither nominated by the board of directors of the Borrower nor appointed by
directors so nominated, (iii) the failure of the Borrower to (x) own directly,
beneficially and of record, 100% of the aggregate ordinary voting power and
economic interests represented by the issued and outstanding equity interests of
the Utility on a fully diluted basis or (y) be the sole member of the Utility,
(iv) the failure of the Borrower to own directly 100% of the aggregate ordinary
voting power and economic interests represented by the issued and outstanding
equity interests of Midstream on a fully diluted basis, (v) the failure of the
Borrower to own directly or indirectly, 100% of the aggregate ordinary voting
power and economic interests represented by the issued and outstanding equity
interests of Acadia Holdings and Evangeline, in each case on a fully diluted
basis or (vi) the failure of the Borrower to own directly or indirectly, 50% of
the aggregate ordinary voting power and economic interests represented by the
issued and outstanding equity interests of Acadia Power.  The consummation of
the Acadia Transactions will not constitute a Change in Control solely as a
result of the Borrower’s failure to own, directly or indirectly, 50% of the
aggregate ordinary voting power and economic interests represented by the issued
and outstanding Equity Interests of Acadia Power as a result of the distribution
by Acadia Power, in connection with the Acadia Transactions, of its Equity
Interests in Power Block 1, LLC to Acadia Holdings in exchange for the complete
redemption by Acadia Power of Acadia Holdings’ Equity Interests in Acadia Power
so long as substantially contemporaneously, and on the same date, Acadia
Holdings becomes the owner of 50% of the Equity Interests in Cajun; provided
that the Lenders agree that on and after the Cajun Transaction Date, the failure
of Acadia Holdings to be the owner of 50% of the Equity Interests in Cajun shall
not be deemed to be a Change in Control.
 
“Change in Law” means (i) the adoption of any law, rule or regulation after the
Closing Date, (ii) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
Closing Date or (iii) compliance by any Credit Party (or, for purposes of
Section 3.5(b), by any lending office of such Credit Party or by such Credit
Party’s holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the Closing Date.
 
“Cleco Support” means Cleco Support Group LLC, a Louisiana limited liability
company and a direct wholly-owned Subsidiary.
 
“Closing Date” means February 19, 2010.
 
“Code” means the Internal Revenue Code of 1986.
 
“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Loans on the Effective Date in an aggregate outstanding amount not
exceeding the amount of such Lender’s Commitment as set forth on Schedule 2.1 or
in the Assignment and Assumption pursuant to which such Lender shall have
assumed its Commitment in accordance with Section 10.4(b), as applicable.  The
initial aggregate amount of the Commitments on the Closing Date is $150,000,000.
 
“Compliance Certificate” means a certificate, substantially in the form of
Exhibit E.
 
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Cleco Corporation Loan Agreement

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“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. The
terms “Controlling” and “Controlled” have meanings correlative thereto.
 
“Corporate Officer” means with respect to the Borrower, the chairman of the
board, the president, any vice president, the chief executive officer, the chief
financial officer, the secretary, the treasurer, or the controller thereof.
 
“Credit Event” has the meaning assigned to such term in Section 5.2.
 
“Credit Exposure” means, with respect to any Lender at any time, the aggregate
outstanding principal amount of such Lender’s Loans at such time.
 
“Credit Parties” means the Administrative Agent and the Lenders.
 
“Default” means any event or condition which constitutes an Event of Default or
that upon notice, lapse of time or both would, unless cured or waived, become an
Event of Default.
 
“Defaulting Lender” means any Lender, as determined by the Administrative Agent,
that has (a) failed to fund any portion of its Loans within three Business Days
of the date required to be funded by it hereunder, unless the subject of a good
faith dispute, (b) notified the Borrower, the Administrative Agent or any Lender
in writing that it does not intend to comply with any of its funding obligations
under this Loan Agreement or has made a public statement to the effect that it
does not intend to comply with its funding obligations under this Loan Agreement
or under other agreements in which it commits to extend credit, (c) failed,
within three Business Days after request by the Administrative Agent, to confirm
that it will comply with the terms of this Loan Agreement relating to its
obligations to fund prospective Loans, unless the subject of a good faith
dispute, (d) otherwise failed to pay over to the Administrative Agent or any
other Lender any other amount required to be paid by it hereunder within three
Business Days of the date when due, unless the subject of a good faith dispute,
or (e) (i) become or is insolvent or has a parent company that has become or is
insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding,
or has had a receiver, conservator, trustee, administrator, assignee for the
benefit of creditors or similar Person charged with reorganization or
liquidation of its business or custodian, appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment or has a parent company that
has become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee, administrator, assignee for the benefit of
creditors or similar Person charged with reorganization or liquidation of its
business or custodian appointed for it, or has taken any action in furtherance
of, or indicating its consent to, approval of or acquiescence in any such
proceeding or appointment.
 
“Disclosed Matters” means the actions, suits, proceedings and environmental
matters disclosed in Schedule 4.6.
 
“Disqualified Stock” means any Equity Interest that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder thereof), or upon the happening of any
event, matures (excluding any maturity as a result of an optional redemption by
the issuer thereof to the extent not prohibited by this Loan Agreement) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the unconditional sole option of the holder thereof (other than
solely for Equity Interests which do not
 
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constitute Disqualified Stock), in whole or in part, on or prior to the date
that is one year after the Maturity Date.  The term “Disqualified Stock” shall
also include any options, warrants or other rights that are convertible into
Disqualified Stock or that are redeemable at the option of the holder, or
required to be redeemed, prior to the date that is 180 days after the Maturity
Date.
 
“dollars” or “$” refers to lawful money of the United States of America.
 
“EBITDA” means, for any period, net income for such period of the Borrower and
the Subsidiaries, determined on a consolidated basis in accordance with GAAP,
plus, without duplication and to the extent deducted in determining such net
income, the sum of (i) Interest Expense for such period, (ii) provision for
income taxes for such period, (iii) the aggregate amount attributable to
depreciation and amortization for such period, and (iv) the aggregate amount of
items to the extent constituting extraordinary non-recurring or non-operating
charges or expenses during such period and minus, without duplication and to the
extent added in determining such net income for such period, the aggregate
amount of extraordinary, non-recurring and non-operating additions to income
during such period.
 
“Effective Date” has the meaning assigned to such term in Section 5.1.
 
“Eligible Assignee” means any of the following: (i) commercial banks, finance
companies, insurance companies and other financial institutions and funds
(whether a corporation, partnership or other entity) engaged generally in
making, purchasing or otherwise investing in commercial loans in the ordinary
course of its business; provided that any such entity shall be entitled, as of
the date such entity becomes a Lender, to receive payments under its Note
without deduction or withholding with respect to United States federal income
tax, (ii) each of the Lenders and (iii) any Affiliate or Approved Fund of a
Lender.
 
“Eligible SPC” means a special purpose corporation that (i) is organized under
the laws of the United States or any state thereof, (ii) is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary course of
its business and (iii) issues (or the parent of which issues) commercial paper
rated at least A-1 or the equivalent thereof by Standard & Poor’s Ratings
Services, a division of The McGraw Hill Companies or at least P-1 or the
equivalent thereof by from Moody’s Investors Service, Inc.
 
“ELL” means Entergy Louisiana, LLC, a Texas limited liability company.
 
“ELL Transaction” means the transaction whereby Acadia Power has agreed to sell
Power Block Two and a 50% undivided ownership interest in the Common Facilities
to ELL.
 
“ELL Transaction Date” means the date on which the ELL Transaction is
consummated.
 
“Employee Stock Ownership Plan” means The Cleco Power LLC 401(k) Savings and
Investment Plan.
 
“environment” means ambient air, surface water and groundwater (including
potable water, navigable water and wetlands), the land surface or subsurface
strata, the workplace or as otherwise defined in any Environmental Law.
 
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Cleco Corporation Loan Agreement

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“Environmental Claim” means any written accusation, allegation, notice of
violation, claim, demand, order, directive, cost recovery action or other cause
of action by, or on behalf of, any Governmental Authority or any Person for
damages, injunctive or equitable relief, personal injury (including sickness,
disease or death), Remedial Action costs, tangible or intangible property
damage, natural resource damages, nuisance, pollution, any adverse effect on the
environment caused by any Hazardous Material, or for fines, penalties or
restrictions, resulting from or based upon (i) the existence, or the
continuation of the existence, of a Release (including sudden or non-sudden,
accidental or non-accidental Releases), (ii) exposure to any Hazardous Material,
(iii) the presence, use, handling, transportation, storage, treatment or
disposal of any Hazardous Material or (iv) the violation or alleged violation of
any Environmental Law or Environmental Permit.
 
“Environmental Law” means any and all applicable present and future treaties,
laws, rules, regulations, codes, ordinances, orders, decrees, judgments,
injunctions, notices or binding agreements issued, promulgated or entered into
by or with any Governmental Authority, relating in any way to the environment,
preservation or reclamation of natural resources, the presence, management,
Release or threatened Release of any Hazardous Material or to health and safety
matters.
 
“Environmental Permit” means any permit, approval, authorization, certificate,
license, variance, filing or permission required by or from any Governmental
Authority pursuant to any Environmental Law.
 
“Equity Interest” means (i) shares of corporate stock, partnership interests,
membership interests, and any other interest that confers on a Person the right
to receive a share of the profits and losses of, or distribution of assets of,
the issuing Person, and (ii) all warrants, options or other rights to acquire
any Equity Interest set forth in clause (i) of this defined term.
 
“ERISA” means the Employee Retirement Income Security Act of 1974.
 
“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower or any Subsidiary, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
 
“ERISA Event” means (i) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30 day notice period is waived); (ii) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (iii)
the filing pursuant to Section 412(d) of the Code or Section 303(a) of ERISA of
an application for a waiver of the minimum funding standard with respect to any
Plan; (iv) the incurrence by the Borrower, any Subsidiary or any ERISA Affiliate
of any liability under Title IV of ERISA with respect to the termination of any
Plan; (v) the receipt by  the Borrower, any Subsidiary or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (vi)
the incurrence by the Borrower, any Subsidiary or any ERISA Affiliate of any
liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (vii) the receipt by the Borrower, any Subsidiary or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Borrower, any Subsidiary or any ERISA Affiliate of any notice, concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA.
 
 
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Cleco Corporation Loan Agreement

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“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.
 
“Evangeline” means Cleco Evangeline LLC, a Louisiana limited liability company
and a wholly owned subsidiary of Midstream.
 
“Event of Default” has the meaning assigned to such term in Article 8.
 
“Federal Funds Effective Rate” means, for any day, a rate per annum (expressed
as a decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%)
equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day, provided that (i) if the day for
which such rate is to be determined is not a Business Day, the Federal Funds
Effective Rate for such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding Business Day, and
(ii) if such rate is not so published for any day, the Federal Funds Effective
Rate for such day shall be the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by it.
 
“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower.
 
“Finsub” shall mean a bankruptcy-remote entity that is a wholly-owned Subsidiary
of the Utility organized solely for the purpose of engaging in the Storm
Recovery Program and activities related thereto.
 
“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
 
“GAAP” means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public Accountants and in the statements and pronouncements of the
Financial Accounting Standards Board or in such other statement by such other
entity as may be approved by a significant segment of the accounting profession,
which are applicable to the circumstances as of the date of determination,
consistently applied.
 
“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, commission, exchange, association, board, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
 
“Granting Lender” has the meaning assigned to such term in Section 10.4(g).
 
“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether
 
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directly or indirectly, and including any obligation of the guarantor, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation or to purchase (or to advance
or supply funds for the purchase of) any security for the payment thereof, (ii)
to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness or other obligation of the payment
thereof, (iii) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor as to enable
the primary obligor to pay such Indebtedness or other obligation or (iv) as an
account party in respect of any letter of credit or letter of guaranty issued to
support such Indebtedness or obligation, provided that the term “Guarantee”
shall not include endorsements for collection or deposit in the ordinary course
of business.  The term “Guaranteed” has a meaning correlative thereto.  The
amount of any Guarantee of a Person shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Guarantee is made (or, if less, the maximum amount of such primary obligation
for which such Person may be liable pursuant to the terms of the instrument
evidencing such Guarantee) or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by such Person
in good faith, provided that, notwithstanding anything in this definition to the
contrary, the amount of any Guarantee of a Person in respect of any Permitted
Hedge Agreement by any other Person with a counterparty shall be deemed to be
the maximum reasonably anticipated liability of such other Person, as determined
in good faith by such Person, net of any obligation or liability of such
counterparty in respect of any Permitted Hedge Agreement with such Person,
provided further that the obligations of such other Person under such Permitted
Hedge Agreement with such counterparty shall be terminable at the election of
such other Person in the event of a default by such counterparty in its
obligations to such other Person.
 
“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.
 
“Hedging Agreement” means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price swap, cap, collar, hedging
or other like arrangement.
 
“Indebtedness” means as to any Person, at a particular time, all items which
constitute, without duplication, (i) Indebtedness for Borrowed Money or the
deferred purchase price of property (excluding trade payables incurred in the
ordinary course of business and excluding any such obligations payable solely
through the issuance of Equity Interests (other than the Disqualified Stock and
Equity Interests convertible into Disqualified Stock)), (ii) indebtedness
evidenced by notes, bonds, debentures or similar instruments, (iii) obligations
with respect to any conditional sale or title retention agreement, (iv)
indebtedness arising under acceptance facilities and the amount available to be
drawn under all letters of credit issued for the account of such Person and,
without duplication, all drafts drawn thereunder to the extent such Person shall
not have reimbursed the issuer in respect of the issuer’s payment of such
drafts, (v) all liabilities secured by any Lien on any property owned by such
Person even though such Person has not assumed or otherwise become liable for
the payment thereof (other than carriers’, warehousemen’s, mechanics’,
repairmen’s or other like non consensual statutory Liens arising in the ordinary
course of business; provided that the amount of such liabilities included for
purposes of this definition will be the amount equal to the lesser of the fair
market value of such property and the amount of the liabilities so secured),
(vi) without duplication, indebtedness in respect of Disqualified Stock valued
at the greater of its voluntary or involuntary maximum fixed repurchase price
plus accrued dividends liabilities and indebtedness in respect of any obligation
(contingent or
 
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otherwise) to purchase, redeem, retire, acquire or make any other payment in
respect of any shares of equity securities or any option, warrant or other right
to acquire any shares of equity securities, (vii) obligations under Capital
Lease Obligations, (viii) Guarantees of such Person in respect of Indebtedness
of others, and (ix) to the extent not otherwise included, all net obligations of
such Person under Permitted Hedge Agreements.
 
“Indebtedness for Borrowed Money” means, as to any Person, at a particular time,
all items which constitute, without duplication, (i) indebtedness for borrowed
money, (ii) indebtedness evidenced by notes, bonds, debentures or similar
instruments and (iii) any other Indebtedness, the incurrence of which results in
cash being received by such Person.
 
“Indemnitee” has the meaning assigned to such term in Section 10.3(b).
 
“Indenture” means the Indenture, dated as of May 1, 2000, between the Borrower
and Bank One, NA, as trustee.
 
“Initial Borrowing Request” means the Initial Borrowing Request, substantially
in the form of Exhibit C, or in such other form as shall be acceptable to the
Administrative Agent.
 
“Information” has the meaning assigned to such term in Section 10.15.
 
“Innovations” means Cleco Innovations LLC, a Louisiana limited liability company
and a direct wholly-owned Subsidiary.
 
“Integrated Resources Plan” means the portions of the Utility’s strategic
integrated resources plan which involves replacing, repowering or adding
electric power generation, transmission or distribution facilities to meet the
measured and forecasted demand and consumption requirements of its customers,
including the acquisition, construction or improvement of generation facilities
and fuel conversion repowering projects for existing generation facilities to
diversify fuel sources, with any project undertaken to implement the foregoing
being subject to regulation by the LPSC by prior issuance of a certificate of
public convenience and necessity or in a ratemaking proceeding, prudence review
or a combination thereof.
 
“Intellectual Property” means all copyrights, trademarks, servicemarks, patents,
trade names and service names.
 
“Inter-Affiliate Policies Agreement” means the Affiliate Policies of Cleco
Corporation dated effective December 18, 2000, as last updated September 12,
2006, and the Affiliate Procedures of Cleco Corporation dated effective December
21, 2009.
 
“Interest Coverage Ratio” means as of any fiscal quarter end, the ratio of (i)
EBITDA for the period of the four consecutive fiscal quarters ending thereon to
(ii) Interest Expense for such period.
 
“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 3.2.
 
“Interest Expense” means for any period, the interest expense, both expensed and
capitalized (including the interest component in respect of Capital Lease
Obligations), of the Borrower and its Subsidiaries during such period,
determined on a consolidated basis in accordance with GAAP.  
 
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Regardless of whether or not the Storm Recovery Bonds or other obligations of
the Borrower or any Subsidiary (including Finsub) in respect of the Storm
Recovery Program constitutes Indebtedness under GAAP, the Indebtedness and other
liabilities of Finsub in respect of the Storm Recovery Bonds and any credit
enhancement with respect thereto shall be taken into account in calculating
Interest Expense.
 
“Interest Payment Date” means (i) with respect to any ABR Loan, the last day of
each March, June, September and December, (ii) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Eurodollar Loan is a part and, in the case of a Eurodollar Loan with an
Interest Period of more than three months’ duration, each day prior to the last
day of such Interest Period that occurs at intervals of three months’ duration
after the first day of such Interest Period and (iii) with respect to all Loans,
the Maturity Date.
 
“Interest Period” means, with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect, provided that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day, unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day, and (ii) any Interest
Period that commences on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the last calendar month
of such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period.  For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall
be the effective date of the most recent conversion or continuation of such
Borrowing.
 
“Investment Fund” means USB NMTC Fund 2008-1 LLC, a Delaware limited liability
company and a direct Subsidiary.
 
“JPMCB” means JPMorgan Chase Bank, N.A.
 
“Lenders” means the Persons listed on Schedule 2.1 and any other Person that
shall have become a party hereto pursuant to an Assignment and Assumption, other
than any such Person that ceases to be a party hereto pursuant to an Assignment
and Assumption.
 
“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on the Reuters Screen LIBOR01 Page (or on any
successor or substitute page of such service, or any successor to or substitute
for such service, providing rate quotations comparable to those currently
provided on such page of such service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, as the rate for dollar deposits with a maturity comparable to
such Interest Period.  In the event that such rate does not appear on the
Reuters Screen LIBOR01 Page (or on any such successor or substitute page, or any
successor to or substitute for such service) at such time for any reason, then
the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest
Period shall be the rate of interest per annum, as reported by JPMCB to the
Administrative Agent, quoted by JPMCB to leading banks in the interbank
eurodollar market as the rate at which JPMCB is offering Dollar deposits in an
amount equal approximately to the Eurodollar Loan of JPMCB to which such
Interest Period shall apply for a period
 
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equal to such Interest Period, as quoted at approximately 11:00 a.m. two
Business Days prior to the first day of such Interest Period.
 
 “Lien” means, with respect to any asset, (i) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (ii) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(iii) in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.
 
“Loan” means a loan referred to in Section 2.1(a) and made pursuant to Section
2.4.
 
“Loan Documents” means this Loan Agreement and the Notes.
 
“LPSC” means the Louisiana Public Service Commission or any Governmental
Authority succeeding to the functions thereof.
 
“Margin Stock” has the meaning assigned to such term in Regulation U.
 
“Material Adverse Change” means a material adverse change in (i) the financial
condition, operations, business, prospects or property of (a) the Borrower or
(b) the Borrower and the Restricted Subsidiaries, taken as a whole, (ii) the
ability of the Borrower to perform its obligations under the Loan Documents or
(iii) the ability of the Credit Parties to enforce their rights and remedies
under the Loan Documents.
 
“Material Adverse Effect” means a material adverse effect on (i) the financial
condition, operations, business, prospects or property of (a) the Borrower or
(b) the Borrower and the Restricted Subsidiaries, taken as a whole, (ii) the
ability of the Borrower to perform its obligations under the Loan Documents or
(iii) the ability of the Credit Parties to enforce their rights and remedies
under the Loan Documents.
 
“Material Obligations” means, collectively, as of any date, (i) the Indebtedness
under the Revolving Credit Agreement and (ii) other Indebtedness (other than
Indebtedness under the Loan Documents) or operating leases of any one or more of
the Borrower or any Restricted Subsidiary or, in the case of the Borrower only,
any Guarantee, in an aggregate principal amount exceeding $20,000,000.  For
purposes of determining Material Obligations, the “principal amount” of
Indebtedness, operating leases or Guarantees at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that the Borrower or
such Restricted Subsidiary, as applicable, would be required to pay if such
Indebtedness, operating leases or Guarantees became due and payable on such day.
 
“Material Total Assets” means as of any date of determination, the total assets
of the Borrower and the Restricted Subsidiaries, determined on a consolidated
basis in accordance with GAAP.
 
“Maturity Date” means February 19, 2011.
 
“Midstream” means Cleco Midstream Resources LLC, a Louisiana limited liability
company and a direct wholly-owned Subsidiary.
 
“Moody’s” means Moody’s Investors Service, Inc., or any successor thereto.
 
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“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.
 
“Notes” means, with respect to each Lender, a promissory note evidencing such
Lender’s Loans payable to the order of such Lender (or, if required by such
Lender, to such Lender and its registered assigns) substantially in the form of
Exhibit D.
 
“Obligations” means (i) the due and punctual payment of (a) principal of and
premium, if any, and interest (including interest accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) on the Loans,
when and as due, whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise, and (b) all other monetary obligations,
including reimbursement obligations in respect of fees, commissions, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), of the Borrower to the Secured
Parties, or that are otherwise payable to any Credit Party, in each case under
the Loan Documents and (ii) the due and punctual performance of all covenants,
agreements, obligations and liabilities of the Borrower under or pursuant to the
Loan Documents.
 
“Other Taxes” means any and all current or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, the Loan Documents.
 
“Participant” has the meaning assigned to such term in Section 10.4(d).
 
“Patriot Act” has the meaning assigned to such term in Section 10.15.
 
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA.
 
“Permitted Encumbrances” means:
 
(a) Liens imposed by law for taxes, assessments or similar charges incurred in
the ordinary course of business that are not yet due or are being contested in
compliance with Section 6.4, provided that enforcement of such Liens is stayed
pending such contest;
 
(b) landlords’, vendors’, carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not delinquent or are being
contested in compliance with Section 6.6, provided that enforcement of such
Liens is stayed pending such contest;
 
(c) pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security
laws or regulations (but not ERISA);
 
(d) pledges and deposits to secure the performance of bids, trade contracts
(other than contracts for the payment of money), leases, purchase agreements to
the extent that the related purchase is permitted by Section 7.3, statutory
obligations, surety and appeal bonds,
 
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performance bonds and other obligations of a like nature, in each case in the
ordinary course of business;
 
(e) judgment liens in respect of judgments that do not constitute an Event of
Default under clause (j) of Article 8;
 
(f) easements, zoning restrictions, rights of way, minor defects, irregularities
and other similar encumbrances on real property imposed by law or arising in the
ordinary course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or materially
interfere with the ordinary conduct of business of the Borrower and the
Restricted Subsidiaries, as the case may be;
 
(g) Liens in favor of a financial institution encumbering deposits (including
the right of set-off) held by such financial institution in the ordinary course
of its commercial business and which are within the general parameters customary
in the banking industry; and
 
(h) Liens on Margin Stock to the extent that a prohibition on such Liens would
violate Regulation U;
 
(i) leases or subleases granted to others that do not materially interfere with
the ordinary conduct of business of the Borrower and the Restricted
Subsidiaries;
 
(j) licenses of Intellectual Property granted by the Borrower or any Restricted
Subsidiary in the ordinary course of business and not materially interfering
with the ordinary conduct of the business of the Borrower and the Restricted
Subsidiaries; and
 
(k) Liens in favor of customs and revenue authorities arising as a matter of law
to secure payment of custom duties in connection with the importation of goods.
 
“Permitted Hedge Agreement” means a transaction in futures, forwards, swaps,
options or other similar contracts (including both physical and financial
settlement transactions), engaged in by a Person as part of its normal business
operation with the purpose and effect of fixing prices as a risk management
strategy or hedge against adverse changes in the prices of electricity, gas or
fuel or interest rates (including commodity price hedges, swaps, caps, floors,
collars and similar agreements designed to protect such Person against
fluctuation in commodity prices or any option with respect to any such
transaction), and not for purposes of speculation and not intended primarily as
a borrowing of funds.
 
“Permitted Investments” means:
 
(a) debt obligations maturing within one year from the date of acquisition
thereof to the extent the principal thereof and interest thereon is backed by
the full faith and credit of the United States of America;
 
(b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable either from S&P or from Moody’s;
 
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(c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the United States of America or any State thereof that has a combined capital
and surplus and undivided profits of not less than $500,000,000 or, to the
extent not otherwise included, any Lender;
 
(d) fully collateralized repurchase agreements with a term of not more than 30
days for securities described in clause (a) of this definition and entered into
with a financial institution satisfying the criteria described in clause (c) of
this definition;
 
(e) auction rate securities subject to a “dutch auction” process within 90 days
or less, provided that such auction rate securities have a AAA rating or the
Moody’s equivalent, in each case, at the time of acquisition;
 
(f) money market mutual funds, 90% of the investments of which are in cash or
investments contemplated by clauses (a), (b) and (c) of this definition;
 
(g) investments consisting of Equity Interests and other non-cash consideration
received as consideration for an Asset Sale permitted by Section 7.3;
 
(h) investments in any Equity Interests of customers received pursuant to any
plan of reorganization or similar arrangement upon the bankruptcy or insolvency
of such customer or in satisfaction or partial satisfaction in settlement of
delinquent or overdue accounts in the ordinary course of business from
financially troubled customers;
 
(i) subject to the provisions of Section 6.12, loans and advances to employees
of the Borrower and its Subsidiaries made in the ordinary course of business in
an aggregate principal amount not to exceed $2,000,000 in the aggregate at any
one time;
 
(j) investments consisting of prepaid expenses or deposits, prepayments and
other credits to suppliers made in the ordinary course of business; and
 
(k) investments in and to any Person which is not a Subsidiary, provided that
the aggregate amount of investments made in such non-Subsidiaries after the
Closing Date shall not exceed $1,000,000 during the entire term of this Loan
Agreement.
 
“Perryville Partners” means Perryville Energy Partners, L.L.C., a Delaware
limited liability company and a direct wholly-owned Subsidiary.
 
“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
 
“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower, any Subsidiary or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.
 
“Platform” has the meaning assigned to such term in Section 6.2.
 
 
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“Power Block One” means the power block at the Acadia Facility being transferred
to the Utility in the Acadia Transactions.
 
“Power Block Two” means the power block at the Acadia Facility being sold to ELL
in the ELL Transaction.
 
“Pricing Level” means Pricing Level I, Pricing Level II or Pricing Level III, as
the context may require.
 
“Pricing Level I” means  any time when (i) no Event of Default has occurred and
is continuing, (ii) the Senior Debt Rating is A- or higher by S&P or A3 or
higher by Moody’s.
 
“Pricing Level II” means any time when (i) no Event of Default has occurred and
is continuing, (ii) the Senior Debt Rating is BBB- or higher by S&P or Baa3 or
higher by Moody’s and (iii) Pricing Level I does not apply.
 
“Pricing Level III” means any time when none of Pricing Levels I and II is
applicable.
 
“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMCB as its prime commercial lending rate at its principal office in
New York City; each change in the Prime Rate being effective from and including
the date such change is publicly announced as being effective. The Prime Rate is
not intended to be lowest rate of interest charged by JPMCB in connection with
extensions of credit to borrowers.
 
“Properties” has the meaning assigned to such term in Section 4.6.
 
“Public Lender” has the meaning assigned to such term in Section 6.2.
 
“Register” has the meaning assigned to such term in Section 10.4(c).
 
“Regulation D” means Regulation D of the Board as from time to time in effect
and all official rulings and interpretations thereunder or thereof.
 
“Regulation T” means Regulation T of the Board as from time to time in effect
and all official rulings and interpretations thereunder or thereof.
 
“Regulation U” means Regulation U of the Board as from time to time in effect
and all official rulings and interpretations thereunder or thereof.
 
“Regulation X” means Regulation X of the Board as from time to time in effect
and all official rulings and interpretations thereunder or thereof.
 
“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.
 
“Remedial Action” means (a) “remedial action” as such term is defined in CERCLA,
42 U.S.C. Section 9601(24), and (b) all other actions required by any
Governmental Authority or voluntarily undertaken to: (i) clean up, remove,
treat, abate or in any other way address any Hazardous Material in the
environment; (ii) prevent the Release or threat of Release, or minimize the
further
 
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Release of any Hazardous Material so it does not migrate or endanger or threaten
to endanger public health, welfare or the environment; or (iii) perform studies
and investigations in connection with, or as a precondition to, (i) or (ii)
above.
 
“Required Lenders” means, at any time, Lenders having outstanding Loans
representing at least 51% of the aggregate outstanding principal amount of all
Loans at such time.
 
“Restricted Payment” means, as to any Person, (i) any dividend or other
distribution by such Person (whether in cash, securities or other property) with
respect to any Equity Interests of such Person, (ii) any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such Equity Interest, and (iii) any payment
of principal or interest or any purchase, redemption, retirement, acquisition or
defeasance with respect to any Indebtedness of such Person which is subordinated
to the payment of the Obligations.
 
“Restricted Subsidiary” means each Subsidiary of the Borrower other than an
Unrestricted Subsidiary.
 
“Revolving Credit Agreement” means the First Amended and Restated Credit
Agreement, dated as of June 2, 2006, by and among the Borrower, the lenders
party thereto and The Bank of New York, as administrative agent, as amended,
restated, supplemented, or otherwise modified from time to time.
 
“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw Hill
Companies, or any successor thereto.
 
“SEC” means the Securities and Exchange Commission or any Governmental Authority
succeeding to the functions thereof.
 
“Senior Debt Rating” means at any date, the credit rating identified by S&P or
Moody’s as the credit rating which (i) it has assigned to long term unsecured
senior debt of the Borrower or (ii) would assign to long term unsecured senior
debt of the Borrower were the Borrower to issue or have outstanding any long
term unsecured senior debt on such date.  If either (but not both) Moody’s or
S&P shall cease to be in the business of rating corporate debt obligations, the
Pricing Levels shall be determined on the basis of the ratings provided by the
other rating agency.
 
“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages, if any, (including
any marginal, special, emergency or supplemental reserves) expressed as a
decimal established by the Board to which member banks of the United States
Federal Reserve System in New York City with deposits exceeding $250,000,000)
are subject for eurocurrency funding (currently referred to as “Eurocurrency
liabilities” in Regulation D). Such reserve percentages shall include those
imposed pursuant to Regulation D.  Eurodollar Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under Regulation D or any comparable
regulation.  The Statutory Reserve Rate shall be adjusted automatically on and
as of the effective date of any change in any reserve percentage.
 
“Storm Recovery Act” means the Louisiana Electric Utility Storm Recovery
Securitization Act.
 
 
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“Storm Recovery Activity” means any activity or activities by or on behalf of
the Utility in connection with the restoration of service associated with
electric power outages affecting  the Utility’s customers as the result of a
storm or storms, including mobilization, staging, and construction,
reconstruction, replacement, or repair of electric generation, transmission, or
distribution facilities.
 
“Storm Recovery Asset Sale” means any sale, transfer or other disposition by the
Utility to Finsub of Storm Recovery Property pursuant to a Storm Recovery
Financing Order.
 
“Storm Recovery Bonds” means bonds, debentures, notes, certificates of
participation, certificates of ownership, or other evidences of Indebtedness or
ownership that are issued by Finsub pursuant to an indenture, contract, or other
agreement pursuant to a Storm Recovery Financing Order, the proceeds of which
are used directly or indirectly to provide, recover, finance, or refinance
LPSC-approved Storm Recovery Costs, Storm Recovery Financing Costs and costs to
replenish or fund a Storm Recovery Reserve to such level as the LPSC may
authorize in the applicable Storm Recovery Financing Order, and which are
secured by or payable from Storm Recovery Property.
 
“Storm Recovery Charges” means the amounts authorized by the LPSC to recover,
finance or refinance Storm Recovery Costs, Storm Recovery Financing Costs, and
costs to replenish or fund a Storm Recovery Reserve to such level as the LPSC
may authorize in a Storm Recovery Financing Order.
 
“Storm Recovery Costs” means, as approved by the LPSC, costs incurred or to be
incurred by the Utility in undertaking a Storm Recovery Activity.
 
“Storm Recovery Financing Costs” means, collectively, (i) interest and
acquisition, defeasance, or redemption premiums that are payable on Storm
Recovery Bonds, (ii) any payment required under an ancillary agreement and any
amount required to fund or replenish reserve or other accounts established under
the terms of any indenture, ancillary agreement, or other financing documents
pertaining to Storm Recovery Bonds, (iii) any other cost related to issuing,
supporting, repaying, and servicing Storm Recovery Bonds, including servicing
fees, accounting and auditing fees, trustee fees, legal fees, consulting fees,
administrative fees, placement and underwriting fees, capitalized interest,
rating agency fees, stock exchange listing and compliance fees, and filing fees,
including costs related to obtaining the Storm Recovery Financing Order; (iv)
any income taxes and license fees imposed on the revenues generated from the
collection of Storm Recovery Charges or otherwise resulting from the collection
of Storm Recovery Charges, in any such case whether paid, payable, or accrued,
and (v) any state and local taxes, franchise, gross receipts, and other taxes or
similar charges including but not limited to regulatory assessment fees, in any
such case whether paid, payable, or accrued.
 
“Storm Recovery Financing Order” means an order of the LPSC which allows for (i)
the issuance by Finsub of Storm Recovery Bonds, (ii) the imposition, collection,
and periodic adjustments of Storm Recovery Charges by the Utility, (iii) the
creation of Storm Recovery Property, (iv) the sale, assignment, or transfer of
Storm Recovery Property by the Utility to Finsub.
 
“Storm Recovery Program” means the sale of, or transfer of interests in, Storm
Recovery Property by the Utility to Finsub in exchange for consideration equal
to the fair market value of such Storm Recovery Property (i.e., a “true sale”)
and the issuance of Storm Recovery Bonds by Finsub.
 
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“Storm Recovery Program Documentation” means all written agreements that may
from time to time be entered into by the Utility and/or Finsub in connection
with any Storm Recovery Program.
 
“Storm Recovery Property” means the contract right constituting incorporeal
movable property newly created pursuant to the Storm Recovery Act which may
consist of any of (i) all rights and interests of the Utility or Finsub under a
Storm Recovery Financing Order, including the right to impose, bill, charge,
collect, and receive Storm Recovery Charges authorized in such Storm Recovery
Financing Order and to obtain periodic adjustments to such charges as may be
provided in such Storm Recovery Financing Order, (ii) all revenues, collections,
claims, rights to payments, payments, money, or proceeds arising from the rights
and interests specified in clause (i) above, regardless of whether such
revenues, collections, claims, rights to payment, payments, money, or proceeds
are imposed, billed, received, collected, or maintained together with or
commingled with other revenues, collections, rights to payment, payments, money,
or proceeds.
 
“Storm Recovery Reserve” means a storm reserve or such other similar reserve
established by the Utility pursuant to order or rule of the LPSC.
 
“subsidiary” means, as to any Person, any corporation, association, partnership,
limited liability company, joint venture or other business entity of which such
Person or any Subsidiary of such Person, directly or indirectly, either (i) in
respect of a corporation, owns or controls more than 50% of the outstanding
Equity Interests having ordinary voting power to elect a majority of the board
of directors or similar managing body, irrespective of whether a class or
classes shall or might have voting power by reason of the happening of any
contingency, or (ii) in respect of an association, partnership, joint venture or
other business entity, is entitled to share in more than 50% of the profits and
losses, however determined.  Unless the context otherwise requires, references
to a Subsidiary shall be deemed to be references to a Subsidiary of the
Borrower.
 
“Syndication Agent” means Credit Agricole Corporate and Investment Bank in its
capacity as syndication agent for the Lenders hereunder.
 
“Tax” means any present or future tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature, and whatever called, by a Governmental
Authority, on whomsoever and wherever imposed, levied, collected, withheld or
assessed.
 
“Tax on the Overall Net Income” means, as to any Person, a Tax imposed by the
jurisdiction in which that Person’s principal office (and/or, in the case of a
Lender, its lending office in the United States of America designated in its
Administrative Questionnaire or such other office as such Lender may designate
in writing to the Administrative Agent and the Borrower) is located, or by any
political subdivision or taxing authority thereof, or in which that Person is
deemed to be doing business, on all or part of the net income, profits or gains
of that Person (whether worldwide, or only insofar as such income, profits or
gains are considered to arise in or to relate to a particular jurisdiction, or
otherwise).
 
“Total Capitalization” means, at any time, the difference between (i) the sum of
each of the following at such time with respect to the Borrower and the
Subsidiaries, determined on a consolidated basis in accordance with GAAP: (a)
preferred Equity Interests (less deferred compensation relating to unallocated
convertible preferred Equity Interests held by the Employee Stock Ownership
Plan), plus (b) common Equity Interests and any premium on Equity Interests
thereon (as such term is used in the Financial Statements), excluding
accumulated other
 
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comprehensive income or loss, plus (c) retained earnings, plus (d) Total
Indebtedness, and (ii) treasury stock at such time of the Borrower and the
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
 
“Total Indebtedness” means at any time, all Indebtedness (net of unamortized
premium and discount (as such term is used in the Financial Statements)) at such
time of the Borrower and the Subsidiaries, determined on a consolidated basis in
accordance with GAAP.  Regardless of whether or not the Storm Recovery Bonds or
other obligations of the Borrower or any Subsidiary (including Finsub) in
respect of the Storm Recovery Program constitutes Indebtedness under GAAP, the
Indebtedness and other liabilities of Finsub in respect of the Storm Recovery
Bonds and any credit enhancement with respect thereto shall be taken into
account in calculating Total Indebtedness.
 
“Transactions” means (i) the execution, delivery and performance by the Borrower
of each Loan Document to which it is a party, (ii) the borrowing of the Loans,
and (iii) the use of the proceeds of the Loans.
 
“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to (i) the Adjusted LIBO Rate or (ii) the Alternate Base
Rate.
 
“Unconsolidated Person” means any Subsidiary, joint venture or other Person that
operates a power plant or similar project in which the Borrower or any
Subsidiary invests or has invested and which, pursuant to GAAP as in effect on
such date, would not be consolidated with the Borrower for financial reporting
purposes immediately after giving effect to such investment.
 
“Unrestricted Subsidiaries” means collectively, (i) Midstream, (ii) Cleco
Support, (iii) Perryville Partners, (iv) Attala Transmission, (v) Investment
Fund, (vi) Innovations, (vii) prior to the ELL Transaction Date and
notwithstanding the fact that Acadia Holdings’ equity interest in Acadia Power
is not in excess of 50%, Acadia Power, (viii) prior to the Cajun Transaction
Date and only during the period which Acadia Holdings owns any Equity Interests
in Cajun, Cajun, (ix) each of their respective subsidiaries and (x) any future
established or acquired Subsidiary (other than the Utility and the Utility
Subsidiaries).
 
“Utility” means Cleco Power LLC, a Louisiana limited liability company,
successor by merger to Cleco Utility Group Inc., a Louisiana corporation.
 
“Utility Credit Agreement” means the First Amended and Restated Credit
Agreement, dated as of June 2, 2006, by and among the Utility, the lenders party
thereto and The Bank of New York, as administrative agent thereunder, as
amended, restated, supplemented, or otherwise modified from time to time.
 
“Utility Loan Agreement” means the Loan Agreement, dated as of August 19, 2009,
by and among the Utility, the lenders party thereto and JPMCB, as administrative
agent thereunder, as amended, restated, supplemented, or otherwise modified from
time to time.
 
“Utility Financial Statements” has the meaning assigned to such term in Section
4.4(a).
 
“Utility Indenture” means the Indenture, dated as of October 1, 1988, between
the Borrower and The Bank of New York Trust Company, N.A., as trustee.
 
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“Utility Mortgage” means the Indenture of Mortgage, dated as of July 1, 1950,
made by the Utility to Bank One Trust Company, NA, as Trustee.
 
“Utility Subsidiaries” means collectively, the subsidiaries of the Utility,
each, a “Utility Subsidiary”.
 
“Voting Security” means a security which ordinarily has voting power for the
election of the board of directors (or other governing body), whether at all
times or only so long as no senior class of Equity Interests has such voting
power by reason of any contingency.
 
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
 
Section 1.2 Classification of Loans and Borrowings. For purposes of this Loan
Agreement, (i) Loans may be classified and referred to by Type (e.g., a
“Eurodollar Loan”) and (ii)  Borrowings may also be classified and referred to
by Type (e.g., a “Eurodollar Borrowing”).
 
Section 1.3 Terms Generally. The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words “include”, “includes” and “including” shall be deemed to
be followed by the phrase “without limitation”. The word “will” shall be
construed to have the same meaning and effect as the word “shall”. Unless the
context requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified, (ii) any definition of or reference to any
law shall be construed as referring to such law as from time to time amended and
any successor thereto and the rules and regulations promulgated from time to
time thereunder, (iii) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (iv) the words “herein”, “hereof”
and “hereunder”, and words of similar import, shall be construed to refer to
this Loan Agreement in its entirety and not to any particular provision hereof,
(v) all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Loan Agreement, and (vi) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
 
Section 1.4 Accounting Terms; GAAP. Except as otherwise expressly provided
herein, as used in the Loan Documents and in any certificate, opinion or other
document made or delivered pursuant thereto, accounting terms not defined in
Section 1.1, and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP.  If at
any time any change in GAAP would affect the computation of any financial
requirement set forth in this Loan Agreement, the Administrative Agent, the
Lenders and the Borrower shall negotiate in good faith to amend such requirement
to reflect such change in GAAP (subject to the approval of the Required
Lenders), provided that, until so amended, (i) such requirement shall continue
to be computed in accordance with GAAP prior to such change therein and (ii) the
Borrower shall provide to the Credit Parties financial statements and other
documents required under this Loan Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such
requirement made before and after giving effect to such change in GAAP.  Except
as otherwise expressly provided herein, the computation of financial ratios and
requirements set forth in this Loan Agreement shall be consistent with the
Borrower’s financial statements required to be delivered
 
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hereunder.  Notwithstanding any other provision contained herein, all terms of
an accounting or financial nature used herein shall be construed, and all
computations of amounts and ratios referred to herein shall be made, without
giving effect to any election under Accounting Standards Codification 825-10-25
(previously referred to as Statement of Financial Accounting Standards 159) (or
any other Accounting Standards Codification or Financial Accounting Standard
having a similar result or effect) to value any Indebtedness or other
liabilities of the Borrower or any of its Subsidiaries at “fair value”, as
defined therein.
 
Section 1.5 Rounding. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
 
 
ARTICLE 2.
 
THE CREDITS
 

Section 2.1 Commitments.  Subject to the terms and conditions hereof, each
Lender agrees to make Loans to the Borrower in dollars on the Effective Date in
an aggregate principal amount that will not result in the principal amount of
such Lender’s Loans exceeding such Lender’s Commitment.  No amount of the Loans
may be reborrowed after repayment.
 
Section 2.2 Loans and Borrowings.
 
(a) Each Loan shall be made as part of a Borrowing consisting of Loans made by
the Lenders ratably in accordance with their respective Commitments.  The
failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder, provided that the
Commitments of the Lenders are several, and no Lender shall be responsible for
any other Lender’s failure to make Loans as required.
 
(b) Subject to Section 3.4, each Borrowing shall be comprised entirely of ABR
Loans or Eurodollar Loans, as applicable, in each case as the Borrower may
request in accordance herewith. Each Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan, provided that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance with the
terms of this Loan Agreement.
 
(c) At the commencement of each Interest Period for any Eurodollar Borrowing,
such Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $5,000,000. At the time that each ABR Borrowing is
made, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $5,000,000.  Borrowings of more than
one Type may be outstanding at the same time, provided that there shall not at
any time be more than a total of five Eurodollar Borrowings outstanding.
 
(d) Notwithstanding any other provision of this Loan Agreement, the Borrower
shall not be entitled to request any Loans other than the initial Loans on the
Effective Date and shall not be entitled to elect to convert or continue any
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.
 
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Section 2.3 Requests for Borrowings on the Effective Date.
 
(a) The Borrower shall deliver the Initial Borrowing Request to the
Administrative Agent by hand or facsimile (or transmit by electronic
communication, if arrangements for doing so have been approved by the
Administrative Agent) or notify the Administrative Agent by telephone, in each
case to be promptly confirmed by the delivery to the Administrative Agent of a
signed Initial Borrowing Request (i) in the case of a Eurodollar Borrowing, not
later than 11:30 a.m., New York City time, three Business Days before the
Effective Date (with customary indemnities and other provisions acceptable to
the Administrative Agent in the event such Borrowing shall not occur on the
Effective Date) or (ii) in the case of an ABR Borrowing, not later than 11:30
a.m., New York City time, on the Effective Date. The Initial Borrowing Request
(including such telephonic request) shall be irrevocable and shall specify the
following information in compliance with Section 2.2:
 
(i) the aggregate amount of the requested Borrowing;
 
(ii) the date of such Borrowing, which shall be a Business Day;
 
(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
 
(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”; and
 
(v) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.4.
 
(b) If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month’s duration. Promptly following
receipt of the Initial Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender’s Loan to be made as part of the requested Borrowing.
 
Section 2.4 Funding of Borrowings.

 
(a) Each Lender shall make the Loan to be made by it hereunder on the Effective
Date by wire transfer of immediately available funds by 2:00 p.m., New York City
time, to the account of the Administrative Agent most recently designated by it
for such purpose by notice to the Lenders. Subject to Section 5.2, the
Administrative Agent will make such Loans available to the Borrower by promptly
crediting or otherwise transferring the amounts so received, in like funds, to
an account of the Borrower maintained with the Administrative Agent and
designated by the Borrower in the Initial Borrowing Request.
 
(b) Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with Section 2.4(a) and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the
 
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Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation or (ii) in
the case of the Borrower, the interest rate that would be otherwise applicable
to such Borrowing. Such payment by the Borrower, however, shall be without
prejudice to its rights against such Lender.  If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender’s Loan
included in such Borrowing.
 
Section 2.5 Termination of Commitments.  The Commitments shall terminate on the
Effective Date upon the funding of the Loans in accordance with Section 5.1.
 
Section 2.6 Repayment of Loans; Evidence of Debt.
 
(a) The Borrower hereby unconditionally promises to pay to the Administrative
Agent for the account of each Lender the then unpaid principal amount of each
Loan on the Maturity Date.
 
(b) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the debt of the Borrower to such Lender resulting from
each Loan made by such Lender, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
 
(c) The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Type thereof and the Interest
Period, if any, applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof.
 
(d) The entries made in the accounts maintained pursuant to paragraphs (b) or
(c) of this Section shall, to the extent not inconsistent with any entries made
in the Notes, be prima facie evidence of the existence and amounts of the
obligations recorded therein, provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Loan Agreement.
 
(e) The Loans made by each Lender shall be evidenced by a Note payable to the
order of such Lender, substantially in the form of Exhibit D.
 
Section 2.7 Prepayment of Loans.
 
(a) Voluntary Prepayments. The Borrower shall have the right at any time and
from time to time to prepay any Borrowing in whole or in part, subject to the
requirements of this Section.
 
(b) Notice of Prepayment; Application of Prepayments. The Borrower shall notify
the Administrative Agent by telephone (confirmed by facsimile) of any prepayment
hereunder, (i) in the case of a prepayment of a Eurodollar Borrowing, not later
than 11:30 a.m., New York City
 
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time, three Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:30 a.m., New York City time,
on the date of the prepayment.  Each such notice shall be irrevocable and shall
specify the prepayment date and the principal amount of each Borrowing or
portion thereof to be prepaid.  Promptly following receipt of any such notice
relating to a Borrowing, the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial prepayment of any Borrowing under Section
2.7(a) shall be in an integral multiple of $1,000,000 and not less than
$5,000,000 (or, if the outstanding principal balance of the Loans is less than
such minimum amount, then such lesser outstanding principal balance, as the case
may be).  Each prepayment of a Borrowing pursuant to Section 2.7(a) shall be
applied to prepay the Loans ratably in accordance with the then outstanding
amounts thereof.  Prepayments shall be accompanied by (i) accrued interest to
the extent required by Section 3.1 and (ii) break funding payments pursuant to
Section 3.6.
 
Section 2.8 [Intentionally Omitted].
 
Section 2.9 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
 
(a) The Borrower shall make each payment required to be made by it hereunder or
under any other Loan Document (whether of principal of Loans, interest or fees,
or of amounts payable under Sections 3.5, 3.6, 3.7 or 10.3, or otherwise) prior
to 1:00 p.m., New York City time, on the date when due, in immediately available
funds, without set-off or counterclaim. Any amounts received after such time on
any date may, in the discretion of the Administrative Agent, be deemed to have
been received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
its office at 10 South Dearborn, Chicago, Illinois, or such other office as to
which the Administrative Agent may notify the other parties hereto, except that
payments pursuant to Sections 3.5, 3.6, 3.7 and 10.3 shall be made directly to
the Persons entitled thereto. The Administrative Agent shall distribute any such
payments received by it for the account of any other Person to the appropriate
recipient promptly following receipt thereof. If any payment hereunder shall be
due on a day that is not a Business Day, the date for payment shall be extended
to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments hereunder shall be made in dollars.
 
(b) Each Borrowing, each payment or prepayment of principal of any Borrowing,
each payment of interest on the Loans, each payment of fees and each conversion
of any Borrowing to or continuation of any Borrowing as a Borrowing of any Type
shall be allocated pro rata among the Lenders in accordance with their
respective applicable Commitments (or, if such Commitments shall have expired or
been terminated, in accordance with the respective principal amounts of their
outstanding Loans).  Each Lender agrees that in computing such Lender’s portion
of any Borrowing to be made hereunder, the Administrative Agent may, in its
discretion, round each Lender’s percentage of such Borrowing to the next higher
or lower whole dollar amount.  If at any time insufficient funds are received by
and available to the Administrative Agent to pay fully all amounts of principal
of Loans, interest, fees and commissions then due hereunder, such funds shall be
applied (i) first, towards payment of interest, fees and commissions then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest, fees and commissions then due to such parties and (ii)
second, towards payment of principal of Loans then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal of
Loans then due to such parties.
 
(c) If any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of, or interest on, any of
its Loans resulting in
 
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such Lender receiving payment of a greater proportion of the aggregate amount of
its Loans and accrued interest thereon than the proportion received by any other
Lender, then the Lender receiving such greater proportion shall purchase (for
cash at face value) participations in the Loans of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of, and
accrued interest on, their respective Loans, provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Loan Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.
 
(d) Unless the Administrative Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Administrative Agent for
the account of the applicable Credit Parties hereunder that the Borrower will
not make such payment, the Administrative Agent may assume that the Borrower has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to such Credit Parties the amount due. In such
event, if the Borrower has not in fact made such payment, then each such Credit
Party severally agrees to repay to the Administrative Agent forthwith on demand
the amount so distributed to such Credit Party with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.
 
(e) If any Credit Party shall fail to make any payment required to be made by it
pursuant to Section 2.4(b), then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Credit Party to
satisfy such Credit Party’s obligations under such Section until all such
unsatisfied obligations are fully paid.
 
Section 2.10 Defaulting Lenders.  Notwithstanding any provision of this Loan
Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the
Commitment and Credit Exposure of such Defaulting Lender shall not be included
in determining whether all Lenders or the Required Lenders have taken or may
take any action hereunder (including any consent to any amendment or waiver
pursuant to Section 10.2), provided that any waiver, amendment or modification
requiring the consent of all Lenders or each affected Lender which affects such
Defaulting Lender differently than other affected Lenders shall require the
consent of such Defaulting Lender; provided further, however, that no such
waiver, amendment or modification shall increase such Defaulting Lender’s
Commitment or reduce the principal amount of any Loan owing to such Defaulting
Lender or postpone the date of payment at stated maturity of any Loan owing to
such Defaulting Lender without the written consent of such Defaulting Lender.
 
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ARTICLE 3.
 
INTEREST, FEES, YIELD PROTECTION, ETC.
 

Section 3.1 Interest.
 
(a) The Loans comprising each ABR Borrowing shall bear interest at the Alternate
Base Rate plus the Applicable Margin. The Loans comprising each Eurodollar
Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period
in effect for such Borrowing plus the Applicable Margin.
 
(b) Notwithstanding the foregoing, if any principal of or interest on any Loan
or any fee or other amount payable by the Borrower hereunder is not paid when
due, whether at stated maturity, upon acceleration or otherwise, such overdue
amount shall bear interest, after as well as before judgment, at a rate per
annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraph of
this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Borrowings as provided in the preceding paragraph of this
Section.
 
(c) Accrued interest on each Loan shall be payable in arrears on each Interest
Payment Date for such Loan, provided that (i) interest accrued pursuant to
paragraph (b) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan, accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or
prepayment, and (iii) in the event of any conversion of any Eurodollar Loan
prior to the end of the current Interest Period therefor, accrued interest on
such Loan shall be payable on the effective date of such conversion.
 
(d) All interest hereunder shall be computed on the basis of a year of 360 days,
except that interest computed by reference to the Alternate Base Rate at times
when the Alternate Base Rate is based on the Prime Rate shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), and in each case shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate
or LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent clearly demonstrable error.  The
Administrative Agent shall, as soon as practicable, notify the Borrower and the
Lenders of the effective date and the amount of each such change in the Prime
Rate, but any failure to so notify shall not in any manner affect the obligation
of the Borrower to pay interest on the Loans in the amounts and on the dates
required.
 
Section 3.2 Interest Elections Relating to Borrowings.
 
(a) Each Borrowing initially shall be of the Type specified in the Initial
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in the Initial Borrowing Request.
Thereafter, the Borrower may elect to convert such Borrowing to a different Type
or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may
elect Interest Periods therefor, all as provided in this Section. The Borrower
may elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing.
 
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(b) To make an election pursuant to this Section, the Borrower shall deliver to
the Administrative Agent a signed Interest Election Request in a form approved
by the Administrative Agent (or notify the Administrative Agent by telephone, to
be promptly confirmed by delivery to the Administrative Agent of a signed
Interest Election Request) by the time that the Initial Borrowing Request would
be required under Section 2.3 if the Borrower were requesting a Borrowing of the
Type resulting from such election to be made on the effective date of such
election.
 
(c) Each such telephonic and written Interest Election Request shall be
irrevocable and shall specify the following information:
 
(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) of this
paragraph shall be specified for each resulting Borrowing);
 
(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;
 
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and
 
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period
to be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period”.
 
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.
 
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.
 
(e) If the Borrower fails to deliver a timely Interest Election Request prior to
the end of the Interest Period applicable thereto, then, unless such Borrowing
is repaid as provided herein, at the end of such Interest Period, such Borrowing
shall be converted to an ABR Borrowing. Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Borrower, then, so long as an Event of Default is continuing, (i) no outstanding
Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii)
unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing
at the end of the Interest Period applicable thereto.
 
Section 3.3 Fees.
 
(a) The Borrower agrees to pay to each Credit Party, for its own account, fees
and other amounts payable in the amounts and at the times separately agreed upon
in writing between the Borrower and such Credit Party.
 
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(b) All fees and other amounts payable hereunder shall be paid on the dates due,
in dollars and in immediately available funds. Fees and other amounts paid shall
not be refundable under any circumstances.
 
Section 3.4 Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:
 
(a) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such
Interest Period; or
 
(b) the Administrative Agent is advised by Required Lenders that the Adjusted
LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not
adequately and fairly reflect the cost of making or maintaining their Loans
included in such Borrowing for such Interest Period;
 
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone (confirmed by facsimile) or facsimile as promptly as
practicable thereafter and, until the Administrative Agent notifies the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any
Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall
be ineffective, and (ii) if the Initial Borrowing Request requests a Eurodollar
Borrowing, such Borrowing shall be made as an ABR Borrowing.
 
Section 3.5 Increased Costs; Illegality.
 
(a) If any Change in Law shall:
 
(i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Credit Party (except any such reserve requirement reflected in
the Adjusted LIBO Rate); or
 
(ii) impose on any Credit Party or the London interbank market any other
condition affecting this Loan Agreement, any Eurodollar Loans made by such
Credit Party;
 
and the result of any of the foregoing shall be to increase the cost to such
Credit Party of making or maintaining any Eurodollar Loan or to increase the
cost to such Credit Party or to reduce the amount of any sum received or
receivable by such Credit Party hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Credit Party such additional
amount or amounts as will compensate such Credit Party for such additional costs
incurred or reduction suffered.
 
(b) If any Credit Party determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Credit Party’s capital or on the capital of such Credit Party’s holding company,
if any, as a consequence of this Loan Agreement or the Loans made by such Credit
Party to a level below that which such Credit Party or such Credit Party’s
holding company could have achieved but for such Change in Law (taking into
consideration such Credit Party’s policies and the policies of such Credit
Party’s holding company with respect to capital adequacy), then from time to
time the Borrower will pay to such Credit Party
 
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such additional amount or amounts as will compensate such Credit Party or such
Credit Party’s holding company for any such reduction suffered.
 
(c) A certificate of a Credit Party setting forth the amount or amounts
necessary to compensate such Credit Party or its holding company, as applicable,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Credit Party the amount shown as due on any such certificate within 10 days
after receipt thereof.
 
(d) Failure or delay on the part of any Credit Party to demand compensation
pursuant to this Section shall not constitute a waiver of such Credit Party’s
right to demand such compensation; provided that the Borrower shall not be
required to compensate a Credit Party pursuant to this Section for any increased
costs or reductions incurred more than 90 days prior to the date that such
Credit Party notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Credit Party’s intention to claim
compensation therefor; and provided further that, if the Change in Law giving
rise to such increased costs or reductions is retroactive, then the 90 day
period referred to above shall be extended to include the period of retroactive
effect thereof.
 
(e) Notwithstanding any other provision of this Loan Agreement, if, after the
Closing Date, any Change in Law shall make it unlawful for any Lender to make or
maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written notice
to the Borrower and to the Administrative Agent:
 
(i) such Lender may declare that Eurodollar Loans will not thereafter (for the
duration of such unlawfulness) be made by such Lender hereunder (or be continued
for additional Interest Periods) and ABR Loans will not thereafter (for such
duration) be converted into Eurodollar Loans, whereupon any request for a
Eurodollar Borrowing or to convert an ABR Borrowing to a Eurodollar Borrowing or
to continue a Eurodollar Borrowing, as applicable, for an additional Interest
Period shall, as to such Lender only, be deemed a request for an ABR Loan (or a
request to continue an ABR Loan as such for an additional Interest Period or to
convert a Eurodollar Loan into an ABR Loan, as applicable), unless such
declaration shall be subsequently withdrawn; and
 
(ii) such Lender may require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall be
automatically converted to ABR Loans, as of the effective date of such notice as
provided in the last sentence of this paragraph.
 
In the event any Lender shall exercise its rights under clause (i) or (ii) of
this paragraph, all payments and prepayments of principal that would otherwise
have been applied to repay the Eurodollar Loans that would have been made by
such Lender or the converted Eurodollar Loans of such Lender shall instead be
applied to repay the ABR Loans made by such Lender in lieu of, or resulting from
the conversion of, such Eurodollar Loans, as applicable.  For purposes of this
paragraph, a notice to the Borrower by any Lender shall be effective as to each
Eurodollar Loan made by such Lender, if lawful, on the last day of the Interest
Period currently applicable to such Eurodollar Loan; in all other cases such
notice shall be effective on the date of receipt by the Borrower.
 
Section 3.6 Break Funding Payments. In the event of (a) the payment or
prepayment (voluntary or otherwise) of any principal of any Eurodollar Loan
other than on the last day of an Interest Period applicable thereto (including
as a result of an Event of Default), (b) the
 
 
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conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under Section
2.7(b) and is revoked in accordance therewith), or (d) the assignment of any
Eurodollar Loan other than on the last day of the Interest Period or maturity
date applicable thereto as a result of a request by the Borrower pursuant to
Section 3.8, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest that would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest that would accrue on
such principal amount for such period at the interest rate that such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.
 
Section 3.7 Taxes.
 
(a) Payments to be Free and Clear. Provided that all documentation, if any, then
required to be delivered by any Lender or the Administrative Agent pursuant to
Section 3.7(c) has been delivered, all sums payable by the Borrower under the
Loan Documents shall be paid free and clear of and (except to the extent
required by law) without any deduction or withholding on account of any Tax
(other than a Tax on the Overall Net Income of any Lender (for which payment
need not be free and clear, but no deduction or withholding shall be made unless
then required by applicable law)) imposed, levied, collected, withheld or
assessed by or within the United States or any political subdivision in or of
the United States or any other jurisdiction from or to which a payment is made
by or on behalf of the Borrower or by any federation or organization of which
the United States or any such jurisdiction is a member at the time of payment.
 
(b) Grossing up of Payments. If the Borrower or any other Person is required by
law to make any deduction or withholding on account of any such Tax from any sum
paid or payable by the Borrower to the Administrative Agent or any Lender under
any of the Loan Documents:
 
(i) the Borrower shall notify the Administrative Agent and such Lender of any
such requirement or any change in any such requirement as soon as the Borrower
becomes aware of it;
 
(ii) the Borrower shall pay any such Tax before the date on which penalties
attach thereto, such payment to be made (if the liability to pay is imposed on
the Borrower) for its own account or (if that liability is imposed on the
Administrative Agent or such Lender, as the case may be) on behalf of and in the
name of the Administrative Agent or such Lender, as the case may be;
 
(iii) the sum payable by the Borrower to the Administrative Agent or a Lender in
respect of which the relevant deduction, withholding or payment is required
shall be increased to the extent necessary to ensure that, after the making of
that deduction,
 

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withholding or payment, the Administrative Agent or such Lender, as the case may
be, receives on the due date therefor a net sum equal to what it would have
received had no such deduction, withholding or payment been required or made;
and
 
(iv) within 30 days after paying any sum from which it is required by law to
make any deduction or withholding, and within 30 days after the due date of
payment of any Tax which it is required by clause (ii) above to pay, the
Borrower shall deliver to the Administrative Agent and the applicable Lender
evidence satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the relevant
Governmental Authority;
 
(v) provided that no additional amount shall be required to be paid to any
Lender under clause (iii) above except to the extent that any change after the
Closing Date (in the case of each Lender listed on the signature pages hereof)
or after the date of the Assignment and Assumption pursuant to which such Lender
became a Lender (in the case of each other Lender) if any such requirement for a
deduction, withholding or payment as is mentioned therein shall result in an
increase in the rate of such deduction, withholding or payment from that in
effect at the date of this Agreement or at the date of such Assignment and
Assumption, as the case may be, in respect of payments to such Lender, and
provided further that any Lender claiming any additional amounts payable
pursuant to this Section 3.7 shall use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Applicable Lending Office or take other appropriate action
if the making of such a change or the taking of such action, as the case may be,
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender.
 
(c) Tax Certificates. Each Foreign Lender listed on the signature pages hereof
that has not done so on or before the Closing Date shall deliver to the Borrower
(with a copy to the Administrative Agent), on or prior to the Effective Date (in
the case of each Foreign Lender listed on the signature pages hereof) or on the
effective date of the Assignment and Assumption pursuant to which it becomes a
Lender (in the case of each other Foreign Lender), and at such other times as
may be necessary in the determination of the Borrower or the Administrative
Agent (each in the reasonable exercise of its discretion), including upon the
occurrence of any event requiring a change in the most recent counterpart of any
form set forth below previously delivered by such Foreign Lender to the
Borrower, such certificates, documents or other evidence, properly completed and
duly executed by such Foreign Lender (i) two accurate and complete original
signed copies of Internal Revenue Service Form W8-BEN or Form W8-ECI, or
successor applicable form and (ii) an Internal Revenue Service Form W-8 or W-9
(or any other certificate or statement of exemption required by Treasury
Regulations Section 1.1441 4(a) or Section 1.1441 6(c) or any successor thereto)
to establish that such Foreign Lender is not subject to deduction or withholding
of United States federal income tax under Section 1441 or 1442 of the Code or
otherwise (or under any comparable provisions of any successor statute) with
respect to any payments to such Foreign Lender of principal, interest, fees or
other amounts payable under any of the Loan Documents.  The Borrower shall not
be required to pay any additional amount to any such Foreign Lender under
Section 3.7(b)(iii) if such Foreign Lender shall have failed to satisfy the
requirements of the immediately preceding sentence; provided that if such
Foreign Lender shall have satisfied such requirements on the Effective Date (in
the case of each Foreign Lender listed on the signature pages hereof) or on the
effective date of the Assignment and Assumption pursuant to which it becomes a
Lender (in the case of each other Foreign Lender), nothing in this Section shall
relieve the Borrower of its obligation to pay any additional amounts pursuant to
 
 

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Section 3.7(b)(iii) in the event that, as a result of any change in applicable
law, such Foreign Lender is no longer properly entitled to deliver certificates,
documents or other evidence at a subsequent date establishing the fact that such
Foreign Lender is not subject to withholding as described in the immediately
preceding sentence.
 
Section 3.8 Mitigation Obligations.  In the event that (i) the Borrower becomes
obligated to pay additional amounts to any Lender pursuant to Section 3.5,
Section 3.6 or Section 3.7, or (ii) any Lender becomes a Defaulting Lender, the
Borrower may, within 60 days of the demand by such Lender for such additional
amounts or the relevant default by such Lender, as the case may be, and subject
to and in accordance with the provisions of Section 10.4, designate an Eligible
Assignee (acceptable to the Administrative Agent) to purchase and assume all its
interests, rights and obligations under the Loan Documents, without recourse to
or warranty by or expense to, such Lender, for a purchase price equal to the
outstanding principal amount of such Lender’s Loans plus any accrued but unpaid
interest thereon and any other amounts payable to such Lender hereunder, and to
assume all the obligations of such Lender hereunder, and, upon such purchase,
such Lender shall no longer be a party hereto or have any rights hereunder
(except those that survive full repayment hereunder) and shall be relieved from
all obligations to the Borrower hereunder, and the Eligible Assignee shall
succeed to the rights and obligations of such Lender hereunder.  The Borrower
shall execute and deliver to such Eligible Assignee a Note.  Notwithstanding
anything herein to the contrary, in the event that a Lender is replaced pursuant
to this Section 3.8 as a result of the Borrower becoming obligated to pay
additional amounts to such Lender pursuant to Section 3.5, Section 3.6 or
Section 3.7, such Lender shall be entitled to receive such additional amounts as
if it had not been so replaced.
 
 
ARTICLE 4.
 
REPRESENTATIONS AND WARRANTIES
 

The Borrower represents and warrants to the Credit Parties that:
 
Section 4.1 Organization; Powers. Each of the Borrower and the Restricted
Subsidiaries is duly organized or formed, validly existing and in good standing
under the laws of the jurisdiction of its organization or formation, has all
requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.
 
Section 4.2 Authorization; Enforceability. The Transactions are within the
corporate powers of the Borrower and have been duly authorized by all necessary
corporate and, if required, equity holder action.  Each Loan Document has been
duly executed and delivered by the Borrower and constitutes a legal, valid and
binding obligation thereof, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors’ rights generally and general principles of equity.
 
Section 4.3 Governmental Approvals; No Conflicts. The Transactions (i) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except for (x) information filings to be
made in the ordinary course of business, which filings are not a condition to
the Borrower’s performance under the Loan Documents and (y) such as have been
obtained or made and are in full force and effect and not subject to any
 
 

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appeals period, (ii) will not violate any applicable law or regulation or the
charter, by laws or other organizational documents of the Borrower or any order
of any Governmental Authority, (iii) will not violate or result in a default
under any material indenture, agreement or other instrument binding upon the
Borrower or its assets (including the Revolving Credit Agreement), or give rise
to a right thereunder to require any payment to be made by the Borrower, and
(iv) will not result in the creation or imposition of any Lien on any asset of
the Borrower (other than Liens expressly permitted by Section 7.2).
 
Section 4.4 Financial Condition; No Material Adverse Change.
 
(a) The Borrower has heretofore delivered to the Credit Parties copies of its
Form 10-K for the fiscal year ended December 31, 2008, containing (i) the
audited consolidated balance sheet of the Borrower and the Subsidiaries and the
related consolidated statements of operations, comprehensive income, changes in
stockholders’ equity and cash flows for the fiscal years ending December 31,
2008, December 31, 2007 and December 31, 2006 (with the applicable related notes
and schedules, the “Borrower Financial Statements”) and (ii) the audited
consolidated balance sheet of the Utility and the Utility Subsidiaries and the
related consolidated statements of income, members’ equity and cash flows for
the fiscal years December 31, 2008, December 31, 2007 and December 31, 2006
(with the applicable related notes and schedules, the “Utility Financial
Statements”).  Each of the Borrower Financial Statements and the Utility
Financial Statements have been prepared in accordance with GAAP and fairly
present the consolidated financial condition and results of the operations of
the Borrower as of the dates and for the periods indicated therein.
 
(b) Since December 31, 2008, each of the Borrower and the Restricted
Subsidiaries has conducted its business only in the ordinary course (other than
activities under the Storm Recovery Program) and there has been no Material
Adverse Change.
 
Section 4.5 Properties

 
(a) Each of the Borrower and the Restricted Subsidiaries has, subject to Liens
expressly permitted by Section 7.2, good title to, or valid leasehold interests
in, all its real and personal property material to its business, except for
minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties for their intended
purposes.
 
(b) Each of the Borrower and the Restricted Subsidiaries owns, possesses
adequate licenses or is otherwise entitled to use, all Intellectual Property
material to its business, and the use thereof by the Borrower and the Restricted
Subsidiaries does not infringe upon the rights of any other Person, except for
any failure to own or have such rights or any such infringements that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
 
Section 4.6 Litigation and Environmental Matters.
 
(a) There are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the Borrower,
threatened in writing against or affecting the Borrower or any of the Restricted
Subsidiaries (i) that, if adversely determined (and provided that there exists a
reasonable possibility of such adverse determination), could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect (other than the Disclosed Matters), except that the commencement by the
Borrower, any of the Restricted Subsidiaries or any Governmental Authority of a
rate proceeding or earnings review before such
 
 

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Governmental Authority shall not constitute such a pending or threatened action,
suit or proceeding unless and until such Governmental Authority has made a final
determination thereunder that could reasonably be expected to have a Material
Adverse Effect, or (ii) that involve any Loan Document or the Transactions.
 
(b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect:
 
(i) to the best knowledge of the Borrower, the properties owned, leased or
operated by the Borrower and the Restricted Subsidiaries (the “Properties”) do
not contain any Hazardous Materials in amounts or concentrations which (i)
constitute, or constituted a violation of, (ii) require Remedial Action under,
or (iii) could give rise to liability under, Environmental Laws, which
violations, Remedial Actions and liabilities, in the aggregate, could reasonably
be expected to result in a Material Adverse Effect,
 
(ii) to the best knowledge of the Borrower, the Properties and all operations of
the Borrower and the Restricted Subsidiaries are in compliance in all material
respects, and in the last five years have been in compliance, with all
Environmental Laws, and all necessary Environmental Permits have been obtained
and are in effect, except to the extent that such non-compliance or failure to
obtain any necessary permits, in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect,
 
(iii) to the best knowledge of the Borrower, there have been no Releases or
threatened Releases at, from, under or proximate to the Properties or otherwise
in connection with the current or former operations of the Borrower or the
Restricted Subsidiaries, which Releases or threatened Releases, in the
aggregate, could reasonably be expected to result in a Material Adverse Effect,
 
(iv) neither the Borrower nor any of the Restricted Subsidiaries has received
any notice directly or otherwise learned indirectly (through a Corporate
Officer) of an Environmental Claim in connection with the Properties or the
current or former operations of the Borrower or the Restricted Subsidiaries or
with regard to any Person whose liabilities for environmental matters the
Borrower or the Restricted Subsidiaries has retained or assumed, in whole or in
part, contractually, by operation of law or otherwise, which, in the aggregate,
could reasonably be expected to result in a Material Adverse Effect, nor do the
Borrower or the Restricted Subsidiaries have reason to believe that any such
notice will be received or is being overtly threatened, and
 
(v) to the best knowledge of the Borrower, Hazardous Materials have not been
transported from the Properties, nor have Hazardous Materials been generated,
treated, stored or disposed of at, on or under any of the Properties in a manner
that could give rise to liability under any Environmental Law, nor have the
Borrower or the Restricted Subsidiaries retained or assumed any liability,
contractually, by operation of law or otherwise, with respect to the generation,
treatment, storage or disposal of Hazardous Materials, which transportation,
generation, treatment, storage or disposal, or retained or assumed liabilities,
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect.
 
 

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(c) Since the Closing Date, there has been no change in the status of the
Disclosed Matters that, individually or in the aggregate, has resulted in, or
materially increased the likelihood of, a Material Adverse Effect.
 
Section 4.7 Compliance with Laws and Agreements. Each of the Borrower and the
Restricted Subsidiaries is in compliance with all laws, regulations and orders
of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect (other than
Disclosed Matters).  No Default has occurred and is continuing.
 
Section 4.8 Investment Company Status. Neither the Borrower nor any of the
Restricted Subsidiaries is an “investment company” or a company “controlled” by
an “investment company” as defined in, or is otherwise subject to regulation
under, the Investment Company Act of 1940.
 
Section 4.9 Taxes. Each of the Borrower and the Restricted Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (i) Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Restricted
Subsidiary, as applicable, has set aside on its books adequate reserves or (ii)
to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.
 
Section 4.10 ERISA. Each of the Borrower and its ERISA Affiliates is in
compliance in all material respects with the applicable provisions of ERISA and
the Code and the regulations and published interpretations thereunder except for
any such failure that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.  No ERISA Event has occurred or
is reasonably expected to occur that, when taken together with all other such
ERISA Events for which liability is reasonably expected to occur, could
reasonably be expected to result in a Material Adverse Effect. The present value
of all accumulated benefit obligations under each Plan (based on the assumptions
used for purposes of Statement of Financial Accounting Standards No. 87) did
not, as of the date of the most audited recent financial statements reflecting
such amounts, exceed by more than $75,000,000 the fair market value of the
assets of such Plan, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent audited financial statements reflecting such amounts, exceed
by more than $75,000,000 the fair market value of the assets of all such
underfunded Plans.
 
Section 4.11 Disclosure. The Borrower has disclosed to the Credit Parties all
agreements, instruments and corporate or other restrictions to which it or any
of the Restricted Subsidiaries is subject, and all other matters known to it,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect.  None of the reports, financial statements,
certificates or other information furnished by or on behalf of the Borrower or
any Restricted Subsidiary to any Credit Party in connection with the negotiation
of the Loan Documents or delivered thereunder when taken as a whole (as modified
or supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not materially misleading, provided that, to the extent any such reports,
financial statements, certificates or other information was based upon or
constitutes a forecast or a projection, the Borrower represents
 
 

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only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time.
 
Section 4.12 Subsidiaries. As of the Closing Date, the Borrower has only the
Subsidiaries set forth on Schedule 4.12, which Schedule sets forth with respect
to each Subsidiary, the identity of each Person which owns Equity Interests in
such Subsidiary and the percentage of the issued and outstanding Equity
Interests owned by each such Person.  The shares of each corporate Restricted
Subsidiary are duly authorized, validly issued, fully paid and non assessable
and are owned free and clear of any Liens, other than Liens permitted pursuant
to Section 7.2(i).  The interest of the Borrower in each non-corporate
Restricted Subsidiary is owned free and clear of any Liens, other than Liens
permitted pursuant to Section 7.2(i). As of the Closing Date, neither the
Borrower nor any Subsidiary has issued any Disqualified Stock.
 
Section 4.13 Federal Reserve Regulations, etc.

 
(a) Neither the Borrower nor any of the Subsidiaries is engaged principally, or
as one of their important activities, in the business of extending credit for
the purpose of buying or carrying Margin Stock. Immediately before and after
giving effect to the making of each Loan, Margin Stock will constitute less than
25% of the Borrower’s assets as determined in accordance with Regulation U.
 
(b) No part of the proceeds of any Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, (i) to
purchase, acquire or carry any Margin Stock or for any purpose that entails a
violation of, or that is inconsistent with, the provisions of the regulations of
the Board, including Regulation T, U or X or (ii) to fund a personal loan to or
for the benefit of a director or executive officer of a Borrower or any
Subsidiary.
 
 
ARTICLE 5.
 
CONDITIONS
 

Section 5.1 Effective Date. The obligations of the Lenders to make Loans
hereunder shall not become effective until the date (the “Effective Date”) on
which each of the following conditions is satisfied (or waived in accordance
with Section 10.2):
 
(a) Loan Agreement. The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this Loan Agreement
signed on behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include facsimile transmission of a signed
signature page of this Loan Agreement) that such party has signed a counterpart
of this Loan Agreement.
 
(b) Notes. The Administrative Agent shall have received a Note for each Lender,
signed on behalf of the Borrower.
 
(c) Legal Opinion. The Administrative Agent shall have received a favorable
written opinion (addressed to the Credit Parties and dated the Effective Date)
from Phelps Dunbar, L.L.P., special counsel to the Borrower, substantially in
the form of Exhibit B, and covering such other matters relating to the Borrower,
the Loan Documents and the Transactions as the Required Lenders may reasonably
request. The Borrower hereby requests such counsel to deliver such opinions.
 
 

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(d) Organizational Documents, etc. The Administrative Agent shall have received
such documents and certificates as the Administrative Agent or its counsel may
reasonably request relating to (i) the organization, existence and good standing
of the Borrower (including (x) the articles of incorporation of the Borrower,
certified as of a recent date by the Secretary of State of the jurisdiction of
its incorporation and (y) certificates of good standing (or comparable
certificates) for the Borrower, certified as of a recent date prior to the
Effective Date, by the Secretaries of State (or comparable official) of the
jurisdiction of its incorporation and each other jurisdiction in which it is
qualified to do business, (ii) the authorization of the Transactions, (iii) the
incumbency of its officer or officers who may sign the Loan Documents, including
therein a signature specimen of such officer or officers and (iv) any other
legal matters relating to the Borrower, the Loan Documents or the Transactions,
all in form and substance reasonably satisfactory to the Administrative Agent
and its counsel.
 
(e) Officer’s Certificate. The Administrative Agent shall have received a
certificate, in form and substance satisfactory to the Administrative Agent,
dated the Effective Date and signed by the chief executive officer or the chief
financial officer of the Borrower (or other Financial Officer acceptable to the
Administrative Agent):
 
(i) confirming compliance with the conditions set forth in paragraphs (a) and
(b) of Section 5.2; and
 
(ii) certifying that all approvals and consents of all Persons required to be
obtained in connection with the consummation of the Transactions have been duly
obtained and are in full force and effect and that all required notices have
been given and all required waiting periods have expired, attaching thereto true
and complete copies of all such required governmental and regulatory
authorizations and approvals.
 
(f) Fees and Expenses. The Administrative Agent and the Lenders and their
respective Affiliates shall have received all fees and other amounts due and
payable on or prior to the Effective Date in connection with this Loan
Agreement, including, to the extent invoiced, reimbursement or payment of all
out of pocket expenses required to be reimbursed or paid by the Borrower.
 
(g) No Material Adverse Change. The Administrative Agent shall have received a
certificate of a Financial Officer, in form and substance satisfactory to the
Administrative Agent, dated the Effective Date, to the effect that since
December 31, 2008, no Material Adverse Change has occurred.
 
(h) Certain Agreements. The Administrative Agent shall have received a
certificate of a duly authorized officer of the Borrower, in form and substance
satisfactory to the Administrative Agent, certifying that the copies of the
Employee Stock Ownership Plan and the Inter-Affiliate Policies Agreement
attached thereto are accurate and complete.
 
The Administrative Agent shall notify each of the Borrower and the Credit
Parties of the Effective Date, and each such notice shall be conclusive and
binding.  Notwithstanding the foregoing, the obligations of the Lenders to make
Loans hereunder shall not become effective unless each of the foregoing
conditions is satisfied (or waived pursuant to Section 10.2) at or prior to 3:00
p.m., New York City time, on February 26, 2010 (and, in the event such
conditions are not so satisfied or waived, the Commitments shall terminate at
such time).
 
 

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Section 5.2 Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing (each such event being called a “Credit Event”) is
subject to the satisfaction of the following conditions:
 
(a) The representations and warranties of the Borrower set forth in the Loan
Documents shall be true and correct on and as of the date of such Borrowing or
the date of such issuance, increase, amendment, renewal or extension, as
applicable, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such representations and
warranties shall have been true and correct on and as of such earlier date,
 
(b) At the time of and immediately after giving effect to such Borrowing or such
issuance, increase, amendment, renewal or extension, as applicable, no Default
shall have occurred and be continuing.
 
(c) The Administrative Agent shall have received such other documentation and
assurances as shall be reasonably required by it in connection therewith.
 
(d) Such Loan shall not be prohibited by any applicable law, rule or regulation.
 
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in paragraphs (a)
and (b) of this Section.
 
 
ARTICLE 6.
 
AFFIRMATIVE COVENANTS
 

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees and other amounts payable under the Loan
Documents shall have been paid in full, the Borrower covenants and agrees with
the Credit Parties that:
 
Section 6.1 Financial Statements and Other Information. The Borrower will
furnish to the Administrative Agent and each Lender:
 
(a) As soon as available, but in any event within 120 days after the end of each
fiscal year (commencing with the fiscal year ending December 31, 2009), (i) a
copy of the Borrower’s Annual Report on Form 10-K in respect of such fiscal year
required to be filed by the Borrower with the SEC, together with the financial
statements attached thereto, and (ii) the Borrower’s audited consolidated and
unaudited consolidating balance sheet and related statements of income,
stockholder’s equity and cash flows as of the end of and for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on by the Accountants (without a “going concern” or
like qualification or exception and without any qualification or exception as to
the scope of such audit) to the effect that such consolidated or consolidating,
as the case may be, financial statements present fairly in all material respects
the financial conditions and results of operations of the Borrower on a
consolidated or consolidating, as the case may be, basis in accordance with GAAP
consistently applied, together with in the case of the statements referred to in
clause (ii) above, a schedule of other audited financial information consisting
of consolidating or combining details in columnar form with the Subsidiaries of
the Borrower separately identified, in accordance with GAAP consistently
applied;
 
 

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(b) As soon as available, but in any event within 60 days after the end of each
of the first three fiscal quarters of each fiscal year (commencing with the
fiscal quarter ending March 31, 2010), (i) a copy of the Borrower’s Quarterly
Report on Form 10-Q in respect of such fiscal quarter required to be filed by
the Borrower with the SEC, together with the financial statements attached
thereto, and (ii) the Borrower’s unaudited consolidated and unaudited
consolidating balance sheet and related statements of income, stockholder’s
equity and cash flows as of the end of and for such fiscal quarter and the then
elapsed portion of the fiscal year, setting forth in each case in comparative
form the figures for corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous fiscal year, all certified by a
duly authorized Financial Officer as presenting fairly in all material respects
the financial conditions and results of operations of the Borrower on a
consolidated or consolidating, as the case may be, basis in accordance with GAAP
consistently applied, subject to normal year end audit adjustments and the
absence of footnotes, together with, in the case of the financial statements
referred to in clause (ii) above, a schedule of other unaudited financial
information consisting of consolidating or combining details in columnar form
with the Subsidiaries of the Borrower separately identified, in accordance with
GAAP consistently applied;
 
(c) Within 60 days after the end of each of the first three fiscal quarters (120
days after the end of the last fiscal quarter), a Compliance Certificate, signed
by a Financial Officer (or such other officer as shall be acceptable to the
Administrative Agent) as to the Borrower’s compliance, as of such fiscal quarter
ending date, with Section 6.11, and as to the occurrence or continuance of no
Default or Event of Default as of such fiscal quarter ending date and the date
of such certificate; and
 
(d) promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of the Borrower or any
Restricted Subsidiary, or compliance with the terms of the Loan Documents, as
any Credit Party may reasonably request.
 
Section 6.2 Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender of the following:
 
(a) Prompt written notice of the occurrence of any (i) Event of Default or
Default, specifying the nature and extent thereof and (ii) a Material Adverse
Change;
 
(b) Prompt written notice of (i) any material citation, summons, subpoena, order
to show cause or other document naming the Borrower or any of the Restricted
Subsidiaries a party to any proceeding before any Governmental Authority, and
include with such notice a copy of such citation, summons, subpoena, order to
show cause or other document, or (ii) any lapse or other termination of, or
refusal to renew or extend, any material Intellectual Property, license, permit,
franchise or other authorization issued to the Borrower or any of the Restricted
Subsidiaries by any Person or Governmental Authority, provided that any of the
foregoing set forth in this subsection (b) could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect or call into
question the validity or enforceability of any of the Loan Documents;
 
(c) Promptly upon becoming available, copies of all (i) regular, periodic or
special reports, schedules and other material which the Borrower or any of the
Restricted Subsidiaries may be required to file with or deliver to any
securities exchange or the SEC, or any other Governmental Authority succeeding
to the functions thereof, (ii) copies of any statement or report furnished to
any holder of debt securities of the Borrower or of any of the Restricted
Subsidiaries pursuant to the terms of any indenture, loan or credit or similar
agreement and not otherwise required
 
 

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to be furnished to the Lenders pursuant to any other clause of this Section 6.2,
(iii) material news releases and annual reports relating to the Borrower or any
of the Restricted Subsidiaries, and (iv) upon the written request of the
Administrative Agent, reports that the Borrower or any of the Restricted
Subsidiaries sends to or files with the LPSC and the Federal Energy Regulatory
Commission, or any Governmental Authority succeeding to the functions thereof,
or any similar state or local Governmental Authority;
 
(d) Prompt written notice of any order, notice, claim or proceeding received by,
or brought against, the Borrower or any of the Restricted Subsidiaries, or with
respect to any real property under any Environmental Law, that could reasonably
be expected to have a Material Adverse Effect; and
 
(e) Prompt written notice of any change by either Moody’s or S&P in the Senior
Debt Rating.
 
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
 
Documents required to be delivered pursuant to Section 6.1(a) or (b) or clauses
(i) through (iii) of Section 6.2(c) (to the extent any such documents are
included in materials otherwise filed with the SEC) may be delivered
electronically and if so delivered, shall be deemed to have been delivered on
the date (i) on which the Borrower posts such documents, or provides a link
thereto on the Borrower’s website on the Internet at the website address listed
in Section 10.1; or (ii) on which such documents are posted on the Borrower’s
behalf on an Internet or intranet website, if any, to which each Lender and the
Administrative have access (whether a commercial, third-party website or whether
sponsored by the Administrative Agent), provided that: (i) the Borrower shall
deliver paper copies of such documents to the Administrative Agent or any Lender
that requests the Borrower to deliver such paper copies until a written request
to cease delivering paper copies is given by the Administrative Agent or such
Lender and (ii) the Borrower shall notify the Administrative Agent and each
Lender (by facsimile or electronic mail) of the posting of any such documents
and provide to the Administrative Agent by electronic mail electronic versions
(i.e., soft copies) of such documents.  Notwithstanding anything contained
herein, in every instance the Borrower shall be required to provide paper copies
of the Compliance Certificates required by Section 6.1(c) to the Administrative
Agent.  Except for such Compliance Certificates, the Administrative Agent shall
have no obligation to request the delivery or to maintain copies of the
documents referred to above, and in any event shall have no responsibility to
monitor compliance by the Borrower with any such request for delivery, and each
Lender shall be solely responsible for requesting delivery to it or maintaining
its copies of such documents.
 
The Borrower hereby acknowledges that (i) the Administrative Agent will make
available to the Lenders on a confidential basis materials and/or information
provided by or on behalf of the Borrower hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or another similar
electronic system (the “Platform”) and (b) certain of the Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Borrower or its securities) (each, a
“Public Lender”).  The Administrative Agent will notify the Borrower in writing
if it receives written notice from a Lender identifying itself as a Public
Lender.  The Borrower hereby agrees that it will notify the Administrative Agent
in the event that any non-public information is included in the Borrower
Materials and to cooperate with the Administrative Agent to ensure that such
non-public information is not distributed to a Public Lender.
 
 

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Section 6.3 Legal Existence. Except as permitted under Section 7.3, the Borrower
shall maintain its legal existence in good standing in the jurisdiction of its
incorporation or formation and in each other jurisdiction in which the failure
so to do could reasonably be expected to have a Material Adverse Effect, and
cause each of the Restricted Subsidiaries to maintain its legal existence in
good standing in each jurisdiction in which the failure so to do could
reasonably be expected to have a Material Adverse Effect.
 
Section 6.4 Taxes. The Borrower shall pay and discharge when due, and cause each
of the Subsidiaries so to do, all Taxes, assessments and governmental charges,
license fees and levies upon or with respect to the Borrower or such Subsidiary,
as the case may be, and all Taxes upon the income, profits and property of the
Borrower and the Subsidiaries, which if unpaid, could individually or
collectively reasonably be expected to have a Material Adverse Effect or become
a Lien on the property of the Borrower or such Subsidiary (other than a Lien
described in clause (a) of the definition of Permitted Encumbrances), as the
case may be, unless and to the extent only that such Taxes, assessments,
charges, license fees and levies shall be contested in good faith and by
appropriate proceedings diligently conducted by the Borrower or such Subsidiary,
as the case may be, provided that such reserve or other appropriate provision as
shall be required by the Accountants in accordance with GAAP shall have been
made therefor.
 
Section 6.5 Insurance. The Borrower shall maintain, and cause each of the
Restricted Subsidiaries to maintain, with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks (but including in any event public liability and
business interruption coverage) as are usually insured against in the same
general area by companies engaged in the same or a similar business; and furnish
to the Administrative Agent, upon written request of the Administrative Agent or
any Lender, full information as to the insurance carried.
 
Section 6.6 Payment of Indebtedness and Performance of Obligations. The Borrower
shall pay and discharge when due, and cause each of the Restricted Subsidiaries
to pay and discharge when due, all lawful Indebtedness, obligations and claims
for labor, materials and supplies or otherwise which, if unpaid, could
individually or collectively reasonably be expected to (i) have a Material
Adverse Effect or (ii) become a Lien upon property of the Borrower or any of the
Restricted Subsidiaries (other than a Lien expressly permitted by Section 7.2),
unless and to the extent only that the validity of such Indebtedness, obligation
or claim shall be contested in good faith and by appropriate proceedings
diligently conducted, provided that such reserve or other appropriate provision
as shall be required by the Accountants in accordance with GAAP shall have been
made therefor.
 
Section 6.7 Condition of Property. The Borrower shall at all times, maintain,
protect and keep in good repair, working order and condition (ordinary wear and
tear excepted), and cause each of the Restricted Subsidiaries so to do, all
material property necessary to the operation of the Borrower’s or such
Restricted Subsidiary’s, as the case may be, material businesses.
 
Section 6.8 Observance of Legal Requirements. The Borrower shall observe and
comply in all respects, and cause each of the Restricted Subsidiaries so to do,
with all laws, ordinances, orders, judgments, rules, regulations,
certifications, franchises, permits, licenses, directions and requirements of
all Governmental Authorities, which now or at any time hereafter may be
applicable to it, including ERISA and all Environmental Laws, a violation of
which could individually or collectively reasonably be expected to have a
Material Adverse Effect, except such thereof as shall be contested in good faith
and by appropriate proceedings diligently conducted by it,
 
 

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provided that such reserve or other appropriate provision as shall be required
by the Accountants in accordance with GAAP shall have been made therefor.
 
Section 6.9 Inspection of Property; Books and Records; Discussions. The Borrower
shall keep proper books of record and account in which full, true and correct
entries in conformity with GAAP and all requirements of law shall be made of all
dealings and transactions in relation to its business and activities and permit
representatives of the Administrative Agent and any Lender to visit its offices,
to inspect any of its property and examine and make copies or abstracts from any
of its books and records at any reasonable time and as often as may reasonably
be desired, and to discuss the business, operations, prospects, licenses,
property and financial condition of the Borrower and the Restricted Subsidiaries
with the officers thereof and the Accountants; provided that, so long as no
Default or Event of Default exists, none of the Administrative Agent, its
agents, its representatives or the Lenders shall be entitled to examine or make
copies or abstracts of, or otherwise obtain information with respect to, the
Borrower’s records relating to pending or threatened litigation if any such
disclosure by the Borrower could reasonably be expected (i) to give rise to a
waiver of any attorney/client privilege of the Borrower or any of the Restricted
Subsidiaries relating to such information or (ii) to be otherwise materially
disadvantageous to the Borrower or any of the Restricted Subsidiaries in the
defense of such litigation.
 
Section 6.10 Licenses; Intellectual Property. The Borrower shall obtain or
maintain, as applicable, and cause each of the Restricted Subsidiaries to obtain
or maintain, as applicable, in full force and effect, all licenses, franchises,
Intellectual Property, permits, authorizations and other rights as are necessary
for the conduct of its business and the failure of which to obtain or maintain
could, individually or collectively, reasonably be expected to have a Material
Adverse Effect.
 
Section 6.11 Financial Covenants.
 
(a) The Borrower shall maintain at all times Total Indebtedness equal to or less
than 65% of Total Capitalization.
 
(b) The Borrower will not permit the Interest Coverage Ratio as of the end of
any fiscal quarter to be less than 2.50:1.00.
 
Section 6.12 Use of Proceeds. The proceeds of the Loans will be used for general
corporate purposes of the Borrower and its Subsidiaries in the ordinary course
of business.
 
 
ARTICLE 7.
 
NEGATIVE COVENANTS
 

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees and other amounts payable under the Loan
Documents shall have been paid in full, the Borrower covenants and agrees with
the Credit Parties that:
 
Section 7.1 Indebtedness. The Borrower shall not create, incur, assume or suffer
to exist any Indebtedness, except:
 
(a) Indebtedness under the Loan Documents;
 
 

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(b) Guarantees in respect of obligations and liabilities under leases for coal
cars supplied in connection with Rodemacher Unit No. 2, provided that the
aggregate amount thereof shall not exceed $13,000,000 at any time;
 
(c) Guarantees in respect of obligations and liabilities of the Utility;
 
(d) other Guarantees in respect of Permitted Hedge Agreements, provided that the
aggregate amount of such Guarantees under this clause (d) shall not exceed
$20,000,000 at any time;
 
(e) Indebtedness of the Borrower to Investment Fund; and
 
(f) other Indebtedness (including Indebtedness of the Borrower to any Subsidiary
but, for the avoidance of doubt, excluding Indebtedness of the Borrower to
Investment Fund as permitted in Section 7.1(e)) and other Guarantees, in an
amount which when aggregated with the Indebtedness under the Loan Documents
shall not exceed $425,000,000 at any time, provided that (i) not more than
$325,000,000 thereof shall constitute Indebtedness or Guarantees which are pari
passu with the Indebtedness under the Loan Documents, (ii) any such Indebtedness
or Guarantees which is not pari passu with the Indebtedness under the Loan
Documents shall be unsecured and subordinated to the Indebtedness of the
Borrower under the Loan Documents in a manner consistent with the Approved
Subordination Terms and otherwise satisfactory to the Administrative Agent and
(iii) the aggregate amount of Indebtedness and Guarantees under clause (f)(i)
that is secured shall not exceed $25,000,000 at any time.
 
Section 7.2 Liens. The Borrower shall not permit any Restricted Subsidiary to
create, incur, assume or suffer to exist any Lien upon any of its property,
whether now owned or hereafter acquired by it, except:
 
(a) Liens now existing or hereafter arising in favor of the Administrative Agent
or the Lenders under the Loan Documents;
 
(b) Permitted Encumbrances;
 
(c) any Lien on any property or asset of the Borrower or any Restricted
Subsidiary (other than Finsub) existing on the Closing Date and set forth in
Schedule 7.2;
 
(d) any Lien existing on any property or asset prior to the acquisition thereof
by the Borrower or any of the Restricted Subsidiaries (other than Finsub) or
existing on any property or asset of any Person that becomes a Restricted
Subsidiary (other than Finsub) after the Closing Date prior to the time such
Person becomes a Restricted Subsidiary, provided that (i) such Lien is not
created in contemplation of or in connection with such acquisition or such
Person becoming a Restricted Subsidiary, as the case may be, (ii) such Lien
shall not apply to any other property or assets of the Borrower or any of the
Restricted Subsidiaries, and (iii) such Lien shall secure only those obligations
and liabilities that it secures on the date of such acquisition or the date such
Person becomes a Restricted Subsidiary of the Borrower, as the case may be, and
any extensions, renewals, refinancings and replacements thereof that do not
increase the outstanding amount thereof;
 
(e) Liens (including precautionary Liens in connection with capital lease
financings) (i) in the case of a project financing by any of the Restricted
Subsidiaries (other than Finsub), on fixed or capital assets comprising such
project and other property (including accounts,
 
 

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contracts and other general intangibles) relating to the relevant project that
is or becomes encumbered in connection with the relevant project’s financing by
the relevant Restricted Subsidiary and (ii) in all other cases, on fixed or
capital assets and other property (including any natural gas, oil or other
mineral assets, pollution control facilities, electrical generating plants,
equipment and machinery) acquired, constructed, explored, drilled, developed,
improved, repaired or serviced (including in connection with the financing of
working capital and ongoing maintenance) by the Borrower or any of the
Restricted Subsidiaries (other than Finsub), provided that (A) such security
interests and the obligations and liabilities secured thereby are incurred prior
to or within 90 days after the acquisition of the relevant asset or the
completion of the relevant construction, exploration, drilling, development,
improvement, repair or servicing (including the relevant financing of working
capital and ongoing maintenance), or within 90 days after the extension,
renewal, refinancing or replacement of the obligations and liabilities secured
thereby, as the case may be, (B) the obligations and liabilities secured thereby
do not exceed the cost of acquiring, constructing, exploring, drilling,
developing, improving, repairing or servicing (including the financing of
working capital and ongoing maintenance in respect of) the relevant assets, and
(C) such security interests shall not apply to any other property beyond the
relevant property set forth in clause (i) or (ii) of this subsection (e) and
subsection (i), as applicable, of the Borrower or any of the Restricted
Subsidiaries;
 
(f) Liens created to secure Indebtedness of any Restricted Subsidiary (other
than Finsub) of the Borrower to the Borrower or to any of the Borrower’s other
Restricted Subsidiaries (other than Finsub);
 
(g) Liens created to secure sales or factoring of accounts receivable and other
receivables (other than Liens created by Finsub);
 
(h) Liens created to secure Indebtedness and other Guarantees permitted under
Section 7.1(f), provided that the aggregate amount of such Indebtedness and
other Guarantees shall not exceed $25,000,000;
 
(i) Liens on any Equity Interest (other than an Equity Interest in the Utility)
owned or otherwise held by or on behalf of the Borrower or any Restricted
Subsidiary (other than Finsub) created in connection with any project financing;
 
(j) Liens created for the sole purpose of extending, renewing or replacing in
whole or in part Indebtedness secured by any lien, mortgage or security interest
referred to in the foregoing clauses (a) through (i), provided, however, that
the principal amount of Indebtedness secured thereby shall not exceed the
principal amount of Indebtedness so secured at the time of such extension,
renewal or replacement and that such extension, renewal or replacement, as the
case may be, shall be limited to all or a part of the property or indebtedness
that secured the lien or mortgage so extended, renewed or replaced (and any
improvements on such property); and
 
(k) in the case of the Utility and the Utility Subsidiaries, Liens permitted by
the Utility Credit Agreement and the Utility Loan Agreement, in each case as in
effect on the Closing Date (without giving effect to any amendment, supplement
or other modification to any term or provision contained therein which has not
been approved in writing by Required Lenders).
 
Section 7.3 Merger, Consolidation, Purchase or Sale of Assets, Etc. The Borrower
shall not consolidate with, be acquired by, or merge into or with any Person, or
convey, sell, lease or otherwise dispose of all or any part of its property, or
enter into any sale leaseback transaction, or purchase or otherwise acquire (in
one or a series of related transactions) any part of the property (other
 
 

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than purchases or other acquisitions of inventory, materials, equipment and
similar property in the ordinary course of business) of any Person, including
acquisitions of the Equity Interests of any Person, or permit any of the
Restricted Subsidiaries so to do, except:
 
(a) sales or other dispositions by the Borrower or any Restricted Subsidiary
(other than Finsub) of Permitted Investments, inventory and similar property in
the ordinary course of business;
 
(b) sales, factoring or other dispositions of accounts receivable and other
receivables and similar property by the Borrower or any Restricted Subsidiary
(other than Finsub);
 
(c) Asset Sales by the Borrower to any of the Restricted Subsidiaries (other
than Finsub) and by any of the Restricted Subsidiaries (other than Finsub) to
the Borrower or any of the other Restricted Subsidiaries (other than Finsub);
 
(d) (i) sales of transmission assets pursuant to the order of any Governmental
Authority, provided that fair market value shall have been received for such
transmission assets and (ii) other Asset Sales, provided that (A) no Default or
Event of Default shall exist immediately before or after giving effect thereto
and (B) immediately after giving effect thereto, the amount thereof, when added
to the total amount of all Asset Sales made by the Borrower and the Restricted
Subsidiaries during the immediately preceding twelve month period pursuant to
this clause (c)(ii) shall not exceed 18% or more of Material Total Assets as of
the first day of such twelve month period;
 
(e) Storm Recovery Asset Sales by the Utility to Finsub in connection with the
Storm Recovery Program as to which the following conditions have been satisfied:
 
(i) immediately before and after giving effect thereto, no Default or Event of
Default shall exist;
 
(ii) immediately before and after giving effect thereto, all of the
representations and warranties contained in the Loan Documents shall be true and
correct except as the context thereof otherwise requires and except for those
representations and warranties which by their terms or by necessary implication
are expressly limited to a state of facts existing at a time prior to such Storm
Recovery Asset Sale or such other matters relating thereto as are identified in
a writing to the Administrative Agent and the Lenders and are satisfactory to
the Administrative Agent and the Lenders;
 
(iii) the Storm Recovery Asset Sale is without recourse to the Utility;
 
(iv) 100% of the consideration paid to the Utility in connection therewith is in
cash;
 
(v) in connection with the initial closing of the Storm Recovery Program, the
Administrative Agent shall have received a certificate of a Financial Officer
(attaching calculations in reasonable detail) certifying that the Borrower will
be in compliance with the covenants set forth in Section 6.11 immediately after
giving effect to the Storm Recovery Program and any Indebtedness incurred in
connection therewith;
 
(vi) in connection with the initial closing of the Storm Recovery Program, the
Administrative Agent shall have received a copy of the Storm Recovery Financing
Order
 
 

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(and from time to time thereafter, copies of any amendments, supplements or
modifications thereof or any additional Storm Recovery Financing Orders); and
 
(vii) in connection with the initial closing of the Storm Recovery Program, the
Administrative Agent shall have received a certificate of an officer of the
Borrower attaching true, correct and complete copies of the Storm Recovery
Program Documentation.
 
(f) any of the Restricted Subsidiaries (other than Finsub) may merge or
consolidate with or into, or acquire control of, or acquire all or any portion
of the assets of any Person, provided that (i) immediately after giving effect
thereto, the total consideration to be paid by the Restricted Subsidiaries to or
for the account of any Person (other than the Borrower and the Restricted
Subsidiaries) in connection therewith, but not counting purchases or other
acquisitions of property made as part of the Utility’s Integrated Resources
Plan, when added to the total consideration paid by the Borrower and the
Restricted Subsidiaries to or for the account of any Person (other than the
Borrower and the Restricted Subsidiaries) in connection with all other mergers,
consolidations and acquisitions permitted under Sections 7.3(f) and 7.3(g)
during the period of the immediately preceding twelve months, shall not exceed
15% of Material Total Assets as of the most recently completed fiscal quarter,
and (ii) in the case of a transaction involving the Utility, the Utility shall
be the survivor entity thereof or, in the event the Utility shall not be the
surviving entity thereof, (1) such surviving entity shall be organized in a
State of the United States with substantially all of its assets and businesses
located and conducted in the United States and (2) the Administrative Agent
shall have received (A) a certificate, in form and substance satisfactory to the
Administrative Agent, (x) attaching a true and complete copy of each agreement,
instrument or other document effecting such merger, consolidation or
acquisition, together with an agreement signed on behalf of such surviving
entity pursuant to which such surviving entity shall have expressly assumed all
of the indebtedness, liabilities and other obligations of the Utility under and
in accordance with the Utility Credit Agreement, the Utility Loan Agreement and
the other Loan Documents (as defined therein), and (y) certifying that such
merger, consolidation or acquisition has been consummated in accordance with
such agreements, instruments or other documents referred to in the immediately
preceding clause (x), and (B) such documents, legal opinions and certificates as
the Administrative Agent shall reasonably request relating to the organization,
existence and, if applicable, good standing of such surviving entity, the
authorization of such merger, consolidation or acquisition and any other legal
matters relating to such surviving entity, the assumption agreement referred to
in the immediately preceding clause (x) or such merger, consolidation or
acquisition;
 
(g) the Borrower may merge or consolidate with or into, or acquire control of,
or acquire all or any portion of the assets of any Person (other than Finsub),
provided that:
 
(i) immediately before and after giving effect thereto, no Default or Event of
Default shall exist;
 
(ii) immediately before and after giving effect thereto, all of the
representations and warranties contained in the Loan Documents shall be true and
correct except as the context thereof otherwise requires and except for those
representations and warranties which by their terms or by necessary implication
are expressly limited to a state of facts existing at a time prior to such
merger, consolidation or acquisition, as the case may be, or such other matters
relating thereto as are identified in a writing to the Administrative Agent and
the Lenders and are satisfactory to the Administrative Agent and the Lenders;
 
 

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(iii) the Borrower shall be the surviving entity thereof or each of the
following conditions shall have been satisfied: (x) such surviving entity shall
have been incorporated or otherwise formed in a State of the United States with
substantially all of its assets and business located and conducted in the United
States, (y) such surviving entity shall, at the time of such merger, have a
senior unsecured long term debt rating of BBB- or higher from S&P and Baa3 or
higher from Moody’s (provided that, if such surviving entity shall be a public
utility holding company and shall not have at such time a senior unsecured long
term debt rating from S&P and Moody’s, then its primary utility Subsidiary shall
have at such time a senior unsecured long term debt rating of BBB- or higher
from S&P and Baa3 or higher from Moody’s), and (z) such surviving entity shall
have expressly assumed the obligations of the Borrower under the Loan Documents
pursuant to a writing in form and substance satisfactory to the Administrative
Agent;
 
(iv) immediately after giving effect thereto, the total consideration to be paid
by the Borrower to or for the account of any Person (other than the Restricted
Subsidiaries of the Borrower) in connection therewith, when added to the total
consideration paid by the Borrower and the Restricted Subsidiaries to or for the
account of any Person (other than the Borrower and the Restricted Subsidiaries)
in connection with all mergers, consolidations and acquisitions permitted under
Sections 7.3(f) and 7.3(g) during the immediately preceding twelve month period
shall not exceed 15% of Material Total Assets as of the most recently completed
fiscal quarter; provided that any investment by the Borrower in Investment Fund
shall not be included in any determination made pursuant to this clause (iv);
and
 
(v) the Administrative Agent and the Lenders shall have received a certificate
duly signed by a duly authorized officer of the Borrower identifying the Person
to be merged with or into, consolidated with, or acquired by, the Borrower, and
certifying as to each of the matters set forth in subclauses (i) through (iv) of
this clause (e).
 
Section 7.4 Loans, Advances, Investments, etc. The Borrower shall not, at any
time, make any loan or advance to, or make or permit to be made any investment
or any other interest in, or enter into any arrangement for the purpose of
providing funds or credit to, any Person (including any director or executive
officer of the Borrower or to the extent it will be a violation of applicable
law, of any Subsidiary), or permit any of the Restricted Subsidiaries so to do,
other than (i) Permitted Investments, (ii) loans and advances made by the
Borrower to any of the Restricted Subsidiaries (other than Finsub) and made by
any of the Restricted Subsidiaries (other than Finsub) to the Borrower or any of
the other Restricted Subsidiaries (other than Finsub), (iii) investments made by
the Borrower in the equity securities of any of the Restricted Subsidiaries and
made by any of the Restricted Subsidiaries (other than Finsub) in the equity
securities of any of the other Restricted Subsidiaries, (iv) arrangements made
by the Borrower for the purpose of providing funds or credit to any of the
Restricted Subsidiaries (other than Finsub) and made by any of the Restricted
Subsidiaries (other than Finsub) for the purpose of providing funds or credit to
the Borrower or any of the other Restricted Subsidiaries (other than Finsub),
(v) investments made before the Closing Date by the Borrower in the equity
securities of any of the Unrestricted Subsidiaries, (vi) the Storm Recovery
Program subject to the satisfaction of the conditions set forth in Section
7.3(e), and (vii) provided that immediately before and after giving effect
thereto, no Default or Event of Default shall exist, (A) investments made by the
Borrower or any Restricted Subsidiary (other than Finsub) in the equity
securities of any of the Unrestricted Subsidiaries in an aggregate amount not in
excess of $10,000,000 in any fiscal year (provided that (i) any  investment by
the Borrower in the membership interests of Investment Fund (so long as the
aggregate amount of such investments does not exceed $216,665,452) and (ii) the
capital
 
 

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contribution in cash by the Borrower in Acadia Holdings made in connection with
the Acadia Transactions (so long as the aggregate amount of such capital
contribution does not exceed $153,000,000), in each case shall not be included
in any determination made pursuant to this clause (vii)(A)), and (B) loans and
advances made by the Borrower or any Restricted Subsidiary (other than Finsub)
to any of the Unrestricted Subsidiaries and other arrangements made by the
Borrower or any Restricted Subsidiary (other than Finsub) for the purpose of
providing funds or credit to any of the Unrestricted Subsidiaries, collectively,
in an aggregate amount not in excess of $20,000,000 at any time outstanding.
 
Section 7.5 Amendments, etc. of Employee Stock Ownership Plan. The Borrower
shall not enter into or agree to any amendment, modification or waiver, or
permit any of the Restricted Subsidiaries so to do, of any term or condition of,
or any of its rights under, the Employee Stock Ownership Plan (other than
amendments and modifications required by tax laws to maintain the qualified
status under Section 401(a) of the Code and any adoptive instruments or other
agreements providing for participation in the Employee Stock Ownership Plan by
the Borrower’s affiliates), which amendment, modification or waiver could, in
the reasonable opinion of the Administrative Agent, materially and adversely
affect the interests of the Lenders under the Loan Documents.
 
Section 7.6 Restricted Payments. The Borrower shall not declare or make, or
agree to pay for or make, directly or indirectly, any Restricted Payment, or
permit any of the Restricted Subsidiaries so to do, except that (i) the Borrower
or any of the Restricted Subsidiaries may declare and pay dividends with respect
to its equity securities payable solely in additional shares of such equity
securities, (ii) any of the Restricted Subsidiaries may declare and pay
dividends with respect to its equity securities to the Borrower or any of the
other Restricted Subsidiaries, (iii) the Borrower may make, and agree to make,
payments on account of liabilities described in clause (vi) of the definition of
“Indebtedness” contained herein and permitted by Section 7.1, (iv) the Borrower
may declare and pay dividends with respect to its preferred equity securities,
(v) if at the time thereof and immediately after giving effect thereto no
Default or Event of Default shall have occurred and be continuing, the Borrower
may declare and pay, and agree to declare and  pay, directly or indirectly,
Restricted Payments in cash to its common shareholders, (vi) the Borrower or any
of the Restricted Subsidiaries may make, and agree to make, payments on account
of subordinated Indebtedness described in clause (iii) of the definition of
“Restricted Payments” and permitted by the subordination terms applicable
thereto and (vii) the Borrower may repurchase common Equity Interests or common
stock options from present or former officers, directors or employees (or heirs
of, estates of or trusts formed such persons) of the Borrower or any Subsidiary
upon the death, disability, retirement or termination of employment of such
officer, director or employee or pursuant to the terms of any stock option plan
or like agreement; provided, however, that the aggregate amount of payments
under this clause (vii) shall not exceed $2,000,000 in any fiscal year of the
Borrower.
 
Section 7.7 Transactions with Affiliates. The Borrower shall not, and shall not
permit any of the Restricted Subsidiaries to, sell, transfer, lease or otherwise
dispose of (including pursuant to a merger) any property or assets to, or
purchase, lease or otherwise acquire (including pursuant to a merger) any
property or assets from, or otherwise engage in any other transactions with, any
of its affiliates, except in the ordinary course of business at prices and on
terms and conditions not less favorable to the Borrower or such Restricted
Subsidiary, as the case may be, than could be obtained on an arms length basis
from unrelated third parties, provided that this Section shall not apply to (i)
any transaction that is permitted under Section 7.1, 7.3, 7.4 or 7.6 between or
among the Borrower and the Restricted Subsidiaries and not involving any other
affiliate, (ii) the Storm Recovery Program provided that the conditions set
forth in Section 7.3(e) have been satisfied, and (iii) any transaction that is
covered by the Inter-Affiliate Policies Agreement as in effect on the Closing
Date
 
 

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and any amendments, supplements or other modifications thereto that are required
by applicable law or by applicable Governmental Authorities.  For purposes of
this Section, the term “affiliate” means, with respect to a specified Person,
another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.
 
Section 7.8 Restrictive Agreements. The Borrower shall not, directly or
indirectly enter into, incur or permit to exist, or permit the Utility or any of
the Utility Subsidiaries so to do, any agreement or other arrangement that (i)
prohibits the ability of the Borrower, the Utility or any of the Utility
Subsidiaries to create, incur or permit to exist any Lien upon any of its
property or assets or (ii) prohibits, restricts or imposes any condition upon
the ability of the Utility or any of the Utility Subsidiaries to pay dividends
or other distributions with respect to any shares of its equity securities or to
make or repay loans or advances to the Borrower or any of the Restricted
Subsidiaries or to make investments in the Borrower or any of the Restricted
Subsidiaries or to enter into arrangements for the purpose of providing funds or
credit to the Borrower or any of the Restricted Subsidiaries, provided that (a)
the foregoing shall not apply to restrictions and conditions imposed by
corporate law or by this Loan Agreement, (b) the foregoing shall not apply to
prohibitions, restrictions and conditions existing on the Closing Date
identified on Schedule 7.8 (but shall apply to any extension, renewal, amendment
or modification expanding the scope of any such prohibition, restriction or
condition), (c) the foregoing shall not apply to restrictions and conditions
imposed on Finsub pursuant to the Storm Recovery Program Documentation,  (d)
clause (i) of this Section shall not apply to prohibitions imposed by any
agreement relating to secured Indebtedness permitted by this Loan Agreement if
such restrictions or conditions apply only to the property or assets securing
such Indebtedness, (e) clause (i) of this Section shall not apply to customary
provisions in leases restricting the assignment thereof and (f) clause (i) of
this Section shall not apply to any prohibition with respect to equity interests
(other than equity interests in the Utility or any of the Utility Subsidiaries)
owned or otherwise held by or on behalf of the Borrower, the Utility or any of
the Utility Subsidiaries imposed by any agreement entered into in connection
with a project financing.
 
Section 7.9 Permitted Hedge Agreements. The Borrower shall not enter into any
hedge agreements other than Permitted Hedge Agreements.
 
 
ARTICLE 8.
 
EVENTS OF DEFAULT
 

If any of the following events (each an “Event of Default”) shall occur:
 
(a) the Borrower shall fail to pay any principal of any Loan when and as the
same shall become due and payable, whether at the due date thereof or at a date
fixed for prepayment thereof or otherwise;
 
(b) the Borrower shall fail to pay any interest on any Loan or any fee,
commission or any other amount (other than an amount referred to in clause (a)
of this Article) payable under any Loan Document, when and as the same shall
become due and payable, and such failure shall continue unremedied for a period
of three Business Days;
 
(c) any representation or warranty made or deemed made by or on behalf of the
Borrower or any Subsidiary in or in connection with any Loan Document or any
amendment or modification hereof or waiver thereunder, or in any report,
certificate, financial statement or other
 
 

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document furnished pursuant to or in connection with any Loan Document or any
amendment or modification hereof or waiver thereunder, shall prove to have been
incorrect in any material respect when made or deemed made;
 
(d) the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Section 6.3, 6.11 or 6.12 or in Article 7;
 
(e) the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in any Loan Document to which it is a party (other than
those specified in clause (a), (b) or (d) of this Article), and such failure
shall continue unremedied for a period of 30 days after the Borrower shall have
obtained knowledge thereof;
 
(f) the Borrower or any Restricted Subsidiary shall fail to make any payment
(whether of principal, interest or otherwise and regardless of amount) in
respect of any Material Obligations when and as the same shall become due and
payable (after giving effect to any applicable grace period);
 
(g) any event or condition occurs that results in any Material Obligations
becoming due prior to their scheduled maturity or payment date, or that enables
or permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Obligations or any trustee or agent on its or
their behalf to cause any Material Obligations to become due prior to their
scheduled maturity or payment date or to require the prepayment, repurchase,
redemption or defeasance thereof prior to their scheduled maturity or payment
date (in each case after giving effect to any applicable cure period), provided
that this clause (g) shall not apply to (i) secured Indebtedness that becomes
due solely as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness or (ii) intercompany indebtedness;
 
(h) the Borrower or any of the Restricted Subsidiaries shall (i) suspend or
discontinue its business, (ii) make an assignment for the benefit of creditors,
(iii) generally not pay its debts as such debts become due, (iv) admit in
writing its inability to pay its debts as they become due, (v) file a voluntary
petition in bankruptcy, (vi) become insolvent (however such insolvency shall be
evidenced), (vii) file any petition or answer seeking for itself any
reorganization, arrangement, composition, readjustment of debt, liquidation or
dissolution or similar relief under any present or future statute, law or
regulation of any jurisdiction, (viii) petition or apply to any tribunal for any
receiver, custodian or any trustee for any substantial part of its property,
(ix) be the subject of any such proceeding filed against it which remains
undismissed for a period of 45 days, (x) file any answer admitting or not
contesting the material allegations of any such petition filed against it or any
order, judgment or decree approving such petition in any such proceeding, (xi)
seek, approve, consent to, or acquiesce in any such proceeding, or in the
appointment of any trustee, receiver, sequestrator, custodian, liquidator, or
fiscal agent for it, or any substantial part of its property, or an order is
entered appointing any such trustee, receiver, custodian, liquidator or fiscal
agent and such order remains in effect for 45 days, or (xii) take any formal
action for the purpose of effecting any of the foregoing or looking to the
liquidation or dissolution of the Borrower or any of the Restricted
Subsidiaries;
 
(i) an order for relief is entered under the United States bankruptcy laws or
any other decree or order is entered by a court having jurisdiction (i)
adjudging the Borrower or any of the Restricted Subsidiaries bankrupt or
insolvent, (ii) approving as properly filed a petition seeking reorganization,
liquidation, arrangement, adjustment or composition of or in respect of Borrower
or any of the Restricted Subsidiaries under the United States bankruptcy laws or
any other applicable Federal or state law, (iii) appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or
 
 

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other similar official) of the Borrower or any of the Restricted Subsidiaries or
of any substantial part of the property thereof, or (iv) ordering the winding up
or liquidation of the affairs of the Borrower or any of the Restricted
Subsidiaries, and any such decree or order continues unstayed and in effect for
a period of 45 days;
 
(j) one or more judgments or decrees against the Borrower or any of the
Restricted Subsidiaries or any combination thereof aggregating in excess of
$10,000,000, which judgment or decree (i) shall not be fully covered by
insurance after taking into account any applicable deductibles and (ii) shall
remain unpaid, unstayed on appeal, undischarged, unbonded or undismissed for a
period of at least 30 days;
 
(k) any Loan Document shall cease, for any reason, to be in full force and
effect or the Borrower shall so assert in writing or shall disavow any of its
obligations thereunder;
 
(l) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred,
could reasonably be expected to result in a Material Adverse Effect;
 
(m) any authorization or approval or other action by any Governmental Authority
required for the execution, delivery or performance of any Loan Document shall
be terminated, revoked or rescinded or shall otherwise no longer be in full
force and effect; or
 
(n) a Change in Control shall occur or a change in control, fundamental change
or any similar circumstance which, under the Indenture or the Utility Indenture
(including any supplemental indentures thereto but in each case only to the
extent that it is in full force and effect on the relevant date) results in an
obligation of the Borrower or the Utility to prepay, purchase, offer to
purchase, redeem or defease in excess of $5,000,000 of Indebtedness thereunder.
 
then, and in every such event (other than an event described in clause (h) or
(i) of this Article), and at any time thereafter during the continuance of such
event, the Administrative Agent may, and at the request of the Required Lenders
shall, by notice to the Borrower, take either or both of the following actions
(whether before or after the Effective Date), at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately and (ii) declare the Loans then outstanding to be due and payable in
whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
under the Loan Documents, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; and in case of any event described in clause (h)
or (i) of this Article, the Commitments shall automatically terminate
(whether  before or after the Effective Date) and the principal of the Loans
then outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued under the Loan Documents, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
 
 

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ARTICLE 9.
 
THE ADMINISTRATIVE AGENT
 

Each Credit Party hereby irrevocably appoints the Administrative Agent as its
agent and authorizes the Administrative Agent to take such actions on its behalf
and to exercise such powers as are delegated to the Administrative Agent by the
terms hereof, together with such actions and powers as are reasonably incidental
thereto.
 
The Person serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such
Person and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Borrower or any Restricted Subsidiary or
other Affiliate thereof as if it were not the Administrative Agent hereunder.
 
The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein. Without limiting the generality of the foregoing,
(i) the Administrative Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(ii) the Administrative Agent shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated by the Loan Documents that the Administrative
Agent is required to exercise in writing by the Required Lenders (or such other
number or percentage of the Credit Parties as shall be necessary under the
circumstances as provided in Section 10.2), and (iii) except as expressly set
forth herein, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to the
Borrower or any of the Subsidiaries that is communicated to or obtained by the
Person serving as Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Credit Parties as shall be necessary under the
circumstances as provided in Section 10.2) or in the absence of its own gross
negligence or willful misconduct. The Administrative Agent shall be deemed not
to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by the Borrower or a Credit Party (and,
promptly after its receipt of any such notice, it shall give each Credit Party
and the Borrower notice thereof), and the Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (a) any statement,
warranty or representation made in or in connection with any Loan Document, (b)
the contents of any certificate, report or other document delivered thereunder
or in connection therewith, (c) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth therein, (d) the
validity, enforceability, effectiveness or genuineness thereof or any other
agreement, instrument or other document or (e) the satisfaction of any condition
set forth in Article 5 or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent.
 
The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
 
 

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The Administrative Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more sub agents appointed by the
Administrative Agent, provided that no such delegation shall serve as a release
of the Administrative Agent or waiver by the Borrower of any rights hereunder.
The Administrative Agent and any such sub agent may perform any and all its
duties and exercise its rights and powers through their respective Related
Parties. The exculpatory provisions of the preceding paragraphs shall apply to
any such sub agent and to the Related Parties of the Administrative Agent and
any such sub agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as Administrative Agent.
 
Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the Credit Parties and the Borrower. Upon any such resignation, the
Required Lenders shall have the right, with the consent of the Borrower (such
consent not to be unreasonably withheld and not to be required during the
existence of an Event of Default), to appoint a successor, which successor
Administrative Agent shall be a commercial bank organized under the laws of the
United States or any State thereof and having a combined capital, surplus, and
undivided profits of at least $100,000,000.  If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on behalf of the Credit
Parties, appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Administrative Agent’s
resignation hereunder, the provisions of this Article and Section 10.3 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Administrative
Agent.
 
Each Credit Party acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Credit Party and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Loan Agreement. Each Credit Party also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Credit Party and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon any Loan
Document, any related agreement or any document furnished thereunder.
 
Anything herein to the contrary notwithstanding, none of the Book Runner,
Arrangers or Agents listed on the cover page hereof shall have any powers,
duties or responsibilities under this Loan Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent or
a Lender hereunder.
 
 

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ARTICLE 10.
 
MISCELLANEOUS
 

Section 10.1 Notices.
 
(i) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile as follows:
 
(ii) if to the Borrower, to it at 2030 Donahue Ferry Road, Pineville, LA 71360
5226; Attention: Michael Sawrie (Telephone: (318) 484-7589; Facsimile:
(318) 484-7697), website www.cleco.com;
 
(iii) if to the Administrative Agent, to it at 10 South Dearborn, 9th Floor,
Mail Code IL1-0090, Chicago, Illinois 60603, Attention of: Helen Davis
(Telephone No. (312) 732-1759; Facsimile No. (312) 732-1762;
helen.d.davis@jpmorgan.com), with a copy to 10 South Dearborn, 9th Floor, Mail
Code IL1-0090, Chicago, Illinois 60603, Attention of: Lisa Tverdek (Telephone
No. (312) 325-3150; Facsimile No. (312) 325-3238; lisa.tverdek@jpmorgan.com);
and
 
(iv) if to any other Credit Party, to it at its address (or facsimile number)
set forth in its Administrative Questionnaire.
 
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by facsimile shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient).  Notices delivered through electronic communications to the extent
provided in paragraph (b) below, shall be effective as provided in said
paragraph (b).
 
(b) Electronic Communications.  Notices and other communications to the Credit
Parties hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by the Administrative Agent, provided that the foregoing shall not
apply to notices to any Credit Party pursuant to Article  2 if such Credit Party
has notified the Administrative Agent that it is incapable of receiving notices
under such Article  by electronic communication.  The Administrative Agent or
the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.
 
Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day
 
 

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for the recipient, and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing
clause (i) of notification that such notice or communication is available and
identifying the website address therefor.
 
(c) Change of Address, Etc.  Any party hereto may change its address or
facsimile number for notices and other communications hereunder by notice to the
other parties hereto.
 
Section 10.2 Waivers; Amendments.
 
(a) No failure or delay by any Credit Party in exercising any right or power
under any Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Credit Parties under the Loan Documents are cumulative and
are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of any Loan Document or consent to any departure by the
Borrower therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan
shall not be construed as a waiver of any Default, regardless of whether any
Credit Party may have had notice or knowledge of such Default at the time.
 
(b) Neither any Loan Document nor any provision thereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders, provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan, or
reduce the rate of any interest (other than under Section 3.1(b)), or reduce any
fees, payable under the Loan Documents, without the written consent of each
Credit Party affected thereby, (iii) postpone the date of payment at stated
maturity of any Loan, any interest or any fees payable under the Loan Documents,
or reduce the amount of, waive or excuse any such payment, or postpone the
stated termination or expiration of the Commitments without the written consent
of each Credit Party affected thereby, (iv) change any provision hereof in a
manner that would alter the pro rata sharing of payments required by Section
2.9(b), without the written consent of each Credit Party affected thereby, and
(v) change any of the provisions of this Section or the definition of the term
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder, or change the currency in
which Loans are to be made or payment under the Loan Documents is to be made, or
add additional borrowers, without the written consent of each Lender, and
provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent hereunder without the prior
written consent of the Administrative Agent.
 
Section 10.3 Expenses; Indemnity; Damage Waiver.
 
(a) Cost and Expenses.  The Borrower shall pay (i) all reasonable out-of-pocket
costs and expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of each Loan
Document or any amendments, modifications or waivers of the provisions thereof
(whether or not the
 
 

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transactions contemplated thereby shall be consummated) and (ii) all reasonable
out-of-pocket costs and expenses incurred by any Credit Party, including the
reasonable fees, charges and disbursements of any counsel for any Credit Party
and any consultant or expert witness fees and expenses, in connection with the
enforcement or protection of its rights in connection with the Loan Documents,
including its rights under this Section, or in connection with the Loans made,
including all such reasonable out-of-pocket costs and expenses incurred during
any workout, restructuring or negotiations in respect of such Loans.
 
(b) Indemnification by the Borrower.  The Borrower shall indemnify each Credit
Party and each Related Party thereof (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the
reasonable fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of any Loan Document or
any agreement or instrument contemplated thereby, the performance by the parties
to the Loan Documents of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated thereby,
(ii) any Loan or the use of the proceeds thereof, (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property owned or
operated by  the Borrower or any of the Subsidiaries, or any Environmental
Liability related in any way to the Borrower or any of the Subsidiaries or (iv)
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto, provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or arising solely from claims between or among one or more
Indemnitees
 
(c) Reimbursement by Lenders.  To the extent that the Borrower fails to pay any
amount required to be paid by it to the Administrative Agent under paragraph (a)
or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent an amount equal to the product of such unpaid amount
multiplied by a fraction, the numerator of which is the sum of such Lender’s
unused Commitment plus the outstanding principal balance of such Lender’s Loans
and the denominator of which is the sum of the unused Commitments plus the
outstanding principal balance of all Loans at such time (in each case determined
as of the time that the applicable unreimbursed expense or indemnity payment is
sought or, in the event that no Lender shall have any unused Commitments or
outstanding Loans at such time, as of the last time at which any Lender had any
unused Commitments or outstanding Loans), provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as applicable,
was incurred by or asserted against the Administrative Agent in its capacity as
such.
 
(d) Waiver of Consequential Damages, etc.  To the extent permitted by applicable
law, the Borrower shall not assert, and hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct and actual damages) arising out of, in
connection with, or as a result of, any Loan Document or any agreement,
instrument or other document contemplated thereby, the Transactions or any Loan
or the use of the proceeds thereof.
 
(e) Payments.  All amounts due under this Section shall be payable promptly but
in no event later than ten days after written demand therefor.
 

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Section 10.4 Successors and Assigns
 
(a) Successors and Assigns Generally.  The provisions of this Loan Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and each Lender
and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an assignee in accordance with the provisions of
paragraph (b) of this Section, (ii) by way of participation in accordance with
the provisions of paragraph (d) of this Section or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of paragraph (f)
of this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void).  Nothing in this Loan Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
to the extent provided in paragraph (d) of this Section and, to the extent
expressly contemplated hereby, the Related Parties of each of Credit Party) any
legal or equitable right, remedy or claim under or by reason of this Loan
Agreement.
 
(b) Assignments by Lenders.  Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Loan
Agreement (including all or a portion of its Commitments and the Loans at the
time owing to it); provided that any such assignment shall be subject to the
following conditions:
 
(i) Minimum Amounts.
 
(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitments and the Loans at the time owing to it or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum
amount need be assigned; and
 
(B) in any case not described in paragraph (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date) shall not be less than $5,000,000 unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed).
 
(ii) Proportionate Amounts.  Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Loan Agreement with respect to the Loan or the Commitment
assigned.
 
(iii) Required Consents.  No consent shall be required for any assignment except
to the extent required by paragraph (b)(i)(B) of this Section and, in addition:
 
(A) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (x) an Event of Default has occurred and is
continuing at the time of such assignment or (y) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund; and
 
 

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(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments to a Person that is not a
Lender, an Affiliate of such Lender or an Approved Fund with respect to such
Lender.
 
(iv) Assignment and Assumption.  The parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee of $3,500, and the assignee, if it is not
a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.
 
(v) No Assignment to Borrower.  No such assignment shall be made to the Borrower
or any of the Borrower’s Affiliates or Subsidiaries.
 
(vi) No Assignment to Natural Persons.  No such assignment shall be made to a
natural person.
 
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to paragraph (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the assignee thereunder shall be a party to this
Loan Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this Loan
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Loan Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Loan Agreement, such Lender shall cease to be a party hereto) but shall
continue to be entitled to the benefits of Sections 3.5, 3.6, 3.7 and 10.3 with
respect to facts and circumstances occurring prior to the effective date of such
assignment.  Any assignment or transfer by a Lender of rights or obligations
under this Loan Agreement that does not comply with this paragraph shall be
treated for purposes of this Loan Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (d) of
this Section.
 
(c) Register.  The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at one of its offices in New York, New
York a copy of each Assignment and Assumption delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitments
of, and principal amounts of the Loans owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”).  The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Loan Agreement,
notwithstanding notice to the contrary.  The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.
 
(d) Participations.  Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person or the Borrower or any of the Borrower’s
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Loan Agreement (including all or a
portion of its Commitment and/or the Loans owing to it); provided that (i) such
Lender’s obligations under this Loan Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative Agent
and each Credit Party shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this Loan
Agreement.
 
 

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Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Loan Agreement and to approve any amendment, modification or waiver
of any provision of this Loan Agreement; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver with respect to the
following: described in the first proviso in Section 10.1(b) that directly
affects such Participant. Subject to paragraph (e) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Section 3.5,
3.6 and 3.7 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section.  To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 10.8 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.10(c) as though it were a Lender.
 
(e) Limitations upon Participant Rights.  A Participant shall not be entitled to
receive any greater payment under Sections Section 3.5 or 3.7 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent.  A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 3.7 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 3.7(c) as though it were a
Lender.
 
(f) Certain Pledges.  Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Loan Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
 
(g) Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to an Eligible SPC, identified as such in writing
to the Administrative Agent and the Borrower, the option to fund all or any part
of any Loan that such Granting Lender would otherwise be obligated to fund
pursuant to this Loan Agreement, provided that (i) such designation shall not be
effective unless the Borrower consents thereto (which consent shall not be
unreasonably withheld), (ii) nothing herein shall constitute a commitment by any
Eligible SPC to fund any Loan, and (iii) if an Eligible SPC elects not to
exercise such option or otherwise fails to fund all or any part of such Loan,
the Granting Lender shall be obligated to fund such Loan pursuant to the terms
hereof.  The funding of a Loan by an Eligible SPC hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such Loan were
funded by such Granting Lender.  As to any Loans or portion thereof made by it,
each Eligible SPC shall have all the rights that a Lender making such Loans or
portion thereof would have had under this Loan Agreement and otherwise, provided
that (x) its voting rights under this Loan Agreement shall be exercised solely
by its Granting Lender (y) its Granting Lender shall remain solely responsible
to the other parties hereto for the performance of such Granting Lender’s
obligations under this Loan Agreement, including its obligations in respect of
the Loans or portion thereof made by it and (z) the Borrower shall continue to
deal solely and directly with such Granting Lender in connection with the
Granting Lender’s rights and obligations under the Loan Documents.  Each
Granting Lender shall act as administrative agent for its Eligible SPC and give
and receive notices and other communications on its behalf.  Any payments for
the account of any Eligible SPC shall be paid to its Granting Lender as
administrative agent for such Eligible SPC and neither the Borrower nor the
Administrative Agent shall be responsible for any Granting Lender’s application
of such payments.  Each party hereto hereby agrees that no Eligible SPC shall be
liable for any indemnity or payment under this Loan Agreement for which a Lender
would otherwise be liable for so long as, and to the extent, the Granting Lender
 
 

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provides such indemnity or makes such payment.  Notwithstanding anything to the
contrary contained in this Loan Agreement, any Eligible SPC may (i) at any time,
subject to payment of the processing and recordation fee referred to in Section
10.4(b), assign all or a portion of its interests in any Loans to its Granting
Lender (but nothing contained herein shall be construed in derogation of the
obligation of the Granting Lender to make Loans hereunder) or to any Eligible
Assignee consented to by the Borrower and the Administrative Agent (which
consents shall not be unreasonably withheld or delayed or, in the case of the
Borrower’s consent, shall not be required during the continuance of an Event of
Default) providing liquidity and/or credit support to or for the account of such
Eligible SPC to support the funding or maintenance of Loans, and (ii) disclose
on a confidential basis any non-public information relating to its funding of
Loans to any rating agency, commercial paper dealer or provider of any surety or
guarantee or credit or liquidity enhancements  to such Eligible SPC.  This
Section may not be amended without the prior written consent of each Granting
Lender, all or any part of whose Loans is being funded by an Eligible SPC at the
time of such amendment.
 
Section 10.5 Survival. All covenants, agreements, representations and warranties
made by the Borrower herein and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this Loan Agreement or
any other Loan Document shall be considered to have been relied upon by the
other parties hereto and shall survive the execution and delivery of any Loan
Document and the making of any Loans, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that any Credit Party
may have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any fee or any other amount payable under the Loan Documents is
outstanding and unpaid and so long as the Commitments have not expired or
terminated. The provisions of Sections 3.5, 3.6, 3.7, 10.3, 10.9, 10.10 and
Article 9 shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the Loans
and the termination of the Commitments or the termination of this Loan Agreement
or any provision hereof.
 
Section 10.6 Counterparts; Integration; Effectiveness. This Loan Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which,
when taken together, shall constitute but one contract. This Loan Agreement and
any separate letter agreements with respect to fees payable to any Credit Party
or the syndication of the credit facility established hereunder constitute the
entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 5.1, this
Loan Agreement shall become effective as of the date set forth in the preamble
to this Loan Agreement when it shall have been executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of this Loan Agreement by facsimile transmission shall be effective as delivery
of a manually executed counterpart of this Loan Agreement.
 
Section 10.7 Severability. In the event any one or more of the provisions
contained in this Loan Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction).  The parties shall
endeavor in good faith negotiations to replace the invalid, illegal or
 
 

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unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
 
Section 10.8 Right of Set-off. If an Event of Default shall have occurred and be
continuing, and the acceleration of the obligations owing in connection with the
Loan Documents, or at any time upon the occurrence and during the continuance of
an Event of Default under clause (a) of Article 8, each of the Lenders and their
respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by applicable law, to set-off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other obligations at any time owing by it to or for the credit or the
account of the Borrower against any of and all the obligations of the Borrower
now or hereafter existing under this Loan Agreement and the other Loan Documents
held by it, irrespective of whether or not it shall have made any demand
therefor and although such obligations may be unmatured.  The rights of each of
the Lenders and their respective Affiliates under this Section are in addition
to other rights and remedies (including other rights of set-off) that it may
have.  Each Lender agrees promptly to notify the Borrower and the Administrative
Agent after any such set off and application made by such Lender, provided that
the failure to give such notice shall not affect the validity of such set off
and application.
 
Section 10.9 Governing Law; Jurisdiction; Consent to Service of Process.
 
(a) This Loan Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.
 
(b) The Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Loan Agreement or the other Loan Documents, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that, to the extent permitted by
applicable law, all claims in respect of any such action or proceeding may be
heard and determined in such New York State court or, to the extent permitted by
applicable law, in such Federal court. Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Loan Agreement shall affect any right that the
Administrative Agent or any other Credit Party may otherwise have to bring any
action or proceeding relating to this Loan Agreement or the other Loan Documents
against the Borrower, or any of its property, in the courts of any jurisdiction.
 
(c) The Borrower hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Loan Agreement or the other Loan Documents in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law,
the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
 
(d) The Borrower irrevocably consents to service of process in the manner
provided for notices in Section 10.1. Nothing in this Loan Agreement will affect
the right of any party to this Loan Agreement to serve process in any other
manner permitted by law.
 
 

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Cleco Corporation Loan Agreement

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Section 10.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS LOAN AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
 
Section 10.11 Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this Loan
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Loan Agreement.
 
Section 10.12 Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts that are treated as interest thereon under
applicable law (collectively the “charges”), shall exceed the maximum lawful
rate (the “maximum rate”) that may be contracted for, charged, taken, received
or reserved by the Lender holding an interest in such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all of the charges payable in respect thereof, shall be limited to
the maximum rate and, to the extent lawful, the interest and the charges that
would have been payable in respect of such Loan but were not payable as a result
of the operation of this Section shall be cumulated, and the interest and the
charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the maximum rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
 
Section 10.13 Advertisement. The Borrower hereby authorizes JPMCB to publish the
name of the Borrower and the amount of the financing evidenced hereby in any
“tombstone” or comparable advertisement which JPMCB elects to publish.  In
addition, the Borrower agrees that JPMCB may provide lending industry trade
organizations with information necessary and customary for inclusion in league
table measurements after the Effective Date.
 
Section 10.14 USA Patriot Act Notice. Each Lender that is subject to the Patriot
Act (as hereinafter defined) and the Administrative Agent (for itself and not on
behalf of any Lender) hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and
record information that identifies the Borrower, which information includes the
name and address of the Borrower and other information that will allow such
Lender or the Administrative Agent, as applicable, to identify the Borrower in
accordance with the Patriot Act.
 
Section 10.15 Treatment of Certain Information. Each Credit Party agrees to use
reasonable precautions to keep confidential, in accordance with its customary
procedures for handling confidential information of the same nature, all
non-public information supplied by the Borrower or any Subsidiary pursuant to
this Loan Agreement which (i) is clearly identified by such Person as being
confidential at the time the same is delivered to such Credit Party or (ii)
constitutes any financial
 
 

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Cleco Corporation Loan Agreement

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statement, financial projections or forecasts, budget, Compliance Certificate,
audit report, management letter or accountants’ certification delivered
hereunder (“Information”), provided that nothing herein shall limit the
disclosure of any information (a) to any of its respective Related Parties that
needs to know such information, (b) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, or requested by any
bank regulatory authority, (c) on a confidential basis, to prospective lenders
or participants or their counsel, (d) to auditors, accountants, consultants and
advisors, and any analogous counterpart thereof, (e) to any other Credit Party,
(f) in connection with any litigation to which any one or more of the Credit
Parties is a party, (g) to the extent such information (A) becomes publicly
available other than as a result of a breach of this Loan Agreement, (B) becomes
available to any of the Credit Parties on a non-confidential basis from a source
other than the Borrower or any of its Affiliates or (C) was available to the
Credit Parties on a non-confidential basis prior to its disclosure to any of
them by the Borrower or any of its Affiliates; and (h) to the extent the
Borrower shall have consented to such disclosure in writing.
 
[Signature pages follow]
 
 
 
 

 

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Cleco Corporation Loan Agreement

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IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
 
 
CLECO CORPORATION
 
By:           /s/  Darren J. Olagues                
Name:      Darren J. Olagues
Title:         Senior Vice President and Chief Financial
Officer

 

 

 

Cleco Corporation Loan Agreement

--------------------------------------------------------------------------------

 
JPMORGAN CHASE BANK, N.A., individually as
a Lender and as Administrative Agent
 
 
By:           /s/  Helen D. Davis                 
Name:      Helen D. Davis
Title:         Vice President

 

Cleco Corporation Loan Agreement

--------------------------------------------------------------------------------

 
CREDIT AGRICOLE CORPORATE AND
INVESTMENT BANK,
Individually as a Lender and as Syndication Agent
 
 
By:           /s/  Dixon Schultz                          
Name:      Dixon Schultz
Title:         Director

 
By:           /s/  Michael Willis                          
Name:      Michael Willis
Title:         Managing Director

Cleco Corporation Loan Agreement

--------------------------------------------------------------------------------

BANK OF AMERICA, N.A.
as a Lender
 
 
By:           /s/  Jacob Dowden                          
Name:      Jacob Dowden
Title:         Vice President
 
 

Cleco Corporation Loan Agreement

--------------------------------------------------------------------------------

CAPITAL ONE, N.A.
as a Lender
 
 
By:           /s/  Kermit W. Pharris, Jr.               
Name:      Kermit W. Pharris, Jr.
Title:         Vice President
 
 

Cleco Corporation Loan Agreement

--------------------------------------------------------------------------------

CLECO CORPORATION SCHEDULE 2.1

LIST OF COMMITMENTS
 

 
Lender
 
Commitment
 
JPMorgan Chase Bank, N.A.
  $ 45,000,000
 
 
Credit Agricole Corporate and Investment Bank
  $ 40,000,000
 
 
Bank of America, N.A.
  $ 35,000,000
 
 
Capital One, N.A.
  $ 30,000,000
 
 
Total:
  $
150,000,000.00
 
 

 

--------------------------------------------------------------------------------

CLECO CORPORATION CREDIT AGREEMENT
SCHEDULE 4.6

DISCLOSED MATTERS

Litigation and Regulatory Matters
 
None.
 

Environmental Matters
 
CAIR:
 
On March 10, 2005, CAIR was finalized by the EPA.  CAIR covered the District of
Columbia and 28 eastern states, including Louisiana, and provides a federal
framework requiring states to reduce emissions of SO2 and NOx.  CAIR called for
NOx reductions to begin in the year 2009 and SO2 reductions in 2010.  Louisiana
promulgated state regulations to incorporate these requirements.  The Louisiana
Department of Environmental Quality (the “LDEQ”) chose to remain under the
Federal Implementation Plan (FIP) for compliance with CAIR SO2 provisions.  It
also proposed to follow the FIP for the Annual NOx and Ozone Season NOx trading
programs with the exception of the NOx allowance allocation methodology.  This
rule has been heavily litigated by multiple parties in the case known as North
Carolina vs. EPA.  On July 11, 2008, the U.S. Court of Appeals for the D.C.
Circuit vacated CAIR.  On September 24, 2008, the EPA, industry groups and
environmental groups filed petitions with the D.C. Circuit Court, requesting a
rehearing of North Carolina vs. EPA.  On December 23, 2008, the U.S. Court of
Appeals for the D.C. Circuit ruled on these petitions filed by the EPA and
industry intervenors.  The Court granted the EPA’s petition to the extent that
the case be remanded without vacature for the agency to conduct further
proceedings consistent with the Court’s opinion in the case, and denied the
remaining petitions.  The Court determined that, notwithstanding the flaws of
CAIR, remanding it without vacature was preferable in that it preserved the
environmental benefits of the rule.  As a result, CAIR went into effect in its
entirety on January 1, 2009 and will remain in effect until the EPA re-writes
the rule to address the flaws identified by the Court in the initial CAIR
rule.  The EPA does not have a specified timeframe to complete the new rule;
however, Borrower expects it to take from one to two years to complete.
 
At this time, Borrower cannot determine what the new rule requirements will
entail.  Borrower had previously evaluated potential compliance strategies to
meet the emission reductions contemplated by the CAIR regulations.  The
installation of new low NOx burners and enhancements to the SO2 scrubber at
Dolet Hills were expected to be an integral part of meeting the CAIR NOx and SO2
reduction provisions.  Likewise, the installation of the new low NOx burners at
Rodemacher Unit 2 in 2008 will help meet CAIR NOx reduction
requirements.  Borrower will rely on its previous compliance strategy to meet
the CAIR requirements and also may include additional emission controls,
purchase of allowances, or fuel changes to enhance its compliance.
 
Borrower will monitor the development of these new regulatory requirements and
their potential impacts to Borrower.  While it is unknown at this time what the
final outcome of these regulations will be, any capital and operating costs of
additional pollution control equipment that may be required could materially
adversely affect future results of operations, cash flows, and possibly
financial condition, unless such costs could be recovered through regulated
rates or future market prices for energy.
 

--------------------------------------------------------------------------------

 
 
NAAQS / Ozone:
 
On March 12, 2008, the EPA set new National Ambient Air Quality Standards
(NAAQS) for Ozone; the new primary 8-hour ozone standard is set at 0.075 parts
per million (ppm) and the new secondary standard at a form and level identical
to the primary standard.  The previous primary and secondary standards were each
effectively set at 0.084 ppm.  The previous standard was set in 1997 and
Louisiana had five parishes in the Baton Rouge area that had not yet attained
compliance with the standards.  The LDEQ estimates that 21 additional parishes
could be in violation of the new standard, including DeSoto Parish, the location
of Borrower’s Dolet Hills Power Station.  Borrower cannot determine at this time
whether DeSoto Parish will ultimately be listed as non-attainment because much
work must be done by the LDEQ to make those non-attainment designations.  The
state must make the initial designations by June 2009, final designations by
2010 and by 2012-2013 promulgate regulations on how Louisiana will
comply.  Since NOx emissions are a precursor to ozone formation, existing fossil
fuel fired units located in or near these newly designated ozone non-attainment
areas that do not currently utilize best available control technology could be
targeted for installation of additional NOx emission controls.
 
EPA - NSR / NSPS Information Requests:
 
In February 2005, Utility received notices from the EPA requesting information
relating to the Rodemacher and Dolet Hills Power Stations.  The apparent purpose
of the investigation is to determine whether Utility has complied with New
Source Review (NSR) and New Source Performance Standards (NSPS) requirements
under the CAA in connection with capital expenditures, modifications, or
operational changes made at these facilities.  Regulated by the EPA, NSR
requires electric utilities to undergo pre-construction review for environmental
controls if new generating units are built and also applies if existing units
are modified by making “non-routine” physical or operational changes that result
in a significant increase in emissions of a regulated pollutant.  NSPS are
federal standards adopted by the EPA to regulate air emissions by many types of
industrial facilities.  The standards are intended to promote use of the best
air pollution control technologies.  Utility has completed its response to the
initial data request.  It is unknown at this time whether the EPA will take
further action as a result of the information provided by Utility and if any
such action would have a material adverse impact on Borrower’s financial
condition, results of operations, or cash flows.
 
EPA – Special Notice for Remedial Investigation and Feasibility Study (Devil’s
Swamp Lake):
 
On October 8, 2007, Utility received a Special Notice for Remedial Investigation
and Feasibility Study from the EPA.  The special notice requested that Borrower
and Utility, along with many other listed potentially responsible parties
(PRPs), enter into negotiations with the EPA for the performance of a Remedial
Investigation and Feasibility Study at an area known as the Devil’s Swamp Lake
just northwest of Baton Rouge, Louisiana.  The EPA has identified Borrower as
one of the many companies sending PCB wastes for disposal to the site.  The
Devil’s Swamp Lake site has been proposed to be added to the National Priorities
List (NPL) based on the release of PCBs to fisheries and wetlands located on the
site.  The EPA has yet to make a final determination on whether to add Devil’s
Swamp Lake to the NPL.  The EPA and a number of PRPs met on January 31, 2008,
for an organizational meeting to discuss the background of the site.  The PRPs
began discussing a potential proposal to the EPA on February 19,
2008.  Negotiations among the PRPs and the EPA are ongoing in regard to the
remedial investigation and feasibility study at the Devil’s Swamp Site, with
little progress having been made since the January 2008 meeting.  The PRPs
alleged to have disposed PCBs at the site have proposed a tentative cost sharing
formula with the facility owner to fund the remedial investigation.  The
response to the proposal has been pending for some months.  Since this
 

--------------------------------------------------------------------------------

 
 
investigation is in the preliminary stages, Borrower is unable to determine
whether the costs associated with possible remediation of the facility site will
have a material adverse effect on Borrower’s results of operations, financial
condition, and cash flows.
 

--------------------------------------------------------------------------------

CLECO CORPORATION CREDIT AGREEMENT
 
SCHEDULE 4.12

LIST OF SUBSIDIARIES

[See Attached Chart]

In addition to the attached chart, the Investment Fund (as defined in the Loan
Agreement) is an Unrestricted Subsidiary of the Borrower.  The Borrower is
entitled to 99.9% of the Investment Fund’s tax credits, net tax losses, and,
subject to certain technical allocations and depreciation deductions, profits
and losses, and U.S. Bancorp Community Development Corporation is entitled to
0.10% of such tax credits, net tax losses and, subject to certain technical
allocations and depreciation deductions, profits and losses.
 
The only Restricted Subsidiaries of the Borrower are Cleco Power LLC and Finsub
(as defined in the Loan Agreement) (i.e., Cleco Katrina/Rita Hurricane Recovery
Funding LLC).
 

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            [co_struc2.jpg]

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                  [costruc_footnotes2.jpg]

 

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CLECO CORPORATION CREDIT AGREEMENT
SCHEDULE 7.2
 

 
LIST OF EXISTING LIENS
 

 
None beyond those Liens under the Utility Mortgage and otherwise separately
permitted by Section 7.2 referring to Liens permitted by the Utility Credit
Agreement.
 
 
 
 

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CLECO CORPORATION CREDIT AGREEMENT
SCHEDULE 7.8

 
LIST OF EXISTING RESTRICTIONS
 

1)           Sections 7.3 and 7.4 of the Revolving Credit Agreement, Sections
7.2 and 7.3 of the Utility Credit Agreement, and Sections 7.2 and 7.3 of the
Utility Loan Agreement set forth restrictions on the ability of the Restricted
Subsidiaries to make investments in the Borrower or other Restricted
Subsidiaries or to make a loan or otherwise provide credit to the Borrower or
other Restricted Subsidiaries.  Section 7.6 of the Revolving Credit Agreement
restricts the ability of the Restricted Subsidiaries to repay loans to the
Borrower.  Section 7.7 of the Revolving Credit Agreement restricts all
transactions between the Restricted Subsidiaries and the Borrower.

2)           Section 3.04 of the Insurance Agreement by the Utility and Ambac
Insurance Company dated as of February 8, 2002 sets forth restrictions on the
ability of the Utility to acquire the stock of other persons including the
Borrower or other Restricted Subsidiaries.  A copy of that section is attached.

Attachment:
 
Attached hereto is Section 3.04 of the Insurance Agreement referenced above.

--------------------------------------------------------------------------------

 
INSURANCE AGREEMENT
 

INSURANCE AGREEMENT dated as of February 8, 2002 by and between Cleco Power LLC,
a limited liability company duly organized and existing under the laws of the
State of Louisiana (the “Company”) and Ambac Assurance Corporation, a
Wisconsin-domiciled stock insurance company (“Ambac”).

W I T N E S S E T H:

WHEREAS, pursuant to an Indenture, dated as of October 1, 1988 (as amended or
supplemented, the “Indenture”), by and between the Company (as successor to
Cleco Utility Group Inc.) and The Bank of New York (as successor to Bankers
Trust Company), as trustee (the “Trustee”), the Company will issue $25,000,000
in aggregate principal amount of its 6.125% Insured Quarterly Notes due March 1,
2017 (the “Notes”); and

WHEREAS, Ambac will issue a Financial Guaranty Insurance Policy (the “Policy”)
pursuant to which Ambac will insure the timely payment of regularly scheduled
principal of and interest on the Notes; and

WHEREAS, to induce Ambac to issue the Policy, the Company has agreed to pay the
premium for such Policy and to reimburse Ambac for all payments made by Ambac
under the Policy, all as more fully set forth in this Agreement; and

WHEREAS, the Company understands that Ambac expressly requires the delivery of
this Agreement as part of the consideration for the delivery by Ambac of the
Policy;

NOW, THEREFORE, in consideration of the premises and of the agreements herein
contained and of the execution and delivery of the Policy, the Company and Ambac
agree as follows:

 

--------------------------------------------------------------------------------

Section 3.04.  Disposition of Assets.  So long as any Notes remain outstanding
or any Reimbursement Obligations remain unpaid, the Company shall not dispose of
all or any part of its Property, or enter into any sale-leaseback transaction,
or purchase or otherwise acquire (in one or a series of related transactions)
any part of the Property (other than purchases or other acquisitions of
inventory, materials, equipment and similar Property in the ordinary course of
business) of any Person, including acquisitions of the stock of any Person, or
permit any of the Material Subsidiaries so to do, except:

(a)    sales or other dispositions of inventory in the ordinary course of
business;
 
(b)    sales of accounts receivables and other receivables;
 
(c)    Asset Sales, provided that (i) no Event of Default shall exist
immediately before or after giving effect thereto and (ii) the amount of such
Asset Sale, when added to the total amount of all Asset Sales made by the
Company and the Material Subsidiaries during the immediately preceding twelve
month period, shall not exceed 10% or more of Material Total Assets as of the
first day of such twelve month period; provided, however, that sales or other
dispositions pursuant to Section 3.04(d) hereof shall not be included in making
such calculation; and
 
(d)             sales or other dispositions of ownership, possession or control
of the Company’s Transmission Assets that (i) are required by statute, order,
rule, regulation or other applicable law or (ii) as a result of any statute,
order, rule, regulation or other applicable law would be necessary to avoid a
material adverse effect on the Company’s financial condition or operations.

--------------------------------------------------------------------------------

CLECO CORPORATION EXHIBIT A
 
FORM OF ASSIGNMENT AND ASSUMPTION
 
This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between
[the][each]1 Assignor identified in item 1 below ([the][each, an] “Assignor”)
and [the][each]2 Assignee identified in item 2 below ([the][each, an]
“Assignee”).  [It is understood and agreed that the rights and obligations of
[the Assignors][the Assignees]3 hereunder are several and not
joint.]4  Capitalized terms used but not defined herein shall have the meanings
given to them in the Loan Agreement identified below (as amended, modified or
otherwise supplemented from time to time, the “Loan Agreement”), receipt of a
copy of which is hereby acknowledged by [the][each] Assignee.  The Standard
Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to
and incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.
 
For an agreed consideration, [the][each] Assignor hereby irrevocably sells and
assigns to [the Assignee][the respective Assignees], and [the][each] Assignee
hereby irrevocably purchases and assumes from [the Assignor][the respective
Assignors], subject to and in accordance with the Standard Terms and Conditions
and the Loan Agreement, as of the Effective Date inserted by the Administrative
Agent as contemplated below (i) all of [the Assignor’s][the respective
Assignors’] rights and obligations in [its capacity as a Lender][their
respective capacities as Lenders] under the Loan Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of [the Assignor][the respective Assignors] under the
facility identified below and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of [the
Assignor (in its capacity as a Lender)][the respective Assignors (in their
respective capacities as Lenders)] against any Person, whether known or unknown,
arising under or in connection with the Loan Agreement, any other documents or
instruments delivered pursuant thereto or the loan transactions governed thereby
or in any way based on or related to any of the foregoing, including, but not
limited to, contract claims, tort claims, malpractice claims, statutory claims
and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to clause (i) above (the rights and obligations sold
and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses
(i) and (ii) above being referred to herein collectively as [the][an] “Assigned
Interest”).  Each such sale and assignment is without recourse to [the][any]
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by [the][any] Assignor.
 
1.      Assignor[s]:                                                         
                                           
             
2.      Assignee[s]:                                                         
                                                                

 
[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]
 
3.      Borrower:         Cleco Corporation, a Louisiana Corporation.
 
4.      Administrative Agent: JPMorgan Chase Bank, N.A., as the administrative
agent under the Loan Agreement.
 
 
 
 
 
 
 
 

--------------------------------------------------------------------------------

 
1 For bracketed language here and elsewhere in this form relating to the
Assignor(s), if the assignment is from a single Assignor, choose the first
bracketed language.  If the assignment is from multiple Assignors, choose the
second bracketed language.
 
2 For bracketed language here and elsewhere in this form relating to the
Assignee(s), if the assignment is to a single Assignee, choose the first
bracketed language.  If the assignment is to multiple Assignees, choose the
second bracketed language.
 
3 Select as appropriate.
 
4 Include bracketed language if there are either multiple Assignors or multiple
Assignees.
 
 
 
Cleco Corporation Assignment and Assumption

--------------------------------------------------------------------------------

 
 
 
5.      Loan Agreement: The Loan Agreement, dated as of February 19, 2010 (as
amended and in effect on the date hereof, the “Loan Agreement”), by and among
Cleco Corporation, the Lenders party thereto and JPMorgan Chase Bank, N.A. as
Administrative Agent.
 
6.           Assigned Interest[s]:
 
Assignor[s]5
Assignee[s]6
Facility
Assigned
 
 
Aggregate
Amount of
Commitment/Loans
for all Lenders7
Amount of
Commitment/Loans
Assigned8
Percentage
Assigned of
Commitment/Loans8
   
Term
$_______________
$______________
____%
 

 
[7.      Trade Date:                      _____ __, 20__]9
 
 
 
 
 
 
 

--------------------------------------------------------------------------------

   
5 List each Assignor, as appropriate.
 
6 List each Assignee, as appropriate.
 
7 Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the Trade Date and the Effective Date.
 
8 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.
 
9 To be completed if the Assignor(s) and the Assignee(s) intend that the minimum
assignment amount is to be determined as of the Trade Date.

-2-
Cleco Corporation Assignment and Assumption
 
 

--------------------------------------------------------------------------------

 

Effective Date:   _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]
 
The terms set forth in this Assignment and Assumption are hereby agreed to:
 

                      ASSIGNOR[S]10

 
[NAME OF ASSIGNOR]

                      By:                                                     
                            Title:                      
                                         
 
 
[NAME OF ASSIGNOR]

                        
By:                                                      
                         Title:                      
                                         
 
                      ASSIGNEE[S]11
 
[NAME OF ASSIGNEE]

                        
By:                                                     
                         Title:                    
                                           
 
 
[NAME OF ASSIGNEE]

                        
By:                                                     
                         Title:                        
                                       
 
[Consented to and]12 Accepted:

JPMORGAN CHASE BANK, N.A., as Administrative Agent

By:                                                                
  Title:                        
                                                  

 
 
 
 

--------------------------------------------------------------------------------

 
10 Add additional signature blocks as needed.
 
11 Add additional signature blocks as needed.
 
12 To be added only if the consent of the Administrative Agent is required by
the terms of the Loan Agreement.

-3-
Cleco Corporation Assignment and Assumption
 
 

--------------------------------------------------------------------------------

 

[Consented to:]13

[NAME OF RELEVANT PARTY]

By:                                                     
Title:                                                     

 
 
 

--------------------------------------------------------------------------------

 
13 To be added only if the consent of the Borrower and/or other parties is
required by the terms of the Loan Agreement.

- 4 -
Cleco Corporation Assignment and Assumption
 
 

--------------------------------------------------------------------------------

 

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
 
1.      Representations and Warranties
 
1.1           Assignor[s].  [The][Each] Assignor (a) represents and warrants
that (i) it is the legal and beneficial owner of [the][the relevant] Assigned
Interest, (ii) [the][such] Assigned Interest is free and clear of any lien,
encumbrance or other adverse claim and (iii) it has full power and authority,
and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby; and (b)
assumes no responsibility with respect to (i) any statements, warranties or
representations made in or in connection with the Loan Agreement or any other
Loan Document14, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Documents or any collateral
thereunder, (iii) the financial condition of the Borrower, any of its
Subsidiaries or Affiliates or any other Person obligated in respect of any Loan
Document or (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.
 
1.2           Assignee[s]. [The][Each] Assignee (a) represents and warrants that
(i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby and to become a Lender under the Loan
Agreement, (ii) it meets all the requirements to be an assignee under
Section 10.4(b)(iii), (v) and (vi) of the Loan Agreement (subject to such
consents, if any, as may be required under Section 10.4(b)(iii) of the Loan
Agreement), (iii) from and after the Effective Date, it shall be bound by the
provisions of the Loan Agreement as a Lender thereunder and, to the extent of
[the][the relevant] Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it is sophisticated with respect to decisions to acquire assets
of the type represented by the Assigned Interest and either it, or the person
exercising discretion in making its decision to acquire the Assigned Interest,
is experienced in acquiring assets of such type, (v) it has received a copy of
the Loan Agreement, and has received or has been accorded the opportunity to
receive copies of the most recent financial statements delivered pursuant to
Section 6.1 thereof, as applicable, and such other documents and information as
it deems appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase [the][such] Assigned Interest,
(vi) it has, independently and without reliance upon the Administrative Agent or
any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase [the][such] Assigned Interest, and
(vii) if it is a Foreign Lender15, attached to the Assignment and Assumption is
any documentation required to be delivered by it pursuant to the terms of the
Loan Agreement, duly completed and executed by [the][such] Assignee; and (b)
agrees that (i) it will, independently and without reliance on the
Administrative Agent, [the][any] Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.
 
 
 
 
 

--------------------------------------------------------------------------------

14 The term “Credit Document” should be conformed to that used in the Loan
Agreement.
 
15 The concept of  “Foreign Lender” should be conformed to the section in the
Loan Agreement governing withholding taxes and gross-up.
 
 
 
Cleco Corporation Assignment and Assumption
 
 

--------------------------------------------------------------------------------

 
 
 
2.      Payments. [From and after the Effective Date, the Administrative Agent
shall make all payments in respect of the Assigned Interest (including payments
of principal, interest, fees and other amounts) to the Assignee whether such
amounts have accrued prior to or on or after the Effective Date.  The Assignor
and the Assignee shall make all appropriate adjustments in payments by the
Administrative Agent for periods prior to the Effective Date or with respect to
the making of this assignment directly between themselves.]  [From and after the
Effective Date, the Administrative Agent shall make all payments in respect of
the Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignor for amounts which have accrued to but excluding the
Effective Date and to the Assignee for amounts which have accrued from and after
the Effective Date.]16
 
3.      General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns.  This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one
instrument.  Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption.  This
Assignment and Assumption shall be governed by, and construed in accordance
with, the law of the State of New York.
 

 

--------------------------------------------------------------------------------

   
16      Administrative Agent to select first or second alternative.
 
 
 

-2-
Cleco Corporation Assignment and Assumption
 
 

--------------------------------------------------------------------------------

 

CLECO CORPORATION EXHIBIT B
 

 
FORM OF OPINION OF COUNSEL
 
 

 
February 19, 2010
 
To the Parties Listed on
 
Schedule A Attached Hereto
 
Re:           Cleco Corporation: 2010 Loan
Agreement                                                                                                                   15668-57
 
Ladies and Gentlemen:
 
We have acted as counsel to Cleco Corporation, a Louisiana corporation (the
“Borrower”), and Cleco Power LLC, a Louisiana limited liability company, in
connection with that certain Loan Agreement, dated of even date herewith (the
“Agreement”) by and among the Borrower, the Lenders party thereto, and JPMorgan
Chase Bank, N.A., as Administrative Agent, and the transactions contemplated
thereby.  This Opinion is furnished to you pursuant to Section 5.1(c) of the
Agreement.
 
Capitalized terms that are defined in the Agreement but are not defined herein
shall have the meanings ascribed to them in the Agreement.
 
In connection with the foregoing and the delivery of this Opinion, we have
examined (i) executed copies of the Agreement and of four (4) Notes, one to each
Lender (the Agreement and such Notes being collectively, the “Loan Documents”),
(ii) the Borrower’s Articles of Incorporation and its Bylaws, each as amended to
the date hereof, (iii) the agreements and instruments listed to us by the
Borrower, or which have been filed by the Borrower or Cleco Power LLC with the
Securities and Exchange Commission as an exhibit to any Registration Statement
filed pursuant to the Securities Act of 1933, as amended, or as an exhibit to
any periodic report filed pursuant to the Securities Exchange Act of 1934, as
amended, in each case that relate to the borrowing of funds to which either it
or Cleco Power LLC is bound or any of its or Cleco Power LLC’s properties is
subject, which agreements and instruments are listed in Exhibit A to this
opinion (the “Material Debt Instruments”), and (iv) those records of the
corporate proceedings of the Borrower as we have deemed necessary as a basis for
the opinions hereinafter expressed, including proceedings relative to the Loan
Documents.
 
We also have examined originals or copies, certified or otherwise identified, of
all respective records, documents and instruments of the Borrower, certificates
of public officials, certificates of officers of the Borrower and other Persons,
and all other documents, certificates and corporate or other records as we have
deemed necessary as a basis for the opinions hereinafter expressed.  In our
examination, we have assumed the genuineness of all signatures (other than those
of the Borrower), the authenticity of all documents submitted to us as
originals, the conformity with the originals (and the authenticity of such
originals) of all documents submitted to us as copies, the due organization of
each Credit Party, the due authorization, execution and delivery of the
Agreement by the Credit Parties and that the Credit Parties have the power and
authority to execute, deliver and perform their respective obligations under the
Loan
 
 
Cleco Corporation Opinon of Counsel
 
 

--------------------------------------------------------------------------------

 
 
To the Parties Listed on
Schedule A Attached Hereto
February 19, 2010
Page 4
 
Documents.  We have further assumed that there are no documents or agreements
among the Credit Parties and the Borrower (or any lesser combination of said
parties) which alter the provisions of any of the Loan Documents and which would
have an effect on the opinions expressed in this Opinion letter.  With respect
to factual matters material to our opinion, we also have relied upon the
representations contained in the Agreement and upon certificates of
representatives of the Borrower.
 
Based upon and subject to the foregoing and the assumptions, exceptions,
limitations and qualifications expressed below, and having regard for such legal
considerations as we deem relevant, we are of the opinion that:
 
I.  
The Borrower is duly incorporated and validly existing and in good standing
under the laws of the State of Louisiana and has all requisite corporate power
and authority to own its properties and to carry on its business as now
conducted.  To our knowledge, the Borrower has only the Subsidiaries set forth
on Schedule 4.12 to the Agreement, which Schedule identifies Cleco Power LLC and
Cleco Katrina/Rita Hurricane Recovery Funding LLC as the only Restricted
Subsidiaries.  Cleco Power LLC is duly formed and validly existing under the
laws of the State of Louisiana and has all requisite limited liability company
power and authority to own its properties and to carry on its business as now
conducted.

 
II.  
The Borrower has the corporate power and authority to enter into, execute,
deliver and perform the terms of the Loan Documents and to incur the obligations
provided for in the Notes, all of which (i) have been duly authorized by all
necessary corporate action on the part of the Borrower, and (ii) are in full
compliance with the Borrower’s Articles of Incorporation and its Bylaws, each as
amended to the date hereof, or its other organization documents.

 
III.  
The choice of New York law stipulated to govern the Loan Documents is a valid
and effective choice of law under the laws of the State of Louisiana, and will
be enforced by a court of competent jurisdiction in the State of Louisiana,
except (i) to the extent the chosen (New York) law contravenes the public policy
of the state whose law otherwise would be applicable under the State of
Louisiana’s choice of law principles (generally, as to contractual issues other
than capacity or form, the law of the state whose policies would be most
seriously impaired if its law were not applied to that issue), and (ii) insofar
as federal laws may apply.  If the choice of New York law set forth in the Loan
Documents is disregarded and internal Louisiana law applied, then the Loan
Documents would be the valid and legally binding obligations of the Borrower,
enforceable against it in accordance with the respective terms thereof.

 
IV.  
Except as set forth on Schedule 4.6 (Disclosed Matters) to the Agreement, to our
knowledge there are no actions, suits or proceedings at law or in equity or by
or before any Governmental Authority pending or threatened against the Borrower
or Cleco Power LLC which (i) call into question the validity or enforceability
of any of the Loan Documents, or (ii) could reasonably be expected to result in
the rescission, termination or cancellation of any material franchise, right,
license, permit or similar authorization held by the Borrower or Cleco Power
LLC.

 
V.  
Except for informational filings required to be made in the ordinary course of
business (which are not a condition to the Borrower’s performance under the Loan
Documents), no consent,

 
Cleco Corporation Opinon of Counsel
 
 

--------------------------------------------------------------------------------

 
 
To the Parties Listed on
Schedule A Attached Hereto
February 19, 2010
Page 5
 
 
 
authorization or approval of, filing with, notice to, or exemption by,
stockholders, any Governmental Authority or any other Person (other than (i) the
Bank of New York Mellon, as administrative agent under Borrower’s First Amended
and Restated Credit Agreement dated as of June 2, 2006 and (ii) the Borrower’s
Board of Directors, both of which have been obtained) is required to authorize,
or is required in connection with, the execution, delivery and performance by
the Borrower of the Loan Documents or is required as a condition to the validity
or enforceability of the Loan Documents in accordance with their terms.

 
 
VI.  
Neither the execution and delivery of the Loan Documents by the Borrower nor the
performance by the Borrower of its agreements therein will (i) violate the
Borrower’s Articles of Incorporation or its Bylaws, each as amended to date,
(ii) breach or result in a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon the properties of the
Borrower under, any existing obligation of the Borrower under any Material Debt
Instrument, (iii) breach or otherwise violate any judicial or administrative
order, writ, judgment, or decree of any Governmental Authority having
jurisdiction over the Borrower or its properties that is in effect on the date
hereof and that has been identified to us by the Borrower in the course of our
inquiry to the Borrower with respect to the transactions contemplated by the
Loan Documents and that the Borrower has certified to us may reasonably be
expected to have a Material Adverse Effect, or (iv) violate any statute in
effect on the date hereof, or published rule or regulation in effect on the date
hereof applicable to the Borrower of any Governmental Authority having
jurisdiction over the Borrower or its properties.

 
VII.  
Neither the Borrower nor Cleco Power LLC is an “investment company” or a company
“controlled” by an “investment company” as defined in, or otherwise subject to
regulation under, the Investment Company Act of 1940, as amended.

 
VIII.  
To our knowledge, the Borrower is not engaged principally in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.

 
   The foregoing opinions are subject to and qualified by the following:
 
A.  
All opinions, to the extent they relate to the enforceability of any agreement
or obligation, or to the extent they relate to the lawfulness of any obligations
undertaken or agreed to be undertaken by the Borrower, are subject to and
qualified by the following:

 
1.  
We do not express any opinion as to the effect and application of bankruptcy,
insolvency, reorganization, receivership, moratorium, fraudulent conveyance or
transfer, equitable subordination and other similar laws now or hereafter in
effect which relate to or limit creditors’ rights and remedies generally; and

 
2.  
We do not express any opinion as to the effect and application of general
principles of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, whether considered in a proceeding
in equity or an action at law; and

 
 
Cleco Corporation Opinon of Counsel
 
 

--------------------------------------------------------------------------------

 
 
To the Parties Listed on
Schedule A Attached Hereto
February 19, 2010
Page 6
 
 
3.  
We do not express any opinion as to the validity, performance, enforceability or
lawfulness under Louisiana law of the following provisions in the Loan Documents
(and likewise, we express no opinion whether a court applying Louisiana law
would give effect to the choice of New York law as governing the validity,
performance, enforceability or lawfulness of the Loan Documents as to the
following provisions):  (a) the availability of any equitable remedies
(regardless of whether enforcement is sought in a proceeding in equity or at
law); (b) any waivers or consents under the Loan Documents relating to the
rights of the Borrower, or any duties owing to it, existing as a matter of law,
except to the extent the Borrower may so waive or consent as a matter of law;
(c) the severability provisions set forth in any of the Loan Documents; (d) any
releases contained in the Loan Documents relating to unmatured claims; (e) any
provision in the Loan Documents according to which the Loan Documents may be
amended or waived only in writing, including without limitation provisions
authorizing the delay or failure to exercise a right without waiving such right;
(f) irrevocable appointments of any party as agent or attorney-in-fact for any
other party; (g) waivers of judicial service of process and the right to a jury
trial, objections to venue and forum, provisions for default judgment and the
submissions of any party to jurisdiction; (h) provisions which purport to
establish that funds or other property are or will be held by any party in trust
for any other party; (i) indemnities against or limitations of liability for
intentional or gross fault, strict liability or violations of securities laws;
(j) waivers of claims, counterclaims, defenses and damages not now known or in
existence; (k) provisions which state that enumerated remedies are not exclusive
or that a party has the right to pursue multiple remedies without regard to
other remedies elected or that all remedies are cumulative; (l) provisions which
permit the exercise, under certain circumstances, of rights without notice or
without providing opportunity to cure failures to perform; (m) agreements as to
rights of set off otherwise than in accordance with applicable law; (n) waivers
of consequential damages; (o) provisions which purport to make or would have the
effect of making obligations enforceable notwithstanding the invalidity or
unenforceability of contracts or the bad faith acts or omissions of the obligee;
(p) provisions for the reinstatement or revival of documents or the restoration
of obligations thereunder after judicial proceedings pertaining thereto are
abandoned or discontinued; (q) provisions which purport to make a judgment
binding and conclusive even if the principles of res judicata or collateral
estoppel are not met; and (r) provisions which purport to establish evidentiary
standards or the conclusiveness or reasonableness of determinations, actions, or
evidence; and

 
4.  
Without limiting the generality of the foregoing, we express no opinion herein
as to the validity, performance, enforceability or lawfulness of the Loan
Documents under New York law.

 
 
Cleco Corporation Opinon of Counsel
 
 

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To the Parties Listed on
Schedule A Attached Hereto
February 19, 2010
Page 7
 
 
B.  
We do not express any opinion as to the effect of noncompliance by any Credit
Party with any federal, state or local law, rule, regulation or ordinance.

 
C.  
Wherever we have asserted above that a matter is “to our knowledge,” or used the
phrase “known to us,” our knowledge is limited to the actual knowledge of those
attorneys in our office who have prepared or signed this Opinion or been
actively involved in assisting in advising the Borrower in connection with the
execution and delivery of the Loan Documents, without any independent
investigation by any lawyer of this firm.

 
We are members of the Bar of the State of Louisiana, and express no opinion as
to matters which may be governed by the laws of any jurisdiction other than
Louisiana and the federal laws of the United States of America.
 
The opinions contained herein are given only as of the date of this Opinion
letter.  This Opinion is based upon our professional knowledge and judgment, and
shall not be construed as a guaranty, nor is it a warranty that a court
considering the matters discussed herein would not rule in a manner contrary to
the opinions expressed above.  No opinion is expressed as to the effect of any
future acts of the parties or changes in existing law.  We undertake no
responsibility and disclaim any obligation to advise you or any other Person of
any change after the date hereof in the law or the facts presently in effect
even though such change may alter the scope or substance of the opinions herein
expressed or affect the legal or factual statements or assumptions herein.
 
This Opinion may be relied upon solely by the Credit Parties, and their
respective successors and assigns (but only as of the date hereof) in connection
with the transactions contemplated by the Loan Documents; provided, that we
express no opinion with respect to any issue arising out of or related to the
identity or status of any assignee or participant of any Credit Party. Other
than as provided in the preceding sentence, the opinions rendered herein may not
be used for any other purpose or relied upon by any other Person or used,
circulated, quoted or otherwise referred to without our express prior written
consent; provided, that this Opinion may be circulated to regulators of the
Credit Parties, to prospective assignees and participants of the Lenders and, to
the extent permitted by applicable law, if notice is promptly provided to this
firm, in connection with litigation involving any of the transactions
contemplated by the Loan Documents.
 
 
                   Very truly yours,
 
 
 
                   Phelps Dunbar, L.L.P.
 
 
 

Cleco Corporation Opinion of Counsel
 
 

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SCHEDULE A
 
JPMorgan Chase Bank, N.A.
 
Credit Agricole Corporate and Investment Bank
 
Bank of America, N.A.
 
Capital One, N.A.
 

 

Cleco Corporation Opinion of Counsel
 
 

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EXHIBIT A

 
Material Debt Instruments
 
Cleco Corporation:

1.
First Amended and Restated Credit Agreement with The Bank of New York (now The
Bank of New York Mellon), dated as of June 2, 2006, as amended and supplemented
pursuant to that certain Consent No. 1 dated as of August 22, 2008, the
Amendment No. 1 and Waiver No. 1 dated as of August 18, 2009, and the Consent
No. 2 and Waiver No. 2 dated as of February 16, 2010

 
2.
Indenture, dated May 1, 2000, as supplemented and amended by the Supplemental
Indenture No. 1 dated as of May 25, 2000 and the Supplemental Indenture No. 2
dated as of April 28, 2003

 
3.
$10,000,000.00 promissory note with Capital One, National Association, dated May
27, 2009

 

Cleco Power LLC:
 
1.
First Amended and Restated Credit Agreement with The Bank of New York (now The
Bank of New York Mellon), dated as of June 2, 2006, as amended and supplemented
pursuant to that certain Amendment No. 1 and Waiver No. 1 dated as of August 18,
2009

 
2.
Indenture of Mortgage, dated as of July 1, 1950, between Central Louisiana
Electric Company, Inc. (now Cleco Power LLC) and The National Bank of Commerce
in New Orleans (now J.P. Morgan Trust Company, N.A.), as Trustee, as amended by
the First through Twenty-Ninth Supplemental Indentures

 
3.
Indenture, dated as of October 1, 1988, between Central Louisiana Electric
Company, Inc. (now Cleco Power LLC) and Bankers Trust Company (now The Bank of
New York Mellon), as Trustee, as amended by the First through Tenth Supplemental
Indentures

 
4.
Insurance Agreement, dated as of February 8, 2002, between Cleco Power LLC and
Ambac Assurance Corporation

 
5.
Refunding Agreement, dated as of July 1, 1999, between The Industrial
Development Board of the Parish of Rapides, Inc. and Cleco Utility Group Inc.
(now Cleco Power LLC), as amended by First Amendment dated as of December 1,
2000

 
6.
Continuing Disclosure Agreement, dated September 2, 1999, between Cleco Utility
Group Inc. (now Cleco Power LLC) and Bank One Trust Company, N.A. (now J.P.
Morgan Trust Company, N.A.)

 
7.
Insurance Agreement, dated as of July 1, 1999, between Cleco Utility Group Inc.
(now Cleco Power LLC) and Ambac Assurance Corporation

 
8.
Refunding Agreement, dated as of July 1, 1999, between Parish of DeSoto, State
of Louisiana and Cleco Utility Group Inc. (now Cleco Power LLC), as amended by
First Amendment dated as of December 1, 2000

 
Cleco Corporation Opinion of Counsel
 
 

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SCHEDULE A
PAGE -3-
 
 
9.
Continuing Disclosure Agreement, dated September 2, 1999, between Cleco Utility
Group Inc. (now Cleco Power LLC) and Bank One Trust Company, N.A. (now J.P.
Morgan Trust Company, N.A.)

 
10.
Insurance Agreement, dated as of July 1, 1999, between Cleco Utility Group Inc.
(now Cleco Power LLC) and Ambac Assurance Corporation

 
11.
$10,000,000.00 promissory note with Capital One, National Association, dated May
27, 2009

 
12.
Loan Agreement, dated as of November 1, 2006, between the Rapides Finance
Authority and Cleco Power LLC, in connection with the $60,000,000.00 Rapides
Finance Authority Revenue Bonds (Cleco Power LLC Project) Series 2006

 
13.
Note dated November 21, 2006 by Cleco Power LLC in favor of the Rapides Finance
Authority, in connection with the $60,000,000.00 Rapides Finance Authority
Revenue Bonds (Cleco Power LLC Project) Series 2006

 
14.
Continuing Disclosure Agreement dated November 21, 2006, between Cleco Power LLC
and The Bank of New York Trust Company, N.A., as trustee, in connection with the
$60,000,000.00 Rapides Finance Authority Revenue Bonds (Cleco Power LLC Project)
Series 2006

 
15.
Insurance Agreement dated as of November 1, 2006, between Cleco Power LLC and
Ambac Assurance Corporation, in connection with the $60,000,000.00 Rapides
Finance Authority Revenue Bonds (Cleco Power LLC Project) Series 2006

 
16.
Loan Agreement dated as of November 1, 2007 between the Rapides Finance
Authority and Cleco Power LLC, in connection with the $60,000,000.00 Rapides
Finance Authority Revenue Bonds (Cleco Power LLC Project) Series 2007

 
17.
Note dated November 19, 2007 by Cleco Power LLC in favor of the Rapides Finance
Authority, in connection with the $60,000,000.00 Rapides Finance Authority
Revenue Bonds (Cleco Power LLC Project) Series 2007

 
18.
Continuing Disclosure Agreement dated as of November 19, 2007, between Cleco
Power LLC and The Bank of New York Trust Company, N.A., as trustee, in
connection with the $60,000,000.00 Rapides Finance Authority Revenue Bonds
(Cleco Power LLC Project) Series 2007

 
19.
Insurance Agreement dated as of November 19, 2007, between Cleco Power LLC and
Financial Guaranty Insurance Company, in connection with the $60,000,000.00
Rapides Finance Authority Revenue Bonds (Cleco Power LLC Project) Series 2007

 
20.
Remarketing Agreement dated March 6, 2008, among Cleco Power LLC and Goldman,
Sachs & Co., on its own behalf and as representative of the Remarketing Agents
named therein, being Goldman, Sachs & Co., J.P. Morgan Securities Inc. and BNY
Capital Markets, Inc., in connection with the $60,000,000.00 Rapides Finance
Authority Revenue Bonds (Cleco Power LLC Project) Series 2007

 
21.
Loan Agreement dated as of October 1, 2008 between the Rapides Finance Authority
and Cleco Power LLC, in connection with the $32,000,000.00 Rapides Finance
Authority Revenue Bonds (Cleco Power LLC Project) Series 2008

 
 
 
Cleco Corporation Opinion of Counsel
 
 

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SCHEDULE A
PAGE -4-
 
 
22.
Note dated October 2, 2008 by Cleco Power LLC in favor of the Rapides Finance
Authority, in connection with the $32,000,000.00 Rapides Finance Authority
Revenue Bonds (Cleco Power LLC Project) Series 2008

 
23.
Continuing Disclosure Agreement dated as of October 2, 2008 between Cleco Power
LLC and The Bank of New York Mellon Trust Company, N.A., as trustee, in
connection with the $32,000,000.00 Rapides Finance Authority Revenue Bonds
(Cleco Power LLC Project) Series 2008

 
24.
Remarketing Agreement dated as of October 2, 2008, between Cleco Power LLC and
Goldman Sachs & Co., as Remarketing Agent, in connection with the $32,000,000.00
Rapides Finance Authority Revenue Bonds (Cleco Power LLC Project) Series 2008

 
25.
Loan Agreement dated as of December 1, 2008, between the Louisiana Public
Facilities Authority and Cleco Power LLC, in connection with the $100,000,000.00
Louisiana Public Facilities Authority Revenue Bonds (Cleco Power LLC Project)
Series 2008

 
26.
Note dated December 10, 2008, by Cleco Power LLC in favor of the Louisiana
Public Facilities Authority, in connection with the $100,000,000.00 Louisiana
Public Facilities Authority Revenue Bonds (Cleco Power LLC Project) Series 2008

 
27.
Continuing Disclosure Agreement dated as of December 10, 2008, between Cleco
Power LLC and The Bank of New York Mellon Trust Company, N.A., as trustee, in
connection with the $100,000,000.00 Louisiana Public Facilities Authority
Revenue Bonds (Cleco Power LLC Project) Series 2008

 
28.
Underwriting Agreement dated December 3, 2008, among the Louisiana Public
Facilities Authority, the Louisiana State Bond Commission, Cleco Power LLC, and
KeyBank Capital Markets Inc. and Morgan Keegan & Company, Inc., in connection
with the $100,000,000.00 Louisiana Public Facilities Authority Revenue Bonds
(Cleco Power LLC Project) Series 2008

 
29.
Remarketing Agreement dated as of December 10, 2008, between Cleco Power LLC and
KeyBank Capital Markets Inc. and Morgan Keegan & Company, Inc., as Remarketing
Agents, in connection with the $100,000,000.00 Louisiana Public Facilities
Authority Revenue Bonds (Cleco Power LLC Project) Series 2008

 
30.
Storm Recovery Property Servicing Agreement dated as of March 6, 2008, between
Cleco Katrina/Rita Hurricane Recovery Funding LLC, as Issuer, and Cleco Power
LLC, as Servicer

 
31.
Loan Agreement dated as of August 19, 2009, among Cleco Power LLC, the lenders
party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent

 
 

Cleco Corporation Opinion of Counsel
 
 

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CLECO CORPORATION EXHIBIT C
 
FORM OF INITIAL BORROWING REQUEST
 

                [Date]

JPMorgan Chase Bank, N.A., as Administrative Agent
10 South Dearborn, 9th Floor,
Mail Code IL1-0090, Chicago, IL 60603
Attention:   Helen D. Davis
Fax: 312 732 1762
Phone:  312-732-1759
E-mail:   helen.d.davis@jpmorgan.com

JPMorgan Chase Bank, N.A., as Administrative Agent
10 South Dearborn, 7th Floor
Mail Code: IL1-0011
Chicago, IL 60603
Attention:   Irma A Yanez
Fax:  312-385-7107
Phone:  312-385-7088
E-mail:  irma.yanez@jpmchase.com

Reference is made to Loan Agreement, dated as of February 19, 2010, by and among
Cleco Corporation (the “Borrower”), the Lenders party thereto and JPMorgan Chase
Bank, N.A., as Administrative Agent (in such capacity, the “Administrative
Agent”) (as the same may be amended, supplemented or otherwise modified from
time to time, the “Loan Agreement”).  Capitalized terms used herein that are
defined in the Loan Agreement shall have the meanings therein defined.
 
1. Pursuant to Section 2.3(a) of the Loan Agreement, the Borrower hereby gives
notice of its intention to borrow Borrowings in an aggregate principal amount of
$_______ on ______ __, 20__, which Borrowing(s) shall consist of the following
Types:
 
Type of Borrowing (ABR
 or Eurodollar)
 
Amount
Interest Period for
Eurodollar Advances
                       

2. The Borrower hereby certifies that on the date hereof and on the Borrowing
Date set forth above, and after giving effect to the Loans requested hereby,
there exists and shall exist no Default and  each of the representations and
warranties contained in each Loan Document is and shall be true and correct in
all material respects, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such representations and
warranties were true and correct at such earlier date.
 
3. The location and number of the Borrower’s account to which funds are to be
disbursed is as follows: [Insert Wire Instructions]
 
 
 
 
Cleco Corporation Initial Borrowing Request
 
 

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IN WITNESS WHEREOF, the Borrower has caused this Initial Borrowing Request to be
executed by its authorized signatory as of the date and year first written
above.
 
             CLECO CORPORATION
 

             By:                                                             
             Name:                                                              
             Title:                                   
                          
 
 
 
 

 
-6-
Cleco Corporation Initial Borrowing Request
 
 

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CLECO CORPORATION EXHIBIT D
 
FORM OF NOTE
 
New York, New York
February 19, 2010
 
FOR VALUE RECEIVED, the undersigned, Cleco Corporation, a Louisiana
corporation (the “Borrower”), hereby promises to pay to the order of
________________ (the “Lender”) the unpaid principal amount of the Loans made by
the Lender to the Borrower, in the amounts and at the times set forth in the
Loan Agreement, dated as of February 19, 2010, among the Borrower, the Lenders
party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (as the
same may be amended, supplemented or otherwise modified from time to time, the
“Loan Agreement”), and to pay interest from the date hereof on the principal
balance of such Loans from time to time outstanding at the rate or rates and at
the times set forth in the Loan Agreement, in each case at the office of the
Administrative Agent located at 10 South Dearborn, Chicago, Illinois, or at such
other place as the Administrative Agent may specify from time to time, in lawful
money of the United States in immediately available funds.  Terms not otherwise
defined herein but defined in the Loan Agreement are used herein with the same
meanings.
 
The Loans evidenced by this Note are prepayable in the amounts, and under the
circumstances, and their respective maturities are subject to acceleration upon
the terms, set forth in the Loan Agreement.  This Note is subject to, and shall
be construed in accordance with, the provisions of the Loan Agreement and is
entitled to the benefits and security set forth in the Loan Documents.
 
The Lender is hereby authorized to record on the Schedule annexed hereto, and
any continuation sheets which the Lender may attach hereto, (i) the date of each
Loan made by the Lender to the Borrower, (ii) the Type and amount thereof, (iii)
the interest rate (without regard to the Applicable Margin) and Interest Period
applicable to each Eurodollar Loan and (iv) the date and amount of each
conversion of, and each payment or prepayment of the principal of, any such
Loan.  The entries made on such Schedule shall be prima facie evidence of the
existence and amounts of the obligations recorded thereon, provided that the
failure to so record or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Loans in accordance with the terms of
the Loan Agreement.
 
Except as specifically otherwise provided in the Loan Agreement, the Borrower
hereby waives presentment, demand, notice of dishonor, protest, notice of
protest and all other demands, protests and notices in connection with the
execution, delivery, performance, collection and enforcement of this Note.
 
Whenever in this Note either party hereto is referred to, such reference shall
be deemed to include the successors and assigns of such party.  The Borrower
shall not have the right to assign its rights or obligations hereunder or any
interest herein (and any such attempted assignment shall be void), except as
expressly permitted by the Loan Documents.  No failure or delay of the Lender in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power.  Neither this Note nor any provision hereof may be waived,
amended or modified, nor shall any departure therefrom be consented to, except
pursuant to a written agreement entered into between the Borrower and the Lender
with respect to which such waiver, amendment, modification or consent is to
apply, subject to any consent required in accordance with Section 10.2 of the
Loan Agreement.
 
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
 
 
Cleco Corporation Note

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All communications and notices hereunder shall be in writing and given as
provided in Section 10.1 of the Loan Agreement.
 
The Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Note or the other Loan Documents, or for recognition or
enforcement of any judgment, and the Borrower hereby irrevocably and
unconditionally agrees that, to the extent permitted by applicable law, all
claims in respect of any such action or proceeding may be heard and determined
in such New York State court or, to the extent permitted by applicable law, in
such Federal court.  The Borrower, and by accepting this Note, the Lender,
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.  Nothing in this Note shall affect any
right that the Lender may otherwise have to bring any action or proceeding
relating to this Note or the other Loan Documents against the Borrower, or any
of its property, in the courts of any jurisdiction.
 
The Borrower, and by accepting this Note, the Lender, hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Note or the
other Loan Documents in any court referred to in the preceding paragraph hereof.
The Borrower, and by accepting this Note, the Lender, hereby irrevocably waives,
to the fullest extent permitted by applicable law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
 
The Borrower, and by accepting this Note, the Lender, irrevocably consents to
service of process in the manner provided for notices herein.  Nothing herein
will affect the right of the Lender to serve process in any other manner
permitted by law.
 
THE BORROWER, AND BY ACCEPTING THIS NOTE, THE LENDER, EACH HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS NOTE.  THE BORROWER (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE LENDER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT SUCH LENDER HAS BEEN
INDUCED TO ACCEPT THIS NOTE AND ENTER INTO THE LOAN DOCUMENTS TO WHICH IT IS A
PARTY BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.
 
*****
 

 
                   CLECO CORPORATION
 

                   By:                     
                                               
                   Name:                                    
                                  
                   Title:                                       
                               
 
 
 

-8-
Cleco Corporation Note
 
 

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SCHEDULE TO NOTE
 
 
 
 
 
Date
 
 
 
Type of
Loan
 
 
 
Amount of
Loan
Amount of
principal
converted,
paid or
prepaid
 
Interest Rate
on
Eurodollar
Loans
 
Interest
Period for
Eurodollar
Loans
 
 
 
Notation
Made By
                                                                               
                                                                               
                                                                               
                                                                               
               

 

Cleco Corporation Note
 
 

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CLECO CORPORATION EXHIBIT E
 
FORM OF COMPLIANCE CERTIFICATE
 
I, ______________, do hereby certify that I am the __________ of Cleco
Corporation (the “Borrower”), and that, as such, I am duly authorized to execute
and deliver this Compliance Certificate on the Borrower’s behalf pursuant to
Section 6.1(c) of the Loan Agreement, dated as of February 19, 2010, by and
among the Borrower, the Lenders party thereto and JPMorgan Chase Bank, N.A., as
Administrative Agent (as the same may be amended, supplemented or otherwise
modified from time to time, the “Loan Agreement”).  Capitalized terms used
herein which are not defined herein shall have the meanings assigned to such
terms in the Loan Agreement.
 
I hereby certify that:
 
4. To the best of my knowledge, all financial statements delivered herewith have
been prepared in accordance with GAAP.  There have been no changes in GAAP
pertinent to the Borrower or in the application thereof to Borrower and that
affects the computation of any financial covenant set forth in Section 6.11 of
the Loan Agreement, since the date of the audited financial statements referred
to in Section 4.4(a) of the Loan Agreement, [, except as follows:]17
 
5. There existed no Default or Event of Default on the last day of the fiscal
quarter ended ____________, 20___, and there exists no Default or Event of
Default as of the date hereof [, except as follows18]
 
6. Attached are true and correct calculations demonstrating compliance with
Section 6.11 of the Loan Agreement as of the fiscal quarter ended _____________,
20___ (the “Quarter”).
 

 
IN WITNESS WHEREOF, I have executed this Compliance Certificate on this ___ day
of ________, 20__.
 

                                                                                                                                            
 

 

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17      Specify each such change and the effect thereof on the financial
statements accompanying this Compliance Certificate as set forth in Section 1.4
of the Loan Agreement.
 
18      Specify all such violations, conditions and events, the nature and
status thereof and any action taken or proposed to be taken with respect
thereto.
 
 

Cleco Corporation Compliance Certificate
 
 

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Section 6.11(a)

 
Ratio of Total Indebtedness to Total Capitalization19
 

  A.  
Sum of all Indebtedness
 
$_____________________
  B.  
Unamortized premium and discount (as such term is used in the Financial
Statements)
 
$_____________________
  C.  
Total Indebtedness (Item 1 minus Item 2)
 
$_____________________
  D.  
Preferred Equity Interests
$_____________________
  E.  
Deferred compensation relating to unallocated convertible preferred Equity
Interests held by the Employee Stock Ownership Plan
 
$_____________________
  F.  
Net preferred Equity Interests (Item 5 minus Item 6)
$_____________________
  G.  
Common Equity Interests and any premium on capital stock thereon (as such term
is used in the Financial Statements) excluded accumulated other comprehensive
income or loss
 
$_____________________
  H.  
Retained earnings
$_____________________
  I.  
Sum of Items 3, 6, 7, and 8
$_____________________
  J.  
Treasury stock
$_____________________
  K.  
Total Capitalization (Item 9 minus Item 10)
$_____________________
  L.  
Ratio of Total Indebtedness to Total Capitalization (Item 3 divided by Item 11)
_.__:1.00
     
Maximum permitted ratio
0.65:1.00

 

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3  Each of the computations is based on the Borrower and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.

Cleco Corporation Compliance Certificate
 
 

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Section 6.11(b)

 
Interest Coverage Ratio20
 

  A.  
Net income for the period of the four fiscal quarters ending on the last day of
the Quarter (the “Period”)
 
 
$_____________________
  B.  
Interest Expense for the Period
$_____________________
  C.  
Provision for income taxes for the Period
$_____________________
  D.  
Aggregate amount attributable to depreciation and amortization for the Period
$_____________________
  E.  
Aggregate amount of items to the extent constituting extraordinary non-recurring
or non-operating charges or expenses for the Period
 
$_____________________
  F.  
Sum of Items 2 through Item 5, in each case to the extent deducted in
determining such net income
$_____________________
  G.  
Item 1 plus Item 6
$_____________________
  H.  
Aggregate amount of extraordinary, and non-recurring and non-operating additions
to income during the Period to the extent added in determining such net income
for the Period
 
$_____________________
  I.  
EBITDA  (Item 7 minus Item 8)
$_____________________
  J.  
Interest Coverage Ratio (Item 9:Item 2)
_.__:1.00
     
Minimum required ratio
2.50:1.00

 

 

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20 Each of the computations is based on the Borrower and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.

Cleco Corporation Compliance Certificate
 
 

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CLECO CORPORATION EXHIBIT F

 
APPROVED SUBORDINATION TERMS
 
Reference is made to the Loan Agreement, dated as of February 19, 2010, by and
among Cleco Corporation, as Borrower, the Lenders party thereto and JPMorgan
Chase Bank, N.A., as Administrative Agent (the “Loan Agreement”).  Capitalized
terms used herein and not defined herein shall have the meanings assigned to
such terms in the Loan Agreement.  In the event that the subordination terms are
in connection with a guaranty, the term “Guarantor” shall be substituted for the
term “Borrower”.
 
Following are the subordination terms to be applicable to Indebtedness or
Guarantees permitted pursuant to Section 7.1(a) of the Loan Agreement.
 
DEFINITIONS
 
“Insolvency Event” means any event with respect to the Borrower described in
Sections 8(h) or 8(i) of the Loan Agreement.
 
“Junior Creditors” means any holder of, or obligee under or in respect of, any
Junior Obligations.
 
“Junior Documents” means (i) [Identify the documents creating the subordinated
Indebtedness or subordinated Guarantees], (ii) each agreement, instrument or
other document executed or delivered in connection with the refinancing of any
Junior Obligations, and (iii) each agreement, instrument or other document
executed or delivered in connection with any of the foregoing.
 
“Junior Obligations” means all of the obligations and liabilities of the
Borrower under the Junior Documents, whether fixed, contingent, now existing or
hereafter arising, created, assumed or incurred, and including any obligation or
liability in respect of any breach of any representation or warranty and in
respect of any rights of repurchase, redemption or rescission.
 
“Senior Agent” means the Administrative Agent.
 
“Senior Creditors” means any holder of, or obligee under or in respect of, any
Senior Obligations.
 
“Senior Documents” means (i) the Revolving Credit Agreement (as defined in the
Loan Agreement), (i) the Loan Agreement, (ii) each agreement, instrument or
other document executed or delivered in connection with refinancing of Senior
Obligations, and (iii) each agreement, instrument or other document executed or
delivered in connection with any of the foregoing.
 
“Senior Obligations” means all of the obligations and liabilities of the
Borrower under the Senior Documents, whether fixed, contingent, now existing or
hereafter arising, created, assumed or incurred, and including (i) any
obligation or liability in respect of any breach of any representation or
warranty and in respect of any rights of redemption or rescission and (ii) all
post-petition interest and make-whole premiums, whether or not allowed as a
secured claim or as an unsecured claim in any proceeding, including any
proceeding arising under Title 11 of the United States Code, arising in
connection with an Insolvency Event.
 

Cleco Corporation Approved Subordination Terms
 
 

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PAYMENT PROVISIONS
 
 
A.
Payment Defaults. No payment of Junior Obligations may be made by the Borrower
in the event that the principal of, or interest on, or any other amount payable
in respect of, the Senior Obligations is not paid when due, whether at maturity
or at a date fixed for prepayment or by declaration or otherwise (a “Payment
Default”), unless and until such Payment Default has been cured or waived or
otherwise has ceased to exist.

 
B.  
Non-Payment Defaults. No payment of Junior Obligations may be made by the
Borrower in the event that an Event of Default other than a Payment Default (a
“Non-Payment Default”) has occurred, and has not been cured or waived, provided
that the Senior Agent delivers written notice (a “Blockage Notice”) to the
Borrower and to the Junior Creditors directing the Borrower not to make payment
of the Junior Obligations.  Notwithstanding the foregoing, unless (i) the Senior
Obligations have been declared due and payable in their entirety within 90 days
after the Blockage Notice is given as set forth above (the “Blockage Period”)
and (ii) such declaration has not been rescinded or waived upon expiration of
the Blockage Period, the Borrower will be required to pay to the Junior
Creditors all sums not paid to the Junior Creditors during the Blockage Period
due to the prohibitions of this paragraph (and upon the making of such payments
any acceleration of the Borrower’s obligations with regard to the Junior
Obligations which was declared during the Blockage Period because of the
Borrower’s failure to make payments due to the prohibitions in this paragraph
will be of no further force or effect) and to resume all other payments due
under the Junior Obligations as and when they are due.  Not more than one
Blockage Notice may be given in any consecutive 365 day period, irrespective of
the number of defaults with respect to Senior Obligations that may occur during
such period.  In no event may the number of days during which any Blockage
Period is, or Blockage Periods are, in effect exceed 180 days in the aggregate
during any consecutive 365 day period.

 
C.  
Insolvency Events. Upon any distribution of assets of the Borrower as a result
of any dissolution, winding up, liquidation or reorganization (including as a
result of an Insolvency Event), all Senior Obligations must be paid in full in
cash before any payment is made on account of the Junior Obligations.

 
D.  
Turn-Over. If the Junior Creditors receive any payments in respect of the Junior
Obligations which they are not entitled to receive pursuant to the applicable
subordination terms, such payment must be delivered to the Senior Agent on
behalf of the holders of the Senior Obligations as their interests may appear.

 
OTHER PROVISIONS
 
 
E.
Maturity.  The maturity of the Junior Obligations shall be at least one year
after the Maturity Date.

 

 
-5-
Cleco Corporation Approved Subordination Terms
 
 

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F.  
No Cross Default.  No Default under the Senior Obligations shall result in a
default under the Junior Obligations, except for a Payment Default on the
Maturity Date.  Cross acceleration is permitted.

 
G.  
Filing Claims.  The Senior Agent shall be irrevocably authorized to file any
required proof of claim if the Junior Creditors fail to do so in a timely
manner.

 
H.  
Amendments. No amendment to the subordination provisions is permitted without
the consent of the Senior Agent.

 
 
 
 

 
 
-6-
Cleco Corporation Approved Subordination Terms

 

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