Exhibit 10(b)63

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

 

AMONG

 

SYSTEM ENERGY RESOURCES, INC.,

 

UNION BANK OF CALIFORNIA, N.A.,

as Administrating Bank and Funding Bank,

 

KEYBANK NATIONAL ASSOCIATION,

as Syndication Agent,

 

BANC ONE CAPITAL MARKETS, INC.,

as Documentation Agent

 

AND THE PARTICIPATING BANKS

NAMED HEREIN

 

DATED AS OF

DECEMBER 22, 2003

______________________________________________

UNION BANK OF CALIFORNIA, N.A.,as Lead Arranger

BANC ONE CAPITAL MARKETS, INC. and KEYBANK NATIONAL ASSOCIATION,as Co-Arrangers

 

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT dated as of December 22, 2003, among **SYSTEM ENERGY RESOURCES, INC.**, an Arkansas corporation (the "***Company*"),****UNION BANK OF CALIFORNIA, N.A.**, as administrating bank (in such capacity, the "***Administrating Bank*"), **UNION BANK OF CALIFORNIA, N.A.**,****as issuer of the Letters of Credit (as defined below) (in such capacity, the "***Funding Bank*"), **BANC ONE CAPITAL MARKETS, INC.**, as documentation agent (in such capacity, the "***Documentation Agent*"),******KEYBANK NATIONAL ASSOCIATION**, as syndication agent (in such capacity, the "***Syndication Agent*" and, together with the Documentation Agent and the Administrating Bank, collectively referred to as the "***Agents*"),****and the banks listed on the signature pages hereof under the heading "***Participating Banks*" and the other banks from time to time party to this Agreement (each, a "***Participating Bank*"****and, collectively, the "***Participating Banks*")*.***WHEREAS, the Company entered into two Participation Agreements dated as of December 1, 1988, each among (i) the Company, (ii) Meridian Trust Company and Stephen M. Carta, for themselves and as Owner Trustees (the "***Owner Trustee*"), (iii) the Original Loan Participants, (iv) the GG1A Funding Corporation, as Funding Corporation, (v) Deutsche Bank Trust Company Americas (successor to Bankers Trust Company) and Stanley Burg, for themselves and as Indenture Trustees (collectively, the "***Indenture Trustee*"),****and (vi) each of Public Service Resources Corporation and Lease Management Realty Corporation IV, as applicable, as Owner Participant (each, an "***Initial Owner Participant*"****and, collectively, the "***Initial Owner Participants*")****and each relating to the acquisition of an undivided interest in the Grand Gulf Nuclear Station Unit No. 1 located in Claiborne County, Mississippi ("***Unit 1*")****through a trust for the benefit of each such Initial Owner Participant (each, a "***Participation Agreement*"****and, collectively, the "***Participation Agreements*")*,*****each of which undivided interest was and continues to be leased to the Company pursuant to a Facility Lease dated as of December 1, 1988, among the Owner Trustee and the Company and for the benefit of each such Initial Owner Participant and its successors, as supplemented by a Lease Supplement dated as of April l, 1989 and as supplemented by a Lease Supplement dated as of January 1, 1994 (each, a "***Facility Lease*"****and, collectively, the "***Facility Leases*");**WHEREAS, pursuant to the Letter of Credit and Reimbursement Agreement, dated as of March 3, 2003 (as amended, supplemented or otherwise modified from time to time, the "***Existing Reimbursement Agreement*"), among the Company, Union Bank of California, N.A., as administrating bank, Union Bank of California, N.A., as funding bank (in such capacity, the "***Existing Funding Bank"*), and the participating banks named therein, the Existing Funding Bank issued to each of the Owner Participants (as defined in Section 1 hereof) an irrevocable letter of credit substantially in the form of Exhibit A thereto (the "***Existing Letters of Credit*"); and**WHEREAS, the Company has requested the Funding Bank to issue letters of credit to replace the Existing Letters of Credit; the Funding Bank is willing, subject to the terms and conditions of this Agreement, to issue to each Owner Participant a new irrevocable letter of credit substantially in the form of Exhibit A hereto (each a "***Letter of Credit*"*,*and, collectively, the "***Letters of Credit*"*).***NOW, THEREFORE, the Funding Bank, the Agents, the Participating Banks and the Company hereby agree as follows:
***SECTION 1.	Definitions.  (a)  Capitalized terms used herein and not otherwise defined herein shall have the respective meanings assigned thereto in Appendix A hereto.  The following terms, as used herein, have the following respective meanings (such meanings to be applicable to both the singular and plural forms of the terms defined):

"***ABR*",**when used in reference to any drawing under a Letter of Credit or any Advance or Borrowing, refers to whether such drawing, Advance, or the Advances comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.
"***ABR Advance*"**means an Advance in respect of which the Company has selected in accordance with Section 2(e)(i) hereof, or this Agreement otherwise provides for, interest to be computed on the basis of the Alternate Base Rate.
"***Adjusted LIBO Rate*"**means, with respect to any Eurodollar Rate Advance for any Interest Period, an interest rate *per annum* (rounded upwards, if necessary, to the next1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period *multiplied**by* (b) the Statutory Reserve Rate.
"***Administrating Bank*"**has the meaning set forth in the preamble hereto.
"***Advance*"**means any DLE Initial Advance, DLE Term Advance, EOL Initial Advance or EOL Term Advance, and "***Advances*" means DLE Initial Advances, DLE Term Advances, EOL Initial Advances and EOL Term Advances collectively.
"***Aggregate Maximum Credit Amount*" means $198,061,427.93.
"***Agreement*"**means this Letter of Credit and Reimbursement Agreement, as the same may from time to time be amended, supplemented, restated or otherwise modified.
"***Alternate Base Rate*"**means, for any day, a rate *per annum* (rounded upwards, if necessary, to the next1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus1/2 of 1%.  For purposes hereof, "***Prime Rate*" shall mean the rate of interest *per annum* publicly announced from time to time by the Administrating Bank in Los Angeles, California as the Union Bank Reference Rate; each change in the Prime Rate shall be effective on the date such change is announced.  The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer.  The Administrating Bank may make commercial loans or other loans at rates of interest at, above or below the Prime Rate.  If the Administrating Bank shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any reason, including the inability or failure of the Administrating Bank to obtain sufficient quotations in accordance with the terms thereof, the Alternate Base Rate shall be determined without regard to clause (b) of the first sentence of this definition until the circumstances giving rise to such inability no longer exist.  Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"***Applicable Rate*"****means, for any day, (a) with respect to any drawing under a Letter of Credit that bears interest at a rate determined by reference to the Adjusted LIBO Rate or any Eurodollar Rate Advance subsequently made by the Participating Banks in order to reimburse such drawing (including any Advances resulting from the subsequent Conversion of such Eurodollar Rate Advance), (i) for the period commencing on the date of such drawing (the "***Draw Date*")****to and including the 60th day following the Draw Date, a rate *per annum* equal to the sum of (x) the Adjusted LIBO Rate for the Interest Period in effect *plus* (y) the Eurodollar Spread set forth below under the caption "*Eurodollar Spread*", based upon the ratings by Moody's and S&P, respectively, applicable on such date to the Index Debt, (ii) for the period following the 60th day following the Draw Date to and including the 180th day following the Draw Date, a rate *per annum*equal to the sum of (x) the Adjusted LIBO Rate in effect for such Interest Period *plus* (y) the Eurodollar Spread set forth below under the caption "*Eurodollar Spread*", based upon the ratings by Moody's and S&P, respectively, applicable on such date to the Index Debt *plus* (z) 0.25% *per annum* and (iii) for the period following the 180th day following the Draw Date until the date that such Advance is due and payable, a rate *per annum* equal to the sum of (x) the Adjusted LIBO Rate in effect for such Interest Period *plus* (y) the Eurodollar Spread set forth below under the caption "*Eurodollar Spread*", based upon the ratings by Moody's and S&P, respectively, applicable on such date to the Index Debt *plus* (z) 1.0% *per annum*; (b) with respect to the Participation Fees payable hereunder, the rate *per annum* set forth below under the caption "*Participation Fee Rate*", based upon the ratings by Moody's and S&P, respectively, applicable on such date to the Index Debt; and (c) with respect to the Commitment Fees payable hereunder, the rate *per annum* set forth below under the caption "*Commitment Fee Rate*", based upon the ratings by Moody's and S&P, respectively, applicable on such date to the Index Debt: 
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Index Debt**************************************************************************************************