Document:

Exhibit

Exhibit 4(c)9

FUEL LEASE

Dated as of December 22, 1988

between

RIVER FUEL TRUST #1,
as Lessor

and

ARKANSAS POWER & LIGHT COMPANY,
as Lessee

AS OF THE DATE OF THIS LEASE, THE LESSOR UNDER THIS LEASE (THE “LESSOR”) HAS GRANTED TO MORGAN GUARANTY TRUST COMPANY OF NEW YORK A SECURITY INTEREST IN THIS LEASE AND IN ALL OF LESSOR’S RIGHTS AND INTERESTS UNDER THIS LEASE, INCLUDING, WITHOUT LIMITATION, ALL LESSOR’S RIGHTS TO AND INTERESTS IN NUCLEAR FUEL AS DEFINED IN THIS LEASE.

THIS LEASE HAS BEEN MANUALLY EXECUTED IN FIFTEEN COUNTERPARTS, NUMBERED CONSECUTIVELY FROM 1 TO 15.  NO SECURITY INTEREST IN THIS LEASE OR IN ANY OF LESSOR’S RIGHTS AND INTERESTS UNDER THIS LEASE MAY BE PERFECTED BY THE POSSESSION OF ANY SUCH COUNTERPART OTHER THAN COUNTERPART NO. 1.

TABLE OF CONTENTS

Section         Page
    
		
	1.
	Defined Terms    1

		
	2.
	Representations and Warranties of Lessee    7

		
	3.
	Lease of Nuclear Fuel; Term    8

		
	4.
	Title to Remain in the Lessor; Fuel Management; Nuclear Fuel to be Personal Property and Used for Generation; Location; Contract Assignment    9

		
	5.
	Basic Rent and Additional Rent; Procedure for Paying Basic Rent    10

		
	6.
	Payment of Costs by the Lessor    11

		
	7.
	Taxes    12

		
	8.
	Condition and Use of Nuclear Fuel; Quiet Enjoyment    12

		
	9.
	Maintenance of the Nuclear Fuel    14

		
	10.
	Removals; Transfer to the Lessee; Commingling; Substitution; Location    14

		
	11.
	Indemnification by the Lessee    17

		
	12.
	Inspection; Right to Enter Generating Facility    17

		
	13.
	Payment of Impositions; Recording    18

		
	14.
	Compliance with Legal and Insurance Requirements, and with Instruments    18

		
	15.
	Liens    18

		
	16.
	Permitted Contests    19

		
	17.
	Insurance    19

		
	18.
	Damage or Destruction    20

		
	19.
	Condemnation or Eminent Domain    21

		
	20.
	Termination After Certain Events    22

		
	21.
	Conditions of Termination and Conveyance    25

		
	22.
	Estoppel Certificates; Information    26

		
	23.
	Rights to Perform the Lessee’s Covenants    26

		
	24.
	Assignments    26

		
	25.
	Events of Default and Remedies    27

		
	26.
	Permanent Storage or Disposal    29

		
	27.
	No Merger    30

		
	28.
	Notices    30

		
	29.
	Allocation of Amounts    30

		
	30.
	Amendments    31

		
	31.
	Severability    31

		
	32.
	Job Incentive Credit and Investment Credit    31

		
	33.
	Miscellaneous    32

Attachments
Schedule A -- Description of Nuclear Fuel
Schedule B -- Quarterly Rent Schedule
Schedule C -- Bill of Sale to River Fuel Trust #1
Schedule D -- Fuel Schedule No. ____
Schedule E -- Bill of Sale from River  Fuel Trust #1 to Arkansas Power & Light Company
Schedule F -- Form of Assignment Agreement

    

FUEL LEASE
FUEL LEASE dated as of December 22, 1988 (as the same may be amended from time to time, “this Lease”), between ARKANSAS POWER & LIGHT COMPANY, an Arkansas corporation, and RIVER FUEL TRUST #1, a trust formed pursuant to the Trust Agreement, dated as of December 20, 1988 among UNITED STATES TRUST COMPANY OF NEW YORK, as trustee (the “Trustee”), Morgan Guaranty Trust Company of New York, as Trustor, and ARKANSAS POWER & LIGHT COMPANY, as beneficiary.
		
	Section 1.
	Defined Terms.

Unless the context otherwise specifies or requires, each term defined in this Section 1 shall, when used in this Lease, have the meaning indicated:
“Acquisition Cost” shall mean the purchase price paid by the Lessor in order to acquire any portion of the Nuclear Fuel including progress payments, if any, made by the Lessor in respect of Nuclear Fuel, together with costs of milling, conversion, enrichment, fabrication, installation, delivery, containerization, transportation, storage, processing, Reprocessing and any other direct costs with respect to acquiring, recovering or preparing such portion of the Nuclear Fuel for use in or for cycling or recycling thereof or for management thereof through any stage of its Nuclear Fuel Cycle, and costs with respect to repairs, replacements and renewals or Restoration of any portion of the Nuclear Fuel but excluding therefrom all Capitalized Cost with respect thereto.  The purchase price for any part of the Nuclear Fuel acquired by the Lessor from the Lessee shall include all payments made by the Lessee to the Manufacturers for such Nuclear Fuel plus all costs, expenses and allowances which have been incurred or made by Lessee in connection with such Nuclear Fuel and which are properly includible as a cost of such Nuclear Fuel in Lessee’s books of account in accordance with Lessee’s normal accounting practice.
“Additional Rent” shall mean all amounts (other than Basic Rent and Advance Rent) that the Lessee agrees to pay in this Lease (including, without limitation, indemnification payable under this Lease) and interest at the rate incurred by the Lessor or the Assignee as a result of any delay in payment by the Lessee to meet obligations that would have been satisfied out of prompt payment by the Lessee.
“Advance Rent” shall have the meaning assigned to that term in Section 5(g) of this Lease.
“Assignee” shall mean each person, firm, corporation or other entity to which any part of the Lessor’s interest under this Lease, or any rents or other rights of the Lessor under this Lease, shall at the time have been assigned, conditionally or otherwise, by the Lessor.  Until the Lessee shall be otherwise notified by the Lessor, the Assignee shall be Morgan Guaranty Trust Company of New York (“Morgan”), as collateral agent under the Security and Collateral Agency Agreement, dated as of December 22, 1988 between the Lessor and Morgan.
“Atomic Energy Act” shall mean the Atomic Energy Act of 1954, as amended, as the same may be further amended from time to time (42 U.S.C. § 2011 et seq.).
“Basic Rent” payable on any Basic Rent Payment Date shall mean the sum of the Quarterly Lease Charge, less those Daily Lease Charges included in Capitalized Cost, plus the Burn-Up Charge, in each case with respect to the quarter prior to such Basic Rent Payment Date.
“Basic Rent Payment Date” shall have the meaning assigned to that term in Section 5(a) of this Lease.

“Bill of Sale” shall mean a bill of sale in substantially the form of either Schedule C or Schedule E attached to and made a part of this Lease, pursuant to which title to all or any portion of the Nuclear Fuel is transferred to the Lessor or to the Lessee.
“Burn-Up Charge” shall mean the amount shown as Total Burn-Up Charge on Annex I to the Quarterly Rent Schedule delivered to the Lessor pursuant to Section 5(c) hereof in respect of such Basic Rent Payment Date.
“Business Day” shall mean any day other than a day on which banking institutions in the State of New York or in the State of Arkansas are authorized by law to close.
“Capitalized Cost” shall mean the sum of all legal, printing, reproduction, closing and other normally capitalizable administrative fees and expenses actually paid by the Lessor in connection with any acquisition of the Nuclear Fuel and in connection with the transactions contemplated by a Credit Agreement (including interest expense and amortization of debt discount with respect to Commercial Paper and loans under a Credit Agreement and all commitment and other fees, costs and expenses, including the issuing agent’s fees, relating to liabilities of the Lessor under a Credit Agreement) or contemplated by a Secured Note Agreement (including interest expense and amortization of discount with respect to Secured Notes and other fees, costs and expenses incurred in connection with a Secured Note Agreement), and Daily Lease Charges accrued pursuant to this Lease which, in the Lessee’s sole judgment, are allocable to such Nuclear Fuel (i) during any stage of its Nuclear Fuel Cycle other than its Heat Production stage or (ii) during the period beginning on the Termination Notice Date and ending on the Termination Settlement Date (in each case as defined in Section 20(b) of this Lease) if and to the extent that the Lessee elects to capitalize any such Daily Lease Charges; provided, however, that Daily Lease Charges may be allocated to and included in Capitalized Cost by the Lessee only so long as the commitment under a Credit Agreement and the aggregate principal amount of Secured Notes outstanding shall exceed the sum of the Stipulated Loss Value of all of the Nuclear Fuel (including such Daily Lease Charges in the computation of Capitalized Cost for purposes of determining the amount of Investment) and $5,000,000.
“Collateral Account” shall have the meaning specified in the Security Agreement.
“Commercial Paper” shall mean commercial paper notes issued by the Lessor pursuant to a Credit Agreement.
“Cooling” shall mean the stage of the Nuclear Fuel Cycle pursuant to which Nuclear Fuel is placed in underwater storage upon completion of the Heat Production stage of the Nuclear Fuel Cycle.
“Credit Agreement” shall mean that certain credit agreement, dated as of December 22, 1988, between the Lessor and Union Bank of Switzerland, Houston Agency, as the same may from time to time be amended, modified or supplemented, and any other successor credit agreement entered into between the Lessor and any bank or other entity for use in financing the cost of Nuclear Fuel.
“Daily Lease Charge” shall mean for any calendar day (whether or not a Business Day) during the term of this Lease the sum of:
(i)    an accrual for such day of all interest expense and of the amortization of debt discount, whether or not paid, with respect to (A) all Commercial Paper issued, (B) all other indebtedness incurred pursuant to a Credit Agreement and (C) all Secured Notes issued, which, in each case, is outstanding at the close of business on such day (net of Lessor’s earnings on such day on investment of moneys received 

in connection with the transactions contemplated by this Lease, a Credit Agreement or a Secured Note Agreement), and
(ii)    an accrual for such day with respect to (A) all commitment and other fees, costs and expenses (including, without limitation, issuing agent’s and commercial paper dealer’s fees) relating to the liabilities of the Lessor under a Credit Agreement, (B) all fees, costs and expenses incurred by the Lessor in connection with a Secured Note Agreement and (C) all fees, costs and expenses incurred by the Lessor under any Security Agreement.
Any figure used in the computation of any component of the Daily Lease Charge shall be stated to ten decimal places.  No accrual, charge or other item which would constitute a part of the Acquisition Cost shall be included in the computation of Daily Lease Charge.
“Event of Default” shall mean any Event of Default referred to in Section 25 hereof.
“Fuel Management” shall mean the design of, contracting for, fixing the price and terms of acquisition of, management, movement, removal, disengagement and other activities in connection with the utilization of the Nuclear Fuel, and sometimes referred to as “management”.
“Fuel Schedule” shall mean an instrument in substantially the form of Schedule D attached hereto and made a part hereof, pursuant to which Schedule A to this Lease is amended in connection with a request by the Lessee for payment with respect to Nuclear Fuel pursuant to Section 6 hereof or in connection with a removal or a replacement of Nuclear Fuel pursuant to Section 10, 18(a) or 19(b) hereof.
“Generating Facility” shall mean both units of the pressurized water reactor power plant located near Russellville, Arkansas, known as Arkansas Nuclear One.
“Heat Production” shall mean the stage of the Nuclear Fuel Cycle in which the Nuclear Fuel or any portion thereof is engaged in a reactor core of the Generating Facility and is being consumed to produce heat, pursuant to the process of nuclear fission, in the production of electric energy.
“Impositions” shall mean all payments required by public or governmental authority in respect of any property subject to this Lease or any transaction pursuant to this Lease or any right or interest held by virtue of this Lease.
“Insurance Requirements” shall mean all terms of any insurance policy covering or applicable to the Nuclear Fuel or any portion thereof, all requirements of the issuer of any such policy, and all orders, rules, regulations and other requirements of the Nuclear Regulatory Commission, the National Board of Fire Underwriters, or any other body exercising similar functions with respect to electric utility properties or any other body hereafter constituted exercising similar functions, which are applicable to or affect insurance with respect to the Generating Facility, the Nuclear Fuel or any portion thereof or any operation, use or condition of the Generating Facility, the Nuclear Fuel or any portion thereof.
“Insured Person” shall have the meaning assigned to that term in Section 17 of this Lease.
“Investment” shall mean with respect to any portion of the Nuclear Fuel, the sum of (i) the Acquisition Cost for such portion plus (ii) the Capitalized Cost for such portion.
“Legal Requirements” shall mean all requirements having the force of law applicable to the Lessee, as owner and operator of the Generating Facility, the Generating Facility or the Nuclear Fuel.

“Lessee” shall mean Arkansas Power & Light Company, an Arkansas corporation, or any successor or successors to its rights and obligations as lessee hereunder.
“Lessor” shall mean River Fuel Trust #1, a trust formed pursuant to the Trust Agreement, or any successor or successors to the rights and obligations of River Fuel Trust #1 as lessor hereunder, including at any time after the date hereof, the then owner of the Nuclear Fuel.
“Manufacturers” shall mean any supplier of Nuclear Fuel, or any component thereof, or of Reprocessing or other service in connection therewith (including for this purpose Russell Energy, Inc. and Ozark Fuel Company).
“Mortgage and Deed of Trust” shall mean the Lessee’s Mortgage and Deed of Trust, dated as of October 1, 1944 to the Guaranty Trust Company of New York (Morgan Guaranty Trust Company of New York, successor), Henry A. Theis (John W. Flaherty, successor), and as to property situated in Missouri, Marvin A. Mueller (The Boatmen’s National Bank of St. Louis, successor), as Trustees, as supplemented or a successor general and refunding mortgage entered into in the ordinary course of the Lessee’s business.
“MWhr Factor” shall mean a factor determined by deducting (i) the estimated residual value stated in dollars of each assembly of the Nuclear Fuel after it shall have completed Heat Production from (ii) the Stipulated Loss Value for each such assembly and dividing the remainder by the estimated amount of heat remaining, measured in thermal megawatt hours, that such assembly will produce during Heat Production.  The quotient shall be computed to the nearest fifth decimal place.
“Nuclear Fuel” shall mean the separate assemblies of Nuclear Fuel and components thereof more particularly described in Schedule A hereto, as amended from time to time by means of a Fuel Schedule, in the respective forms in which such assemblies and components exist at each stage of the Nuclear Fuel Cycle, beginning with Nuclear Fuel in the form of ore which has already been mined, consisting of substances and equipment which, when loaded into a nuclear reactor, are intended to produce heat through the fission process, together with all replacements thereof and additions thereto.  But “Nuclear Fuel” shall not include any assemblies, components or other items purchased and paid for by the Lessee pursuant to the provisions of Sections 10(b), 10(c) and 10(f) hereof.
“Nuclear Fuel Contract” shall mean any contract entered into by the Lessee with one or more Manufacturers relating to the acquisition of any Nuclear Fuel or service in connection therewith.
“Nuclear Fuel Cycle” shall mean the various stages herein defined in the process, whether physical or chemical, by which the component parts of the Nuclear Fuel are processed, enriched, designed, fabricated into assemblies utilizable for Heat Production, loaded into a reactor core, utilized, disengaged, cooled, stored and/or reprocessed, together with all incidental processes with respect to the Nuclear Fuel at any stage of said Nuclear Fuel Cycle.
“Nuclear Incident” shall have the meaning specified in the Atomic Energy Act.
“Nuclear Regulatory Commission” shall mean the independent regulatory commission of the United States government existing under the authority of the Energy Reorganization Act of 1974, as amended, or any successor organization or organizations or administrator or administrators performing any identical or substantially identical licensing and related regulatory functions.
“Person” shall mean any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

“Quarterly Lease Charge” shall mean the sum, for any quarter ending on the last day of each March, June, September and December, of the aggregate of the Daily Lease Charges incurred with respect to all portions of the Nuclear Fuel subject to this Lease at any time during such quarter.
“Quarterly Rent Schedule” shall mean an instrument in substantially the form of Schedule B attached hereto and made a part hereof from time to time executed by the Lessor and the Lessee for the purpose of setting forth and confirming the S.L.V. of the Nuclear Fuel and the Burn-Up Charges and Daily Lease Charges for the Nuclear Fuel.
“Reprocessing” shall mean the stage of the Nuclear Fuel Cycle in which the Nuclear Fuel, after it has completed Heat Production and Cooling, is transported to a reprocessing plant, mechanically disassembled, dissolved in acidic solution and separated into recovered forms of uranium, plutonium and other radioactive materials, or any process or processes used in place thereof.
“Restoration” shall mean the repair, reconstruction or replacement of all or any portion of the Nuclear Fuel which has been damaged or destroyed or lost or stolen or which has been affected by a Taking, as nearly as possible to the value, condition and character of such portion, and in its location, immediately prior to such damage, destruction, loss, theft or Taking, or the replacement of any assembly of the Nuclear Fuel so damaged, destroyed or lost or stolen or affected by a Taking, with Nuclear Fuel having an equivalent value and Heat Production capacity with only such alterations and additions as may be made at the Lessee’s election and as will not diminish the fair market value or usefulness of the Nuclear Fuel so repaired, reconstructed or replaced.
“Secured Note” shall mean each promissory note of the Lessor having a maturity date more than 270 days from its date of issuance, issued pursuant to a Secured Note Agreement and the proceeds of which are used to pay Acquisition Cost or Capitalized Cost or to pay borrowings previously incurred by the Lessor in connection with the financing of its acquisition or ownership of Nuclear Fuel and the holder of which is entitled to the benefit of the security interest granted to the Assignee pursuant to a Security Agreement.
“Secured Note Agreement” shall mean each note agreement, dated as of December 22, 1988, between the Lessor and lenders with respect to the sale by the Lessor of Secured Notes, Series A, and any similar agreement entered into between the Lessor and institutional investors relating to the issuance and sale by the Lessor of any other series of Secured Notes.
“Security Agreement” shall mean an agreement from the Lessor to the Assignee, which creates a security interest in the Nuclear Fuel, as the same may be entered into and/or amended from time to time.
“Stipulated Loss Value” or “S.L.V.” shall mean with respect to any portion of the Nuclear Fuel at any time leased hereunder, the excess of the amount of the Investment in such portion over the aggregate amount of the Burn-Up Charges theretofore paid by the Lessee to the Lessor in respect of such portion.
“Taking” shall mean a loss, during the term hereof, of the title to, ownership of or use and possession of the Nuclear Fuel, or any material portion thereof, or any material interest therein or right accruing thereto, as the result of or in lieu or in anticipation of the exercise of the rights of condemnation or eminent domain pursuant to any law, general or special, or by reason of the temporary requisition of the use of the Nuclear Fuel, or any material portion thereof, by any governmental authority, civil or military.
“Termination Event Date” shall have the meaning assigned to that term in Section 20(b) of this Lease.

“Termination Rent” shall mean an amount which, when added to the Stipulated Loss Value then payable by the Lessee pursuant to Section 20(b) or Section 25(b) hereof, as the case may be, will be sufficient to enable the Lessor (i) to retire, at their respective maturities, all of Lessor’s then outstanding obligations under (A) any Credit Agreement, including all Commercial Paper issued thereunder and all loans obtained thereunder and (B) any Secured Note Agreement, including all Secured Notes issued pursuant thereto, and (ii) to pay all charges, premiums and fees owed to any lender under a Credit Agreement or Secured Note Agreement or to the Assignee.
“Termination Settlement Date” shall have the meaning assigned to that term in Section 20(b) of this Lease.
“Trust Agreement” shall mean that certain trust agreement, dated as of December 20, 1988, among the Trustor, United States Trust Company of New York, as Trustee and the Lessee, as beneficiary, as the same may from time to time be amended, modified or supplemented.
“Trust Estate” shall have the meaning set forth in Section 1 of the Trust Agreement.
“Trustee” shall mean United States Trust Company of New York, not in its individual capacity, but solely as trustee under the Trust Agreement.
“Trustor” shall mean Morgan Guaranty Trust Company of New York, as trustor under the Trust Agreement.
“Unavoidable Delays” shall mean delays due to strikes, acts of God, governmental restrictions or regulatory delays, enemy action, civil commotion, fire, unavoidable casualty causes affecting the integrity of generating or transmission systems or other causes beyond the control of the Lessee.
		
	Section 2.
	Representations and Warranties of Lessee.

The Lessee represents and warrants to the Lessor:
(a)Organization, Standing, etc.  The Lessee is a corporation duly organized, validly existing and in good standing under the laws of the State of Arkansas and has all requisite corporate power and authority, and has obtained all necessary governmental licenses and permissions, to carry on its business and to execute, deliver and perform this Lease.

(b)Financial Statements.  The Lessee has furnished to the Lessor copies of its Annual Report on Form 10-K for the year ended December 31, 1987, its Annual Report to Shareholders for the year 1987, and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 1988, June 30, 1988 and September 30, 1988.  The financial statements contained in such documents fairly present the financial condition and results of operations of the Lessee as of the dates and for the periods indicated therein and have been prepared in accordance with generally accepted accounting principles applied on a consistent basis (except as may be otherwise disclosed in the footnotes thereto).

(c)Changes, etc.  Since September 30, 1988, no change has occurred in the condition or business of the Lessee which is continuing and which in any way impairs the ability of the Lessee to perform its obligations under the Lease.

(d)Litigation, etc.  Except as may be disclosed in or contemplated by the Lessee’s Annual Report on Form 10-K for the year ended December 31, 1987 and its Quarterly Reports on Form 10-Q for the quarters 

ended March 31, 1988, June 30, 1988 and September 30, 1988, there is no action, suit, proceeding or investigation at law or in equity or by or before any governmental instrumentality or other agency now pending or, to the knowledge of the Lessee, threatened (or any basis therefor) against or affecting the Lessee or any property or rights of the Lessee which questions the validity of this Lease or which is reasonably likely to be adversely determined, and which, if so determined, would impair the ability of the Lessee to perform its obligations hereunder.

(e)Compliance with Other Instruments, etc.  The execution, delivery and performance of this Lease will not result in any violation of any term of the Amended and Restated Articles of Incorporation or the By-Laws of the Lessee or of any material agreement, indenture or similar instrument, license, judgment, decree, order, law, statute, ordinance or governmental rule or regulation applicable to the Lessee, including, without limitation, the Lessee’s Mortgage and Deed of Trust.

(f)Governmental Consent, etc.  No consent, license, order, authorization or approval of, or registration, declaration or filing with, any governmental or public body or authority on the part of the Lessee is required in connection with the valid execution, delivery and performance of this Lease, except the approving Order of the Securities and Exchange Commission under the Public Utility Holding Company Act of 1935, as amended, which has heretofore been applied for and obtained and which remains in full force and effect and the filing of a certificate pursuant to Rule 24 of the Public Utility Holding Company Act of 1935, as amended, which will follow the execution and delivery of this Lease.

Section 3.Lease of Nuclear Fuel; Term.

(a)The Lessor hereby leases to the Lessee, and the Lessee hereby leases from the Lessor, the Nuclear Fuel for the term provided in this Lease and subject to the terms and provisions hereof.

(b)The term of this Lease shall begin at 12:01 A.M., New York City time, on December 22, 1988, and unless extended as herein provided or unless sooner terminated as hereunder provided pursuant to Section 20, shall end at the later to occur of (i) if any Secured Notes are issued, the final maturity date of one or more Secured Notes on a date on which no other Secured Notes are outstanding or (ii) the close of business in New York City on December 31, 1993; provided, however, that unless either the Lessor or the Lessee shall have given notice to the other by December 1 in 1991, or in any subsequent year, stating that this Lease shall terminate at the close of business in New York City on December 31 of the second following year, then the term of this Lease shall thereupon automatically be extended for one additional year, without the necessity of any action by the Lessor or the Lessee; provided further, that, not less than 15 and not more than 30 days prior to each date on which the parties could give such notice of termination, Lessor shall in writing inform Lessee of its right to give such notice and of the automatic extension of this Lease if neither Lessee nor Lessor gives such notice of termination.  This Lease shall in any event terminate at the close of business in New York City on December 31, 2038, if the term shall be extended until then.

Section 4.Title to Remain in the Lessor; Fuel Management; Nuclear Fuel to be Personal Property and Used for Generation; Location; Contract Assignment.

(a)Title to and ownership of the Nuclear Fuel shall at all times remain in the Lessor and at no time become vested in the Lessee, except in accordance with an express provision of this Lease.  This is a lease only, and shall not give or grant to the Lessee any right, title or interest in or to the Nuclear Fuel, or any portion thereof, except the rights of a lessee in accordance with the provisions hereof.

(b)So long as no Event of Default shall have occurred and be continuing and the Lessor shall not have elected to exercise any of its remedies under Section 25 hereof, the Lessee shall have full right and lawful authority to engage in Fuel Management.  The Lessee is hereby designated the lawful representative of the Lessor in all dealings with Manufacturers and any regulatory agency having jurisdiction over the ownership or possession of the Nuclear Fuel.

(c)The Nuclear Fuel is personal property and the Lessee shall, at its expense, take all such action as may be required to cause the Nuclear Fuel to retain its character as personal property and to refrain from taking any action which would cause it to lose its character as personal property.  The Nuclear Fuel shall not become part of any real property on which it or any portion thereof may from time to time be situated, notwithstanding the means by which it is installed or attached thereto and notwithstanding any law or custom or the provision of any lease, mortgage or other instrument applicable to any such real property.  The Lessee agrees to indemnify the Lessor against and to hold the Lessor harmless from, all losses, costs and expenses resulting from any of the Nuclear Fuel becoming part of real property, and such indemnification shall survive the termination of this Lease, in whole or in part.

(d)The Lessee represents and warrants to the Lessor that the Nuclear Fuel location will be limited to: (x) the Manufacturer’s facilities, (y) transit between Manufacturers’ facilities and other Manufacturers’ facilities or the Generating Facility and (z) the Generating Facility.  Each assembly of the Nuclear Fuel will be located during its Heat Production or Cooling stage in the Generating Facility.  The Lessee shall advise the Lessor and the Assignee of the States in which Nuclear Fuel may be located during the Nuclear Fuel Cycle.  The Lessee shall advise the Lessor and the Assignee of any additional State and location in which the Nuclear Fuel may be located thirty days prior to its movement to such State and location.

(e)Except to the extent otherwise agreed to by the Lessor, prior to obtaining pursuant to Section 6 hereof any payment by the Lessor to a Manufacturer pursuant to a Nuclear Fuel Contract, the Lessee shall deliver to the Lessor an executed Assignment Agreement (in the form attached as Schedule F hereto) with respect to such Contract (thereafter an “Assigned Nuclear Fuel Contract”) together with a Consent and Agreement (in the form attached to Schedule F hereto) insofar as it relates to Nuclear Fuel executed by the Manufacturer which is a party to said Assigned Nuclear Fuel Contract.

Section 5.Basic Rent and Additional Rent; Procedure for Paying Basic Rent.

(a)The Lessee covenants to pay to the Lessor or, if so directed by the Lessor, the Assignee, on January 31, 1989 and on the last day of each January, April, July and October thereafter (or if such day is not a Business Day, on the next preceding Business Day) (each such date being herein called a “Basic Rent Payment Date”), at not later than 11:00 A.M., New York City time, the respective amounts of Basic Rent shown on Annex I to the Quarterly Rent Schedule delivered to the Lessor in accordance with clause (i) of Section 5(c) hereof in respect of such Basic Rent Payment Date.

(b)The Lessee hereby covenants and agrees that it will not cause or suffer any assembly of the Nuclear Fuel to be engaged in any nuclear reactor until the Lessee delivers to the Lessor a certificate, dated the date of delivery and signed by a qualified engineer, who may be an employee of the Lessee, describing all assemblies of Nuclear Fuel then being engaged in any nuclear reactor as they are described in Schedule A hereto; provided that such a certificate for assemblies initially listed in Schedule A shall be delivered to the Lessor at the time of execution of this Lease.

(c)At least 15 days before each Basic Rent Payment Date, the Lessor shall deliver to the Lessee a Quarterly Rent Schedule completed as to Columns 1, 2, 3 and 4 and as to Annex II thereto.  On such Basic Rent Payment Date, the Lessee shall

(i)deliver to the Lessor the Quarterly Rent Schedule so received duly completed as to the remaining Columns and as to Annex I; and

(ii)pay to the Lessor or the Assignee as the Lessor may direct in writing the amount shown for Basic Rent in such Annex I for the calendar quarter ended on the last day of the month preceding the month during which such Basic Rent Payment Date occurs.

Each such Quarterly Rent Schedule shall be signed and delivered in triplicate.
(d)All sums payable by the Lessee to the Lessor shall be payable in Federal funds and shall be paid to the Lessor at the Lessor’s address for purposes of notices hereunder or to such other Person or at such other address as the Lessor may from time to time designate.

(e)In addition to the Basic Rent, the Lessee will also pay from time to time as provided in this Lease or on demand of the Lessor, all Additional Rent as and when due and payable.  In the event of any failure by the Lessee to pay any Additional Rent, the Lessor shall have all the rights, powers and remedies as in the case of failure to pay Basic Rent.

(f)The Lessee may prepay Basic Rent at any time.  Such payment shall be credited against subsequent amounts owed by the Lessee on account of Basic Rent.

(g)In addition to Basic Rent and Additional Rent, the Lessee will also pay, from time to time, upon demand of the Lessor or the Assignee (to the extent the Assignee may exercise the Lessor’s rights hereunder), advance rent (the “Advance Rent”) in such amounts as may be required to permit the Lessor to pay in full the amount of any component of Daily Lease Charge which is then due and payable by the Lessor to the extent that funds for the payment of such component may not then be obtained by the Lessor by effecting borrowings permitted by a Credit Agreement or any Secured Note Agreement.  Any such payment of Advance Rent shall be credited against subsequent amounts owed by the Lessee on account of Basic Rent.  In the event of any failure by the Lessee to pay any Advance Rent, the Lessor shall have all of the rights, powers and remedies as in the case of a failure to pay Basic Rent.

(h)The obligations of the Lessee to pay Basic Rent, Additional Rent, Advance Rent, Termination Rent and the amounts specified in Section 10(c), Section 20(b) and Section 25(b)(ii) shall be absolute and unconditional and the payment of such amounts shall not be subject to any right of set-off, counterclaim, recoupment, defense, abatement, suspension, deferment or reduction.  The foregoing agreement by the Lessee is without prejudice to its right to pursue, by separate action, any claim which the Lessee may have against any Person, including, without limitation, the Lessor, each Person who is a lender under a Credit Agreement or a Secured Note Agreement or the Trustee.

Section 6.Payment of Costs by the Lessor.

So long as no Event of Default or event which, with the giving of notice or the lapse of time or both, would be an Event of Default has occurred and is then continuing and the Lessee’s representations and warranties set forth in Section 2 are true, whenever the Lessee desires the Lessor to acquire title to property which, upon such acquisition, shall become part of the Nuclear Fuel and to pay any Acquisition 

Cost relating thereto, or the Lessee desires to obtain payment to a Manufacturer or payment to the Lessee of any Acquisition Cost or Capitalized Cost or both of any portion of the Nuclear Fuel, including Nuclear Fuel acquired after the date of this Lease either as additional Nuclear Fuel or as replacement Nuclear Fuel, the Lessee may deliver to the Lessor a Fuel Schedule in substantially the form of Schedule D, dated as of the date of delivery and fully executed by the Lessee, which shall (i) describe in Annex II thereto, in the same manner as in Schedule A hereto, such portion of the Nuclear Fuel, (ii) set forth in Annex I thereto, in the manner specified in Section 29 hereof, the Acquisition Cost and Capitalized Cost payable to such Manufacturer or incurred by the Lessee as of the date of such Fuel Schedule with respect to such portion of the Nuclear Fuel and (iii) set forth in item 2 of the Fuel Schedule that portion of such Acquisition Cost and Capitalized Cost which has not previously been the basis of payment to such Manufacturer or payment to the Lessee pursuant to this Section 6, and with respect to which the Lessee desires payment.  At such time as a Nuclear Fuel Contract provides for transfer of title to any portion of the Nuclear Fuel for which a Fuel Schedule has been or is being submitted to the Lessor by the Lessee, the Lessee shall cause the relevant Manufacturer to deliver to the Lessor a duly executed Bill of Sale substantially in the form of Schedule C hereto describing such portion of the Nuclear Fuel unless the Nuclear Fuel Contract provides for the transfer of title to the Lessor without execution and delivery by the relevant Manufacturer of a Bill of Sale; and at such time as a Fuel Schedule is delivered the Lessee shall deliver to the Lessor a duly executed Bill of Sale substantially in the form of Schedule C hereto describing any portion of the Nuclear Fuel to which the Lessee has title; and the Lessor shall accept such Bill or Bills of Sale.  Not earlier than five days nor later than ten days after the Lessor shall have received a Fuel Schedule hereunder, the Lessor shall pay to the Manufacturer designated in the Fuel Schedule or, as the case may be, to the Lessee the amount of the requested payment and shall complete such Fuel Schedule so delivered to it by (y) setting forth in Annex I thereto the Investment in such portion of the Nuclear Fuel as of the date of such payment and (z) executing such Fuel Schedule and delivering copies thereof to the Lessee, provided, however, that the Lessor shall not be required to make any payment pursuant to this Section 6 if and to the extent that such payment exceeds (a) the amount of the proceeds of borrowings which would be available to it under any Credit Agreement and any Secured Note Agreement then in effect under which the Lessor could make borrowings for such purpose contemporaneously with such payment, minus (b) $5,000,000.
		
	Section 7.
	Taxes.

The Lessee agrees that it will promptly pay all taxes, assessments and other governmental charges and fees levied or assessed upon the interest of the Lessee during the term of this Lease in the Nuclear Fuel or any part thereof and against the Lessor on account of the transactions, including investments, contemplated by this Lease, including without limitation, any Federal or state income, excess profits or franchise taxes against the Lessor on or measured by any moneys payable hereunder or the net income therefrom; provided, that this Section 7 shall not be deemed to obligate the Lessee to pay any taxes, assessments and other governmental charges and fees which may have been included in the Capitalized Cost of any Nuclear Fuel; and provided further, that such obligations shall survive the termination of this Lease, in whole or in part.  The Lessee further agrees at its expense to do all things required to be done by the Lessor in connection with the levy, assessment, billing or payment of any such taxes (other than Federal or state income, excess profits or franchise taxes) and is hereby authorized by the Lessor to act for and on behalf of the Lessor in any and all such respects, and to file, on behalf of the Lessor, all required tax returns and reports (other than returns and reports in respect of Federal or state income, excess profits or franchise taxes) concerning the Nuclear Fuel.

		
	Section 8.
	Condition and Use of Nuclear Fuel; Quiet Enjoyment.

(a)Each assembly of the Nuclear Fuel is leased subject to the rights of any parties in possession thereof and the state of the title thereto and the rights of ownership therein whenever the same first becomes subject to this Lease, and to all applicable zoning regulations, restrictions, rules, licenses and ordinances, building restrictions and other laws and regulations now in effect or hereafter adopted by any governmental authority having jurisdiction, and in the state and condition thereof when the same first becomes subject to this Lease, without representations or warranties of any kind by the Lessor, the Assignee, or any Person acting on behalf of any of them.  THE LESSEE ACKNOWLEDGES AND AGREES THAT THE TYPE AND DESIGN OF THE NUCLEAR FUEL HAS NOT BEEN SELECTED BY THE LESSOR OR THE TRUSTEE, THAT THE LESSOR, THE TRUSTEE OR THE ASSIGNEE HAVE NOT SUPPLIED ANY SPECIFICATIONS WITH RESPECT TO THE MANUFACTURE OF ANY PORTION THEREOF AND THAT NEITHER THE LESSOR, THE TRUSTEE, THE ASSIGNEE, EACH PERSON WHO IS A LENDER UNDER A CREDIT AGREEMENT OR A SECURED NOTE AGREEMENT NOR ANY PERSON (EXCEPT THE LESSEE) ACTING ON BEHALF OF ANY THEREOF (I) IS A MANUFACTURER OF, OR DEALER IN, NUCLEAR MATERIAL OF ANY KIND OR HAS ANY LICENSE TO USE OR POSSESS SUCH MATERIAL, (II) HAS MADE ANY RECOMMENDATION, GIVEN ANY ADVICE OR TAKEN ANY OTHER ACTION WITH RESPECT TO (A) THE CHOICE OF ANY SUPPLIER, VENDOR, PROCESSOR, DESIGNER, FABRICATOR OR TRANSPORTER OF, OR ANY OTHER CONTRACTOR WITH RESPECT TO, THE NUCLEAR FUEL OR ANY PORTION THEREOF OR (B) ANY ACTION TAKEN OR TO BE TAKEN WITH RESPECT TO THE NUCLEAR FUEL OR ANY PORTION THEREOF AT ANY STAGE OF THE NUCLEAR FUEL CYCLE, (III) HAS AT ANY TIME HAD PHYSICAL POSSESSION OF ANY PORTION OF THE NUCLEAR FUEL OR MADE ANY INSPECTION THEREOF OR (IV) HAS MADE ANY WARRANTY OR OTHER REPRESENTATION, EXPRESS OR IMPLIED, THAT THE NUCLEAR FUEL (X) WILL NOT RESULT IN INJURY OR DAMAGE TO PERSONS OR PROPERTY, (Y) HAS BEEN PROPERLY DESIGNED OR FABRICATED OR WILL ACCOMPLISH THE RESULTS WHICH THE LESSEE INTENDS THEREFOR OR (Z) IS SAFE IN ANY MANNER OR RESPECT.  NO WARRANTY HAS BEEN OR IS MADE BY THE LESSOR, THE TRUSTEE, THE ASSIGNEE OR ANY PERSON ACTING ON BEHALF OF ANY OF THEM, EXPRESS OR IMPLIED, RELATING TO THE NUCLEAR FUEL OR ANY PORTION THEREOF, WITH RESPECT TO MERCHANTABILITY, FITNESS OR OTHERWISE, WHETHER ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER PRESENT OR FUTURE LAW, OR OTHERWISE.

(b)So long as no Event of Default shall have occurred and be continuing, the Lessor hereby authorizes the Lessee at the Lessee’s cost and expense, to assert all rights and claims, and to bring suits, actions and proceedings, in its own name or in the name of the Lessor, in respect of any seller’s, Manufacturer’s (including miller’s, converter’s, enricher’s or reprocessor’s), transporter’s, designer’s or fabricator’s warranties or undertakings, express or implied, relating to any portion of the Nuclear Fuel and to retain the proceeds of any such suits, actions and proceedings.

(c)The Lessee has investigated the state of the title to and rights of ownership in the Nuclear Fuel subject to this Lease at the commencement of the term hereof, and has made a physical inspection of the Nuclear Fuel subject to this Lease at the commencement of the term hereof or reasonably prior thereto, and is satisfied with and has approved the same for all purposes hereof.  The Lessee will, from time to time after such commencement make a similar investigation and inspection of each portion of the Nuclear Fuel as the same becomes subject to this Lease, and will not permit any such portion to become subject to this 

Lease unless the Lessee is similarly satisfied with and has similarly approved the same for all purposes thereof.  No approval by the Lessee pursuant to this Section 8(c) shall affect or impair any of the Lessee’s rights under Section 8(b).

(d)So long as no Event of Default shall have occurred and be continuing, the Lessee shall have exclusive possession and use of the Nuclear Fuel.  The Nuclear Fuel may be used for any lawful purpose.  The Lessee will not do or permit any act or thing which is contrary to any Legal Requirement or Insurance Requirement or which might impair the value or usefulness of the Nuclear Fuel or any part thereof other than in the normal usage thereof in the production of electric energy.

Section 9.Maintenance of the Nuclear Fuel.

The Lessee will (i) at its own expense (without limiting the Lessee’s right to request payment by the Lessor of such expense provided in Section 6) keep the Nuclear Fuel in good condition and will promptly make or cause to be made all necessary or appropriate repairs, replacements and renewals or Restoration thereof, and (ii) at its own expense (without limiting the Lessee’s rights to request payment by the Lessor of such expense provided in Section 6) arrange for the proper Fuel Management.  All repairs, replacements and renewals shall be done in a workmanlike manner.  The Lessee will be responsible for all actions and expense necessary or appropriate for the proper utilization, preservation and safety of the Nuclear Fuel.  The Lessor shall not be required to perform any construction, or to alter, repair, rebuild or replace the Nuclear Fuel or any portion thereof, or to maintain, service or manage the Nuclear Fuel or any portion thereof in any way, and the Lessee hereby expressly waives the right to perform any construction or to make such alterations or repairs or to effect any such Fuel Management at the expense of the Lessor which may be required by any law now in effect or hereafter enacted.
		
	Section 10.
	Removals; Transfer to the Lessee; Commingling; Substitution; Location.

(a)If no Event of Default under this Lease shall have occurred and be continuing, the Lessee shall have the right at any time and from time to time during the continuance of this Lease, at the Lessee’s expense (without limiting the Lessee’s rights to request payment by the Lessor of such expense provided in Section 6) to move any assembly of the Nuclear Fuel from the Generating Facility to any other location in the continental United States for the purpose of having services performed thereon in connection with any stage of the Nuclear Fuel Cycle other than the Heat Production and Cooling stages, provided that no such action shall materially reduce the then fair market value of such assembly, and provided, further, that unless such assembly shall have been released from this Lease pursuant to Section 10(b), (i) such assembly shall be and remain the property of the Lessor, subject to this Lease and the Security Agreement, and (ii) as a condition to such removal and relocation, all necessary governmental approvals and licenses with respect thereto shall have been procured and shall be in full force and effect, all necessary recordings and filings (including financing statements and continuation statements under any applicable Uniform Commercial Code) shall have been duly made in the public offices in which such recordings and filings must be made in order to publish notice, or otherwise protect the validity and effectiveness, of this Lease and the security interest created by the Security Agreement, and all fees, taxes and charges payable in connection with such recordings and filings shall have been paid in full by the Lessee.  Any such removal shall constitute the agreement of the Lessee that the Lessee will continue to be obligated in respect of such assembly as provided in this Lease notwithstanding such removal, that the Lessee will pay or cause to be paid (except as provided in Section 6) all taxes and expenses incurred or to be incurred by the Lessor, the Lessee and the Assignee by reason of such removal and relocation, and that the indemnities by the Lessee contained in Section 11 shall extend to the use, possession, conduct or management, or any 

work, improvement, demolition or thing done in or about or in respect, of such assembly so removed to the same extent as if its place of relocation were the Generating Facility.  The provisions of this Section 10(a) shall be applicable to each subsequent removal of any assembly of the Nuclear Fuel so removed from the place of relocation to which it was removed after its initial removal from the Generating Facility.

(b)At any time and from time to time, the Lessee shall have the right to purchase any portion, but not all, of the Nuclear Fuel.  Whenever the Lessee desires to purchase any portion, but not all, of the Nuclear Fuel regardless of the then present stage of its Nuclear Fuel Cycle, then the Lessee shall deliver to the Lessor a certificate in the form of Schedule B hereto showing the Stipulated Loss Value of such portion of the Nuclear Fuel at the date of such certificate and shall pay to the Lessor, in the manner provided in Section 5(d) hereof, an amount equal to such Stipulated Loss Value.  Thereupon the Lessor shall execute and deliver to the Lessee a Bill of Sale in the form of Schedule E hereto transferring to the Lessee for no additional consideration all right, title, interest and claim of the Lessor to such portion of the Nuclear Fuel free and clear of all liens and security interests under the Security Agreement.  Thereupon such portion of the Nuclear Fuel shall cease to be Nuclear Fuel and shall cease to be subject to any provision of this Lease or of the Security Agreement.  Upon delivery of such Bill of Sale, the Lessor and the Lessee shall execute a Fuel Schedule eliminating the description of such portion of the Nuclear Fuel from Schedule A to this Lease as theretofore supplemented and amended.

(c)The Lessee shall, upon (i) the regularly scheduled final maturity of the Lessor’s borrowings under a Credit Agreement following a determination by the lenders under such Credit Agreement not to extend the maturity of such borrowings and (ii) the regularly scheduled final maturity date of one or more Secured Notes of the Lessor, in each case under circumstances where the Lessor cannot obtain funds to meet such maturities through the proceeds of borrowings which would be available to the Lessor under any Credit Agreement and any Secured Note Agreement then in effect, purchase an amount of Nuclear Fuel to be designated by the Lessee not less than 15 days prior to such purchase, by delivering to the Lessor a certificate in the form of Schedule B hereto showing that the Stipulated Loss Value of the designated Nuclear Fuel is not less than the amount of the Lessor’s borrowings maturing under the circumstances set forth above.  The Lessor shall give the Lessee at least 60 days' notice of the above maturities and circumstances.  The Lessee shall pay to the Lessor, in the manner provided in Section 5(d) hereof, an amount equal to such Stipulated Loss Value.  In addition, the Lessee shall at such time pay all Additional Rent and Advance Rent then due and payable to the Lessor.  Thereupon, the Lessor shall deliver to the Lessee a Bill of Sale in the form of Schedule E hereto transferring to the Lessee for no additional consideration, all right, title, interest and claim of the Lessor to such portion of the Nuclear Fuel free and clear of all liens and security interests under the Security Agreement.  Thereupon such portion of the Nuclear Fuel shall cease to be subject to any provision of this Lease or of the Security Agreement.  Upon delivery of such Bill of Sale, the Lessor and the Lessee shall execute a Fuel Schedule eliminating the description of such portion of the Nuclear Fuel from Schedule A to this Lease as theretofore supplemented and amended.

(d)The Lessor and the Lessee recognize that during the processing and reprocessing of Nuclear Fuel leased hereunder before and after its utilization in the Generating Facility, a Manufacturer performing services on such Nuclear Fuel may require that title thereto be transferred to such Manufacturer and such Nuclear Fuel be commingled with other nuclear fuel, with an obligation on such Manufacturer, upon completion of the services to reconvey a specified amount of Nuclear Fuel.  Accordingly, the Lessor and the Lessee agree that (i) Nuclear Fuel leased hereunder may become subject to such a contract notwithstanding any provision of this Lease to the contrary, (ii) as between the Lessor and the Lessee, such Nuclear Fuel shall be deemed to be and remain leased hereunder while title thereto is in such Manufacturer and (iii) title to the Nuclear Fuel delivered by such Manufacturer upon completion of its services automatically shall vest in the 

Lessor and such Nuclear Fuel automatically shall be leased hereunder in substitution for the Nuclear Fuel originally delivered to such Manufacturer.

(e)After the utilization of the Nuclear Fuel leased hereunder in the Generating Facility, the Lessor will at the Lessee’s request, and upon approval of such request by the Lessor, which approval shall not be unreasonably withheld, transfer title to Nuclear Fuel leased hereunder in accordance with Section 21 hereof to a third party in exchange for the simultaneous transfer to the Lessor of clear and unencumbered title to replacement Nuclear Fuel having a fair market value not less than that of the Nuclear Fuel conveyed to such third party.  The Nuclear Fuel received by the Lessor pursuant to any such exchange shall be automatically substituted for the Nuclear Fuel delivered by the Lessor and shall be deemed to be subject to this Lease.  Subject to the limitation on payment contained in Section 6, the Lessor shall pay any additional amounts required to effect such exchange.  Such payments shall increase the Acquisition Cost of the substituted Nuclear Fuel and a new Fuel Schedule reflecting transfers and such increased Acquisition Cost shall be executed and delivered by the Lessor and the Lessee.

(f)In the event of (1) the occurrence of a Nuclear Incident at either Unit No. 1 or Unit No. 2 of the Generating Facility as a result of which either Unit No. 1 or Unit No. 2 of the Generating Facility ceases to operate (or if either Unit No. 1 or Unit No. 2 of the Generating Facility is not in operation immediately prior to such Nuclear Incident, fails to resume operation as a result of such Nuclear Incident) for a period of 24 consecutive months after such occurrence or (ii) the permanent suspension, revocation or expiration of the Nuclear Regulatory Commission operating license relating to either Unit No. 1 or Unit No. 2 of the Generating Facility, or any portion thereof, with the result that the operation of either Unit No. 1 or Unit No. 2 of the Generating Facility is no longer permitted, the Lessee shall, within 120 days after the end of the 24-month period in (i) above or the permanent suspension, revocation or expiration in (ii) above, purchase such portion of the Nuclear Fuel which is capable of use only in such affected Unit No. 1 or Unit No. 2 of the Generating Facility and not in the unaffected Unit.  The Lessee shall deliver to the Lessor a certificate in the form of Schedule B hereto showing the Stipulated Loss Value of such Nuclear Fuel at the date of such certificate and shall pay to the Lessor, in the manner provided in Section 5(d) hereof, an amount equal to such Stipulated Loss Value.  Thereupon, the Lessor shall execute and deliver to the Lessee a Bill of Sale in the form of Schedule E hereto transferring to the Lessee for no additional consideration all right, title, interest and claim of the Lessor to such portion of the Nuclear Fuel free and clear of all liens and security interests under the Security Agreement.  Thereupon, such portion of the Nuclear Fuel shall cease to be Nuclear Fuel and shall cease to be subject to any provision of this Lease or of the Security Agreement.  Upon delivery of such Bill of Sale, the Lessor and the Lessee shall execute a Fuel Schedule eliminating the description of such portion of the Nuclear Fuel from Schedule A to this Lease as theretofore supplemented and amended.

Section 11.Indemnification by the Lessee.

The Lessee shall pay, and shall protect, indemnify and save harmless the Lessor, United States Trust Company of New York, the Assignee, each Person who is a lender under a Credit Agreement or a Secured Note Agreement, Merrill Lynch & Co., Inc., Merrill Lynch Money Markets Inc. and their respective officers, directors, incorporators, shareholders, partners, employees, affiliates, agents and servants from and against, all Impositions, all liabilities, taxes, losses, obligations, claims, damages, penalties, causes of action, suits, costs and expenses (including, without limitation, attorneys’ fees and expenses) or judgments of any nature arising from any and all of the following during the term of this Lease and thereafter arising in connection with this Lease: (a) any injury to or disease, sickness or death of persons, or loss of or damage to property, occurring through or resulting from any Nuclear Incident involving or connected in any way with the Nuclear Fuel or any portion thereof, or in any manner growing out of or relating to the acquisition, ownership, possession, disposition, sale, use, nonuse, misuse, 

fabrication, design, cycling, recycling, transportation, containerization, cooling, processing, reprocessing, storing, condition, operation, construction, maintenance, management, repair or rebuilding of the Nuclear Fuel or any portion thereof or resulting from the condition of the land underlying the Nuclear Fuel, (b) any use, nonuse or condition of the Generating Facility or the land underlying the Generating Facility, (c) any violation, or alleged violation, of this Lease, or of any contracts or agreements to which the Lessee is a party or by which it is bound, or any Legal Requirements, (d) performance of any labor or services or the furnishing of any materials or other property in respect of the Nuclear Fuel or any portion thereof, and (e) any infringement or alleged infringement of any patent, copyright, trade secret or other similar right relating to the Nuclear Fuel or any portion thereof provided that, Lessee shall not be required to indemnify any of the above parties with respect to any of the above arising out of such party’s gross negligence or willful misconduct.  In the event that any action, suit or proceeding is brought against the Lessor, the Assignee or any other Person indemnified or intended to be indemnified pursuant to this Section 11 by reason of any such occurrence, the Lessee will, at the Lessee’s expense, resist and defend such action, suit or proceeding or cause the same to be resisted and defended by counsel designated by the Lessee and reasonably acceptable to the Person or Persons indemnified or intended to be indemnified under this Section 11.  The obligations of the Lessee under this Section 11 shall survive any termination of the Lease, in whole or in part.
		
	Section 12.
	Inspection; Right to Enter Generating Facility.

The Lessor and its authorized representatives may enter the Generating Facility at reasonable times for the purpose of inspecting the Nuclear Fuel and the reactor in which it may be loaded from time to time (subject to availability for inspection) and discussing its condition and performance with the responsible officers, agents and employees of the Lessee.  The Lessee agrees, subject to applicable state and Federal laws and regulations, to make the Nuclear Fuel and the reactor in which it may be loaded from time to time available (to the extent practicable) for such inspection and to provide customary protective procedures and devices in connection therewith, and to make such officers, agents and employees available for such discussion promptly after receiving notice thereof.  The Lessor shall not have any duty to make any such inspection or conduct any such discussion and shall not incur any liability or obligation for not making any such inspection or for not conducting any such discussion.
		
	Section 13.
	Payment of Impositions; Recording.

(a)Subject to the provisions of Section 16 hereof, the Lessee will pay all Impositions before any fine, penalty, interest or cost may be added for non-payment, and will furnish to the Lessor, upon request, copies of official receipts or other satisfactory proof evidencing such payment.

(b)The Lessee, at its expense, shall execute, acknowledge and deliver from time to time such further counterparts of this Lease or such affidavits, certificates, Bills of Sale, financing and continuation statements and other instruments as may be reasonably requested by the Lessor in order to evidence the respective interests of the Lessor and the Lessee in the Nuclear Fuel or any portion thereof and in order to establish the character thereof as personal property, and shall, at its expense, cause such documents and any Credit Agreement and any Security Agreement if so requested by the Lessor to be recorded, filed or registered and to be re‐recorded, refiled or re-registered in such manner and at such times and in such places as may be required by any present or future law applicable to the Nuclear Fuel or any portion thereof in order to publish notice and perfect the validity of such interests.

Section 14.Compliance with Legal and Insurance Requirements, and with Instruments.

Subject to the provisions of Section 16 hereof, the Lessee at its expense will promptly (i) comply in all material respects with all Legal Requirements and Insurance Requirements, whether or not compliance therewith shall require structural or basic mechanical changes in the Generating Facility, or in any design or fabrication of the Nuclear Fuel or any portion thereof, and whether or not such compliance will interfere with the use and enjoyment of the Nuclear Fuel or any portion thereof, (ii) procure, maintain and comply with all permits, licenses and other authorizations required for the ownership of the Nuclear Fuel or any portion thereof by the Lessor, or for any operation or use of the Nuclear Fuel or any portion thereof then being made and for the proper maintenance thereof, and for the taking of all necessary and proper steps in the management of the Nuclear Fuel through each stage of the Nuclear Fuel Cycle, and (iii) comply with any other instruments of record or any contract or agreement at the time in force affecting title to or ownership of the Nuclear Fuel or any portion thereof.
		
	Section 15.
	Liens.

The Lessee will not directly or indirectly create or permit to be created or to remain, and will discharge, any mortgage, lien, encumbrance or charge on, security interest in, or conditional sale or other title retention agreement with respect to, the Nuclear Fuel or any portion thereof, or upon the Lessee’s leasehold interest therein, or upon the Basic Rent, Additional Rent, Advance Rent or any other sum payable under this Lease, other than (i) this Lease and any assignment hereof permitted hereby, (ii) liens for Impositions not yet payable, or payable without the addition of any fine, penalty, interest or cost for nonpayment, or being contested as permitted by Section 16 hereof, (iii) liens and security interests created by any Security Agreement and other liens, charges or encumbrances resulting from acts of the Lessor or securing obligations of the Lessor which the Lessee is not obligated to pay or discharge under the terms of this Lease, (iv) the title transfer and commingling of the Nuclear Fuel contemplated by Section 10(d) hereof, and (v) liens of mechanics, laborers, materialmen, suppliers or vendors, or rights thereto, incurred in the ordinary course of business for sums of money which under the terms of the related contracts are not at the time due, provided that such reserve or other appropriate provision, if any, as shall be required by generally accepted accounting principles shall have been made in respect thereto.
		
	Section 16.
	Permitted Contests.

The Lessee, at its expense, may contest after prior notice to the Lessor, by appropriate legal proceedings conducted in good faith and with due diligence, the amount, validity or application, in whole or in part, of any Imposition or lien therefor, or any Legal Requirement, or any other mortgage, lien, encumbrance, charge, security interest, conditional sale or other contract or agreement referred to in Section 15 hereof; provided that (i) in the case of an unpaid Imposition or lien therefor, such proceedings shall suspend the collection thereof from the Lessor, (ii) neither the Nuclear Fuel nor any portion thereof or interest therein would be subject to being sold, forfeited, confiscated, condemned or lost, (iii) neither the use of the Nuclear Fuel or any portion thereof, nor the taking of any step necessary or proper with respect thereto in the management thereof through any stage of the Nuclear Fuel Cycle, nor the performance of any other act required to be performed by the Lessee under this Lease would be enjoined, prevented or otherwise interfered with, (iv) the Lessor would not be subject to any additional civil liability (other than interest which the Lessee agrees to pay), or any criminal liability, for failure to pay any such Imposition or to comply with any such Legal Requirement or any such other mortgage, lien, encumbrance, charge, contract or agreement, and (v) the Lessee shall have set aside on its books adequate reserves (in accordance with generally accepted accounting principles) with respect thereto and shall have furnished such security, if any, as may be required in the proceedings or reasonably requested by the 

Lessor.  The Lessee will pay, and save the Lessor harmless against, all losses, judgments, decrees and costs, including attorneys’ fees and expenses, in connection with any such contest and will, promptly after the determination of such contest, pay and discharge the amounts which shall be levied, assessed or imposed or determined to be payable therein, together with all penalties, fines, interest, costs and expenses thereon or in connection therewith, and such indemnification by the Lessee shall survive the termination of this Lease, in whole or in part.
		
	Section 17.
	Insurance.

The Lessee shall, at its own cost and expense, procure and maintain, or cause to be procured and maintained, liability insurance and indemnification agreements with respect to the Generating Facility, including Nuclear Fuel insuring and indemnifying the respective interests of the Lessor, the Lessee, each Person who is a lender under a Credit Agreement or a Secured Note Agreement, Merrill Lynch & Co., Inc., United States Trust Company of New York and the Assignee (each of the foregoing is hereinafter sometimes called an “Insured Person”) to the full extent required under the Atomic Energy Act, or under any other law, rule or regulation.  In the event the provisions of the Atomic Energy Act with respect to liability insurance and the indemnification of owners, licensees and operators of Nuclear Fuel thereunder shall change, then the Lessee shall use its best efforts to obtain equivalent insurance and indemnification from the Nuclear Regulatory Commission or from such other governmental, public and/or private sources from which such coverage is available.  The Lessee shall, at its own cost and expense, procure and maintain, or cause to be procured or maintained, physical damage insurance with respect to the Nuclear Fuel insuring the Lessor and the Assignee against loss or damage to the Nuclear Fuel in a manner and in amounts which are consistent at all times with current prudent utility industry practice in the United States and in any case to the full extent required by law or rules or regulations having the force of law.  Such liability and physical damage insurance may be subject to such deductible amounts and the Lessee may self-insure with respect to such liability and physical damage insurance to the extent that the Lessor and the Assignee and the Lessee may consent in writing, which consent on the part of the Lessor and the Assignee shall not be unreasonably withheld, provided that such deductible amounts and such self-insurance are permitted under all applicable laws, rules and regulations.  The Lessor and the Assignee shall be additional insureds where possible, and, with respect to physical damage coverage, the Lessor and the Assignee shall be loss payees, as their interests may appear under this Lease, in all insurance policies and indemnification agreements required under this Section 17.  All such policies and indemnification agreements, where possible, shall provide for at least ten days prior written notice to the Lessor and the Assignee of any cancellation of or any material adverse change in such policies by the insurer.  The Lessee will advise the Lessor and the Assignee of all expirations (including any expiration upon cancellation by the Lessee) and renewals of policies and will upon request of the Lessor and the Assignee provide the Lessor and the Assignee with insurance certificates from its insurance brokers in respect of the insurance procured pursuant to the provisions of this Section 17.  Upon execution of this Lease and at yearly intervals thereafter, the Lessee will furnish to the Lessor and the Assignee a detailed statement as to the insurance coverage provided pursuant to this Section 17 and will further give immediate notice as to any material adverse change in the nature or availability of such coverage, including any material adverse change of which the Lessee has knowledge in the provisions of the Atomic Energy Act or any other applicable law, rule or regulation with respect to liability insurance and indemnification agreements, or any material adverse change in the application, interpretation or enforcement thereof.  The Lessor and the Assignee shall be under no duty to examine such insurance policies or indemnification agreements or to advise the Lessee in case the insurance or indemnification is not in compliance herewith.

		
	Section 18.
	Damage or Destruction.

(a)If any incident of damage to or destruction of the Generating Facility, the Nuclear Fuel or any portion thereof should occur, which damage or destruction (i) is in excess of $10,000,000 and (ii) is of such a nature as to prevent Heat Production by the Nuclear Fuel, the Lessee will promptly give notice thereof to the Lessor, generally describing the nature and extent of such damage or destruction, and unless the Lessee shall have delivered to the Lessor the certificate described in Section 20(a)(i) hereof or shall have exercised its right to obtain a release of such Nuclear Fuel or portion thereof pursuant to Section 10(b) within 90 days after the happening of such incident, the Lessee, at its cost and expense (without limiting the Lessee’s right to request payment by the Lessor of such expenses provided in Section 6), will promptly commence and will complete (subject to Unavoidable Delays but in any event within 18 months after the happening of such incident) the Restoration of the Generating Facility, the Nuclear Fuel or such portion thereof, as the case may be, whether or not the insurance proceeds, if any, on account of such damage or destruction shall be sufficient for the purpose.  Upon completion of the Restoration, the Lessee shall execute and deliver to the Lessor a Fuel Schedule and shall cause the relevant Manufacturer of the replacement Nuclear Fuel to execute and deliver to the Lessor a Bill of Sale substantially in the form of Schedule C, unless the Nuclear Fuel Contract provides for the transfer of title to the Lessor without execution and delivery by the relevant Manufacturer of a Bill of Sale; and the Lessor shall accept such Bill or Bills of Sale.  As to any damaged or destroyed Nuclear Fuel originally included on Schedule A, as amended, and replaced by such Restoration, the Lessor shall deliver to the Lessee a Fuel Schedule and a Bill of Sale substantially in the form of Schedule E hereto.

(b)If no Event of Default shall have occurred and be then continuing, all insurance proceeds received by the Lessor or the Assignee on account of any damage to or destruction of the Nuclear Fuel or any portion thereof (less the actual costs, fees and expenses incurred in the collection thereof for which the Person incurring the same shall be reimbursed from such proceeds) shall be paid to the Lessee.

Section 19.Condemnation or Eminent Domain.

(a)In case of a Taking or the commencement of any proceedings or negotiations which might result in any Taking, the Lessee will promptly give notice thereof to the Lessor, generally describing the nature and extent of such Taking which might result therefrom, as the case may be.  The Lessee hereby assigns to the Lessor any award or payment on account of any Taking of the Nuclear Fuel or any portion thereof which is payable to the Lessee.  The Lessor shall have the right to participate fully in any proceedings or negotiations in connection with any such Taking of the Nuclear Fuel or any portion thereof, provided that Lessee shall be entitled to control such proceedings or negotiations as long as no Event of Default shall have occurred and be then continuing.  The Lessee will pay all reasonable costs, fees and expenses incurred by the Lessor in connection with any Taking of the Nuclear Fuel or any portion thereof and seeking and obtaining any award or payment on account thereof.

(b)In the case of any Taking, (i) the provisions of this Lease shall remain in effect, except as expressly provided below in this Section 19, without any abatement or reduction of Basic Rent, Additional Rent, Advance Rent or any other sum payable hereunder, and (ii) unless the Lessee shall have exercised within 90 days after the happening of such Taking its right to obtain a release of such Nuclear Fuel or portion thereof pursuant to Section 10(b), the Lessee, whether or not the awards or payments, if any, on account of such Taking shall be sufficient for the purpose, at its cost and expense (without limiting the Lessee’s right to request payment by the Lessor of such expenses provided in Section 6) will promptly commence and will 

complete (subject to Unavoidable Delays but in any event within 18 months after the happening of such Taking) Restoration of the Nuclear Fuel or the portion thereof affected by such Taking, unless the Lessee shall have delivered to the Lessor the certificate described in Section 20(a)(i) hereof within 90 days after the happening of such Taking, provided that in the case of a Taking for temporary use the Lessee shall not be required to effect such Restoration until such Taking has terminated.  A Taking for temporary use shall mean a requisition of the use of the Nuclear Fuel, or any portion thereof which by its terms does not exceed the original term of this Lease or the then current extended term.  Upon completion of Restoration, the Lessee shall execute and deliver to the Lessor a Fuel Schedule, shall cause the relevant Manufacturer of the replacement Nuclear Fuel to execute and deliver to the Lessor a Bill of Sale substantially in the form of Schedule C, unless the Nuclear Fuel Contract provides for the transfer of title to the Lessor without execution and delivery by the relevant Manufacturer of a Bill of Sale, and shall deliver to the Lessor a duly executed Bill of Sale substantially in the form of Schedule C hereto describing any portion of the Nuclear Fuel to which the Lessee has title; and the Lessor shall accept such Bill or Bills of Sale.  As to any condemned or requisitioned (or otherwise taken) Nuclear Fuel originally included on Schedule A, as amended, and replaced by such Restoration, the Lessor shall deliver to the Lessee a Fuel Schedule and a Bill of Sale substantially in the form of Schedule E hereto.

(c)If no Event of Default shall have occurred and be then continuing, all awards and payments received by the Lessor on account of any Taking of the Nuclear Fuel or any portion thereof (less the actual costs, fees and expenses incurred in the collection thereof, for which the Person incurring the same shall be reimbursed from such awards or payments) shall be paid to the Collateral Account and, at the Lessee’s option, credited against the purchase price of Nuclear Fuel released pursuant to Sections 10(b) and 19(b) or paid to the Lessee in reimbursement of the cost of Restoration, as contemplated by Section 19(b).

(d)For purposes of this Lease, all amounts paid pursuant to any agreement with any condemning authority which has been made in connection with any Taking shall be deemed to constitute an award on account of such Taking.

Section 20.Termination After Certain Events.

(a)This Lease shall terminate in the manner and with the effect hereinafter set forth in Section 20(b) upon the happening of any of the following events:

(i)The Lessee shall have delivered to the Lessor a certificate of the Lessee signed by its President or any Vice President stating that the Lessee desires to terminate this Lease and the Lessor is permitted to prepay at or prior to the Termination Settlement Date all Secured Notes then outstanding pursuant to the terms of such Secured Notes;

(ii)Any change in, or new interpretation by a governmental authority having jurisdiction relating to the Price-Anderson Act, as amended, or the Atomic Energy Act, or the regulations of the Nuclear Regulatory Commission thereunder, in each case as in effect on the date of this Lease, as a result of which, in the opinion of independent counsel to the Lessor, the Lessor is prohibited from asserting any material right, protection or defense available under applicable law as of the date of this Lease with respect to civil or criminal actions brought in connection with a Nuclear Incident;

(iii)If as a result of the continuing transactions contemplated by this Lease, the Lessor or any Insured Person becomes (or with the passage of time would become), or is declared by the Securities and Exchange Commission to be, an “electric utility company” as defined in the Public 

Utility Holding Company Act of 1935, as amended, or its officers, directors, shareholders, partners or employees shall become subject to regulation under such Act;

(iv)If as a result of the transactions contemplated by this Lease the Lessor or any Insured Person becomes (or with the passage of time would become), or is declared by the Federal Energy Regulatory Commission to be a “public utility” as defined in the Federal Power Act, as amended, or its officers, directors, shareholders, partners or employees shall become subject to regulation under such Act;

(v)If as a result of the transactions contemplated by this Lease the Lessor or any Insured Person becomes (or with the passage of time would become), or is declared by any relevant governmental body to be, a public utility or similar entity under the laws of any state or its officers, directors, shareholders, partners or employees shall become subject to regulation under any such laws;

(vi)A change in any law or regulation or interpretation of any law or regulation as in effect on the date of this Lease shall be adopted or enforced by any governmental or regulatory authority (including, without limitation, the Nuclear Regulatory Commission, the Arkansas Public Service Commission, the Securities and Exchange Commission, the Federal Energy Regulatory Commission and the New York Stock Exchange), and as a result of such adoption or enforcement, approval of the transactions contemplated by this Lease shall be required and shall not have been obtained within any grace period after such adoption or enforcement, or as a result of which adoption or enforcement this Lease or any transaction contemplated hereby, including any payments to be made by the Lessee or the ownership of the Nuclear Fuel by the Lessor, shall be or become unlawful or the performance of this Lease shall be rendered impracticable in any material way;

(vii)The occurrence of a Nuclear Incident at Unit No. 1 or Unit No. 2 of the Generating Facility as a result of which Unit No. 1 and Unit No. 2 of the Generating Facility cease to operate (or if Unit No. 1 and Unit No. 2 of the Generating Facility are not in operation immediately prior to such Nuclear Incident, the failure to resume operation as a result of such Nuclear Incident) for a period of 24 consecutive months;

(viii)If Unit No. 1 and Unit No. 2 of the Generating Facility shall not be operated for a period of 24 consecutive months, and the Lessor shall have given notice to the Lessee that the Lessor desires to terminate this Lease on such account;

(ix)The permanent suspension, revocation or expiration of the Nuclear Regulatory Commission operating license relating to Unit No. 1 and Unit No. 2 of the Generating Facility, or any portion thereof, with the result that the operation of Unit No. 1 and Unit No. 2 of the Generating Facility is no longer permitted; or

(x)If the Lessor or the Lessee shall have given to the other the notice of termination provided for in Section 3(b) hereof and the termination date stated in such notice shall have occurred or the termination date of December 31, 2038 provided for in Section 3(b) shall have occurred by lapse of time.

(b)Upon the date of occurrence of any of the events listed in Section 20(a) hereof (the earliest such date being herein called the “Termination Event Date”), this Lease shall cease and terminate, except with respect to obligations and liabilities of the Lessee, actual or contingent, which arose under this Lease 

on or prior to the Termination Event Date and except for the Lessee’s obligations set forth in Sections 5, 7, 9, 13, 14 and 17 hereof, and in this Section 20(b), all of which obligations will continue until the delivery of documentation by the Lessor and the payment by the Lessee provided for below in this Section 20(b), and except that Lessee’s obligations under Section 11 hereof shall continue as set forth therein, and forthwith also upon such termination, title to, and the entire interest of the Lessor in, the Nuclear Fuel shall automatically transfer to and be vested in the Lessee, without the necessity of any action by either the Lessor or the Lessee, but subject to the rights of the Assignee under a Security Agreement and to the lien and security interest created thereby.  Title to, and the entire interest of the Lessor in, the Nuclear Fuel or any portion thereof shall, forthwith upon such termination, automatically transfer to and be vested in the Lessee or in any Person or Persons designated by the Lessee and approved by the Lessor in writing, rather than transferring to and being vested in the Lessee as aforesaid, if but only if (i) any such Person shall, upon such termination, be lawfully entitled to accept and be vested with title to the Nuclear Fuel and (ii) prior to such termination, any such Person shall have delivered an instrument to the Lessor, in form and substance satisfactory to it, executed and acknowledged by such Person and by the Lessee, pursuant to which such Person shall irrevocably (A) undertake to accept title to, and the entire interest of the Lessor in, the Nuclear Fuel forthwith upon such termination, subject to the rights of the Assignee under a Security Agreement and to the lien and security interest created thereby, (B) agree that the transfer to and the vesting in such Person of such title and interest shall occur automatically upon such termination without the necessity of any action by either the Lessor or the Lessee or such Person, and (C) undertake to execute, upon such termination, the instrument referred to below in this Section 20(b) acknowledging, among other things, that title to and ownership of the Nuclear Fuel has transferred to and vested in such Person.  As soon as possible after either the Lessor or the Lessee shall learn of the happening of any of the events listed in Section 20(a) hereof, such party shall give notice thereof to the other party hereto (and in the case of such a notice to the Lessor, signed also by such other Person in whom title to the Nuclear Fuel shall have vested as aforesaid), which notice shall (X) acknowledge that this Lease has terminated, subject to the continuing obligations of the Lessee mentioned above, and that title to and ownership of the Nuclear Fuel has transferred to and vested in the Lessee or such other Person, as the case may be, subject as aforesaid, (Y) state that on a settlement date occurring not less than 30 nor more than 120 days after the giving of notice pursuant to Section 20(a)(i) hereof and not less than 90 nor more than 120 days after the giving of notice pursuant to Sections 20(a)(ii)-(ix) hereof and on the termination date provided in Section 3(b) in the case of notice pursuant to Section 20(a)(x), which settlement date shall be specified therein (such date being herein called the “Termination Settlement Date”), the Lessee shall be obligated to pay or cause to be paid to the Lessor as the purchase price for the Nuclear Fuel an amount equal to the sum of (1) the Stipulated Loss Value of the Nuclear Fuel as of the Termination Settlement Date plus (2) the Termination Rent on the Termination Settlement Date, provided that in the case of a termination arising by virtue of the Lessor’s exercise of its rights under Section 25(b)(i) hereof, the Termination Settlement Date shall in no event be later than the termination date provided for under Section 3(b) hereof, and (Z) state that on the Termination Settlement Date, the Lessor shall be obligated to deliver to the Lessee or such other Person as the Lessee may have designated as aforesaid both a confirmatory Bill of Sale acknowledging the above-described transfer and vesting of title and ownership of the Nuclear Fuel, and an appropriate instrument duly executed by the Assignee, cancelling and discharging such Security Agreement and the liens and security interest created thereby upon the Nuclear Fuel.  Upon the delivery of such notice, the Lessor and the Lessee shall become obligated to make the payment and to deliver the documentation referred to therein on such Termination Settlement Date to the same extent as if each had acknowledged in writing its obligation so to do.  The Lessee’s obligation to make such payment shall be unconditional and unaffected by any event or matter whatsoever including, without limitation, failure of the Lessor to deliver such confirmatory documentation, or the quality, condition, existence, utility or title of or to the Nuclear Fuel.  Any such payment made by the Lessee shall not prejudice, or constitute a waiver of, any right, claim or cause of action which the Lessee shall have against the Lessor.  Such payment and delivery of documentation shall be made in accordance with Section 21 hereof.

Section 21.Conditions of Termination and Conveyance.

(a)Upon the purchase by the Lessee or such other Person pursuant to this Lease of the Lessor’s interest in the Nuclear Fuel or any portion thereof or of the Lessor’s interest in any insurance proceeds or condemnation awards (or the right to receive the same) which the Lessee is entitled to receive in connection with any such purchase by it, the Lessor will transfer the same title thereto or ownership interest therein that existed on the respective dates when the various items of property so sold first became subject to this Lease, and the Lessee or such other Person, as the case may be, shall accept the same subject to all liens, encumbrances, charges, exceptions and restrictions attaching thereto on or after the date of this Lease which have not been created by voluntary act of the Lessor or for the discharge of which the Lessee is responsible under this Lease, and to all applicable laws, regulations and ordinances, but free and clear of the lien of any Security Agreement.

(b)Upon the Termination Settlement Date specified in the notice delivered by the Lessor or the Lessee, the Lessee shall pay to the Lessor at its address for purposes of notices hereunder or to such other Person at such other place designated by the Lessor, the purchase price therefor specified herein, in Federal funds, and the Lessor shall deliver to the Lessee a confirmatory Bill of Sale acknowledging the transfer and vesting of ownership of the Nuclear Fuel and an appropriate instrument duly executed by the Assignee and/or any other necessary Person or Persons, cancelling and discharging all Security Agreements and the liens and security interests created thereby upon the Nuclear Fuel.  The Lessee shall pay all expenses in connection with such transfer, including all escrow fees, search and recording and filing fees, attorneys’ fees and all applicable Federal, state and local sales, use and other taxes which may be incurred or imposed by reason of the transfer then being made by the Lessor, or by reason of the delivery of said instrument or instruments of transfer.

(c)Notwithstanding any other provision of this Lease, whenever the Lessee has the right or obligation to purchase the Nuclear Fuel or any portion thereof or any other property pursuant to any provision of this Lease (other than Section 20(b)), the Lessee may cause such purchase to be effected by, and the Lessor shall transfer title and ownership to the subject matter of such purchase to, any other Person specified by the Lessee in a notice to the Lessor given at least 15 days prior to the date of such purchase, provided, however, that nothing specified in this subsection (c) shall in any way impair or affect the obligations of the Lessee under this Lease in connection with such purchase and provided, further, that, at the time of any such transfer to such other Person, the Lessee shall deliver to the Lessor the undertaking of the Lessee indemnifying and holding the Lessor harmless from and against any loss or liability incurred by the Lessor by reason of such transfer.

Section 22.Estoppel Certificates; Information.

The Lessee will from time to time deliver to the Lessor, promptly upon reasonable request, (i) a statement, executed by any Vice President of the Lessee, certifying the dates to which Basic Rent, Additional Rent, Advance Rent and other sums payable hereunder have been paid, that this Lease is unmodified and in full effect (or, if there have been modifications, that this Lease is in full effect as modified, and identifying such modifications) and that no Event of Default has occurred and is continuing (or, if any Event of Default has occurred and is continuing, specifying the nature and period of existence thereof and what action the Lessee is taking or proposes to take with respect thereto), and (ii) such information with respect to the Nuclear Fuel or any portion thereof, including the amounts of Stipulated Loss Value of the Nuclear Fuel or portions thereof in accordance with the Lessee’s records, as from time to time may reasonably be requested, it being intended that any such statement delivered pursuant to this Section 22 may be relied upon by the Lessor.

		
	Section 23.
	Rights to Perform the Lessee’s Covenants.

If the Lessee shall fail to make any payment or perform any act required to be made or performed by it hereunder, the Lessor, without notice to or demand upon the Lessee and without waiving or releasing any obligation or default, may (but shall be under no obligation to) at any time thereafter make such payment or perform such act for the account and at the expense of the Lessee therefor.  All payments so made by the Lessor and all costs and expenses (including, without limitation, attorneys’ fees and expenses) incurred in connection therewith or in connection with the performance by the Lessor of any such act shall constitute Additional Rent hereunder and the Lessee agrees to pay the same as provided in Section 5 hereof.
		
	Section 24.
	Assignments.

The interest of the Lessee in this Lease may be assigned, provided that such assignment shall expressly be made subject to the provisions of this Lease, and provided, further, that no such assignment shall affect or reduce any obligations of the Lessee or rights of the Lessor hereunder, and all obligations of the Lessee hereunder shall continue in full effect as the obligations of a principal, to the same extent as though no assignment had been made.
The Lessor may assign to an Assignee.  Upon written request of the Lessor, the Lessee agrees to acknowledge notice of any such assignment or the granting of a security interest in the Nuclear Fuel.
		
	Section 25.
	Events of Default and Remedies.

(a)Any of the following events of default by the Lessee shall constitute an “Event of Default” and give rise to the rights on the part of the Lessor described in Section 25(b) hereof:

(i)default in the payment of any amount payable by the Lessee under Section 10(c); or

(ii)default in the payment of any other amount payable by the Lessee hereunder and the continuance of such default for 5 days; or

(iii)default in the payment or performance of any other liability or other obligation or covenant of the Lessee to the Lessor hereunder and the continuance of such default for 30 days after the occurrence thereof; or

(iv)the Lessee admits insolvency or bankruptcy or is unable to pay its debts as they mature, or makes an assignment for the benefit of creditors or applies for or consents to the appointment of a trustee or receiver for the Lessee, or for the major part of its property other than the trustees pursuant to the Mortgage and Deed of Trust; or

(v)bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings for relief under any bankruptcy law or similar law for the relief of debtors, are instituted by or against the Lessee, and if instituted against the Lessee are allowed against the Lessee or are consented to or are not dismissed, stayed or otherwise nullified within 60 days after such institution; or

(vi)any representation or warranty made by the Lessee in this Lease, or in any related instrument, or in any report, certificate, financial statement or other instrument furnished in connection with this Lease shall prove to be false or misleading in any material respect; or

(vii)a default or event of default under any instrument evidencing indebtedness for borrowed money (or under the provisions of any agreement pursuant to which such instrument was issued) in excess of $10,000,000 and providing the holder thereof with recourse against the Lessee shall cause such indebtedness to become due prior to its stated maturity; or

(viii)one or more final judgments for the payment of money shall be rendered against the Lessee in an aggregate amount in excess of $10,000,000 and the same shall remain undischarged for a period of 30 days during which execution of such judgment shall not be effectively stayed.

(b)Upon the occurrence of any Event of Default, the Lessor may in its discretion do any one or more of the following:

(i)treat the Event of Default as an event under Section 20(a) hereof, entitling Lessor to the consequent benefits of Section 20(b) hereof and in general proceed by appropriate judicial proceedings, either at law or in equity, to enforce performance or observance by the Lessee of the applicable provisions of this Lease, or to recover damages for the breach of any thereof; or

(ii)by notice to the Lessee terminate this Lease, whereupon the Lessee’s interest and all right of the Lessee and Persons claiming through or under the Lessee to the use of the Nuclear Fuel shall forthwith terminate but the Lessee shall remain liable with respect to obligations and liabilities, actual or contingent, which arose under this Lease on or prior to the date of such termination and the Lessee’s obligations set forth in Section 11 and this Section 25(b)(ii) and, until the earlier of (1) Lessor’s taking possession of the Nuclear Fuel or Lessee’s delivering the Nuclear Fuel as set forth below or (2) final and uncontested payment of the amounts referred to in (A) and (B) below, Sections 9, 13, 14 and 17; and upon such termination the Lessor shall have the immediate right of possession of the Nuclear Fuel (to the extent not prohibited by law) and the right, at the Lessor’s election, either to enter the Generating Facility or any other premises where the Nuclear Fuel or any portion thereof is located and remove the Nuclear Fuel or such portion thereof there located (to the extent not prohibited by law) or cause the same to be done by any Person entitled by law so to do, in which case the Lessor shall not be responsible for any damage to the Generating Facility or such premises, except for damage resulting from the Lessor’s willful misconduct or gross negligence (the Lessee hereby agreeing to indemnify and hold the Lessor harmless from all losses and liabilities in respect of any such damage to the Generating Facility, such premises or the Nuclear Fuel or injury to the Lessor’s, the Lessee’s or such other Person’s employees sustained in the course of such removal, except any such damage resulting from the Lessor’s willful misconduct or gross negligence, provided that the Lessee hereby further agrees that the misconduct or negligence of the Assignee shall not be imputed to the Lessor), or to require the Lessee, at the Lessee’s expense to deliver the Nuclear Fuel or any portion thereof, properly containerized and insulated for shipping, at the Generating Facility and consigned to a Person specified by the Lessor and licensed to receive such Nuclear Fuel, in which case the risk of loss shall be upon the Lessee until such delivery is made; and the Lessor may thenceforth hold, possess and enjoy the Nuclear Fuel (to the extent not prohibited by law) and may sell the Lessor’s interest in the Nuclear Fuel or any portion thereof upon any terms deemed satisfactory to the Lessor, free from any rights of the Lessee and any Person claiming through or under the Lessee; but the Lessor shall, nevertheless, have the right to recover forthwith from the Lessee:

(A)any and all Basic Rent, Additional Rent, Advance Rent and all other amounts payable by the Lessee hereunder which may be due and unpaid immediately prior to such termination or which may then be accrued and unpaid;

(B)as liquidated damages for loss of the bargain and not as a penalty, an amount equal to the excess of (x) the sum of (i) the Stipulated Loss Value of the Nuclear Fuel as of the date of such termination of this Lease plus (ii) the Termination Rent, over (y) the amount, if any, realized by the Lessor in a sale of the Nuclear Fuel (at which the Lessor may be a purchaser), without set-off, defense or reduction other than a deduction from the sale price of all the costs of such sale, including legal fees, commissions, sales taxes and other customary charges; it being understood that the Lessor shall have no obligation to conduct any such sale, and that the Lessor may, in lieu of conducting such sale, transfer and convey title to, and its entire ownership interest in, the Nuclear Fuel to the Lessee or any trustee or liquidator therefor upon the terms and conditions set forth in Section 21, but that, if the Lessor conducts such sale, the Nuclear Fuel may be sold free and clear of all rights of the Lessee; and

(C)any and all other damages and expenses (including, without limitation, attorneys’ fees and expenses), which the Lessor shall have sustained by reason of the breach of any provision of this Lease.

The Lessee hereby waives, to the full extent not prohibited by law, any right it may now or hereafter have to require the sale, in mitigation of damages, of the Nuclear Fuel or any portion thereof consequent to an Event of Default.
(c)Pending Lessor’s exercise of any available remedy to take or deliver to a third party possession of any Nuclear Fuel, the Lessee shall be responsible for the storage of the Nuclear Fuel.

(d)The remedies herein provided in favor of the Lessor in case of an Event of Default as hereinabove set forth shall not be deemed to be exclusive, but shall be cumulative and shall be in addition to all other remedies in its favor existing at law, in equity or in bankruptcy.

Section 26.Permanent Storage or Disposal.

(a)Any other provisions of this Lease to the contrary notwithstanding, provided that the Lessor has not exercised its rights to sell such Nuclear Fuel after an Event of Default and provided that the Lessee has not surrendered such Nuclear Fuel pursuant to Section 26(a) hereof upon termination of the Lease, the Lessee shall be obligated to, at its expense, either store, dispose of or Reprocess Nuclear Fuel which has completed Heat Production.  The Lessee shall be entitled to choose whether to store, dispose of or Reprocess the Nuclear Fuel at its discretion.  If required by the Lessee in connection with such permanent storage, disposal or Reprocessing of such Nuclear Fuel, the Lessor will transfer title to such Nuclear Fuel to the Lessee at the Lessee’s request, pursuant to a Bill of Sale in the form of Schedule E hereto, and the Lessor and the Lessee shall execute a Fuel Schedule reflecting such transfer.

(b)When any assembly of Nuclear Fuel is no longer useful for Heat Production, the Lessor shall be entitled to transfer title to such assembly of Nuclear Fuel to the Lessee, pursuant to a Bill of Sale in the form of Schedule E hereto.  A Fuel Schedule reflecting such transfer shall be executed and delivered by the Lessor and the Lessee.

(c)Any provision of this Lease to the contrary notwithstanding, the Lessee will not move any assembly of Nuclear Fuel which has been in Heat Production from the Generating Facility unless it shall notify the Lessor, and shall, if requested by the Lessor, have repurchased such assembly.  A Fuel Schedule reflecting such transfer shall be executed and delivered by the Lessor and the Lessee.

Section 27.No Merger.

There shall be no merger of this Lease or of the leasehold interest created by this Lease with the absolute ownership interest in the Nuclear Fuel or any portion thereof by reason of the fact that the same Person may acquire or own or hold, directly or indirectly, (i) this Lease or the leasehold interest created by this Lease or any interest in this Lease or in any such leasehold interest and (ii) the absolute ownership or other interest in the Nuclear Fuel or any portion thereof, and no such merger shall occur unless and until all Persons, including the Assignee, having any interest in (y) this Lease or the leasehold interest created by this Lease and (z) the absolute ownership or other interest in the Nuclear Fuel or any portion thereof shall join in an instrument effecting such merger and shall duly record the same.
		
	Section 28.
	Notices.

Any notices provided for in this Lease shall be in writing and shall be deemed to have been duly given when delivered personally or otherwise actually received or five days after the same have been deposited in the United States mail, registered, postage prepaid, addressed as follows:
	
		
	If to the Lessor:
(with a copy to the Assignee)
	River Fuel Trust #1
United States Trust Company of New York
45 Wall Street
New York, New York  10005
Attention:Corporate Trust and Agency Division; Department B

	If to the Lessee:
	Arkansas Power & Light Company
425 West Capitol
P.O. Box 551
Little Rock, Arkansas  72203
Attention:Treasurer

and if to the Assignee, then at such address as shall have been designated by such Assignee by notice duly given to the Lessee, or at such other place as any of the parties may designate by notice duly given in accordance with this Section.
		
	Section 29.
	Allocation of Amounts.

Lessee agrees to cooperate in good faith with the Lessor in determining appropriate accruals and allocations pursuant to the terms of this Lease and to provide any other calculations and information which are necessary or appropriate in order to assist the Lessor in performing its obligations.  Whenever, under Section 1, 5, 6, 10, 18(a), 19(b) or 22, computations are required to be made involving a cost, price, payment, charge, factor, discount or any other amount relating to a single assembly of the Nuclear Fuel, such cost, price, payment, charge, factor, discount or other amount shall be determined in the reasonable judgment of the Lessee.  Unless the Lessee shall have informed the Lessor otherwise in writing or unless otherwise set forth in any of the Schedules attached hereto or furnished pursuant to this Lease, allocation shall be made by dividing the aggregate of all such costs, prices, payments, charges, discounts or any other amounts which are known to have been incurred, paid, accrued or arisen, at approximately the same time and in the same general transaction or computation, with respect to such assembly and one or more 

other assemblies of the Nuclear Fuel, into as many equal parts as there are such assemblies, and allocating one of the parts so divided to each such assembly.  In the event that any such cost, price, payment, charge, discount or any other amount must be certified pursuant to this Lease, the Person making such certification shall be the sole judge of the propriety of making any such allocation, and such Person need only place the term “(allocated)” before or after any cost, price, payment, charge, discount, or any other amount so certified in order to (i) establish the propriety of making such an allocation and (ii) give the warranty of such Person as to the accuracy of the allocation so certified and its compliance with the provisions of this Section 29.
		
	Section 30.
	Amendments.

This Lease may not be amended, modified or terminated, nor may any obligation hereunder be waived, orally, and no amendment, modification, termination or waiver shall be effective for any purpose unless it is in writing, signed by the party against whom enforcement thereof is sought, except that amendments of Schedule A hereto pursuant to Section 6, 10, 18(a) or 19(b) hereof shall be made in accordance with the provisions of such Sections.
		
	Section 31.
	Severability.

Any provision of this Lease which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  To the extent permitted by applicable law, the Lessor and Lessee hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.
		
	Section 32.
	Job Incentive Credit and Investment Credit.

To the extent that the Nuclear Fuel is or becomes eligible for the job incentive credit or the investment credit or service credit under the Internal Revenue Code as in effect on the date of this Lease or thereafter amended from time to time, the Lessor at the Lessee’s request shall elect to treat the Lessee as having acquired the Nuclear Fuel, and shall provide the Lessee with an appropriate credit election.  The Lessee shall provide the Lessor with a report or statement with respect to all Nuclear Fuel as to which such credit election is applicable, and such report or statement shall be in such form as may be required for Internal Revenue Service reporting.
		
	Section 33.
	Miscellaneous.

(a)United States Trust Company of New York has not executed this Lease in its individual capacity, but solely on behalf of River Fuel Trust #1 as Trustee under the Trust Agreement.  In no case whatsoever shall United States Trust Company of New York or any agent thereof (or any entity acting as a successor trustee, co-trustee or separate trustee under the Trust Agreement) or the Trustor be personally liable on, or for any loss in respect of, any of the statements, representations, warranties, agreements or obligations of the Lessor hereunder, as to all of which the Lessee agrees to look solely to the Trust Estate, except for any loss, damage or injury caused by the United States Trust Company of New York’s willful misconduct or gross negligence (provided that this exception shall not be deemed to apply to the extent that United States Trust Company of New York has followed instructions, allocations, calculations or information given to it by parties authorized to do so, or which it is authorized to accept, pursuant to the Trust Agreement).

(b)The Lessee agrees that if a successor trustee is appointed in accordance with the terms of the Trust Agreement, such successor trustee shall, without further act, succeed to all the rights, duties, immunities and obligations of the Trustee hereunder and the predecessor trustee shall be released from all further duties and obligations hereunder, all without the necessity of any consent or approval by the Lessee and without in any way altering the terms of this Lease or the Lessee’s rights or obligations hereunder.  The trustee under the Trust Agreement or any successor trustee thereunder may from time to time appoint one or more co-trustees or separate trustees pursuant to the terms of the Trust Agreement to exercise or hold any or all of the rights, power and title of Lessor hereunder, without the necessity of any consent or approvals by the Lessee and without in any way altering the terms of this Lease or the Lessee’s rights or obligations hereunder.  One such appointment and designation of a co-trustee or separate trustee shall not exhaust the right to appoint further co-trustees or separate trustees pursuant to the Trust Agreement, and such right may be exercised repeatedly so long as this Lease shall be in effect.  Except to the extent there shall be only one trustee, and such trustee shall be United States Trust Company of New York, at least one trustee shall at all times be a bank or trust company, organized under the laws of the United States of America, any State thereof or the District of Columbia, having a combined capital and surplus of at least $500,000,000.

(c)The Lessee shall, at its expense, upon receipt of written notice of the appointment of a successor trustee, co-trustee or separate trustee under the Trust Agreement, promptly make such modifications and changes to reflect such appointment as shall be reasonably requested by such successor trustee, co-trustee or separate trustee in such insurance, schedules, supplements, certificates and other instruments relating to the Nuclear Fuel as shall be specified by such successor trustee, co-trustee or separate trustee, all in form and substance satisfactory to such successor trustee, co-trustee or separate trustee and its counsel.

(d)The Lessor agrees that (i) the Lessor will not enter into any Credit Agreement, Secured Note Agreement or Security Agreement or amend or modify or consent to any amendment or modification of a Credit Agreement, Secured Note Agreement or Security Agreement without the prior written consent of the Lessee, and (ii) the Lessor will at all times use its best efforts to comply with, observe and perform all of the covenants and agreements required to be complied with, observed or performed by the Lessor under a Credit Agreement, Secured Note Agreement or Security Agreement.  The Lessee agrees to furnish such documents and certificates as may be required in this regard.

(e)The Lessor and the Lessee agree that the rights, duties and obligations of the Lessee hereunder may be exercised or performed, as the case may be, by System Energy Resources, Inc. (“SERI”), as agent for the Lessee, pursuant to the terms of the Operating Agreement to be entered into between the Lessee and SERI as filed with the Securities and Exchange Commission in File No. 70-7570 and to the extent such filing shall be approved; provided that the ability of the Lessee to exercise its rights under this Lease, and the requirement of the Lessee to perform its duties and obligations shall not be affected by the appointment of SERI as the Lessee’s agent.

(f)The terms and provisions of this Lease supersede all prior negotiations and oral understandings, if any, between the Lessor and the Lessee with respect to the transactions contemplated hereby.  The captions in this Lease are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.  This Lease shall in all respects be governed by, and construed in accordance with, the laws of the State of New York including all matters of construction, validity and performance.

IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed by their respective officers thereunto duly authorized, as of the day and year first above written.
	
	
	RIVER FUEL TRUST #1
By:United States Trust Company
of New York, as Trustee
By:/s/ Louis P. Young
Assistant Vice President

	ARKANSAS POWER & LIGHT COMPANY
By:/s/ Lee W. Randall
Vice President
LESSEE

    
	
		
	STATE OF NEW YORK
	)

	 
	)   ss.:

	COUNTY OF NEW YORK
	)

On this 22nd day of December, 1988, before me, a Notary Public in the State of New York personally appeared Louis P. Young, to me personally known, who being by me duly sworn did say that he is an officer of the Trustee of River Fuel Trust #1, and that said instrument was signed on behalf of the said trust and the said officer acknowledged the execution of said instrument to be the voluntary act and deed of said Trust by it voluntarily executed.
	
				
	 
	/s/ Michael R. Stolfi
Notary Public

	[NOTARIAL SEAL]
	Michael R. Stolfi
NOTARY PUBLIC, State of New York
No. 24-4906294
Qualified in Kings County
Commission Expires  October 05, 1989

	
				
	STATE OF NEW YORK
	)
	 

	 
	)   ss.:
	 

	COUNTY OF NEW YORK
	)
	 

On this 21st day of December, 1988, before me, a Notary Public in the State of New York personally appeared Lee W. Randall, to me personally known, who being by me duly sworn did say that he is a Vice President of ARKANSAS POWER & LIGHT COMPANY, and that said instrument was signed on behalf of the said corporation by authority of its Board of Directors and the said Vice President acknowledged the execution of said instrument to be the voluntary act and deed of said corporation by it voluntarily executed.
	
		
	 
	/s/ Michael R. Stolfi
Notary Public

	[NOTARIAL SEAL]
	Michael R. Stolfi
NOTARY PUBLIC, State of New York
No. 24-4906294
Qualified in Kings County
Commission Expires  October 05, 1989

    

SCHEDULE A

DESCRIPTION OF NUCLEAR FUEL
	
		
	Date:
	 

	Revision:
	 

	
						
	Assembly Serial No.
	Contained Uranium
in Kg. U.
at B.O.L *  
	Average Enrichment (Weight Percentage U235)
	Allocated Acquisition Cost
	Allocated Capitalized Cost
	Allocated Investment

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

* B.O.L. = Beginning of Life

	
		
	Date:
	 

	Revision:
	 

SCHEDULE B

QUARTERLY RENT SCHEDULE

STIPULATED LOSS VALUE CONFIRMATION
Cost Attributable to Quarter Ending

	
								
	1
	2
	3
	4
	5
	6
	7
	8

	Assembly Serial No
	S.L.V. as of the End of Prior Quarter
	Allocated Acquisition Costs
	Allocated Capitalized Costs (other than Allocated Capitalized Daily Lease Charges)
	Daily Lease Charges to be Allocated to and Included in Capitalized Cost
	Burn-Up Charges
	S.L.V. At the Date Hereof (to be Used Only if Fuel is Being Added or Removed)
	S.L.V. at the End of this Quarter

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	
		
	(Lessor)
	(Lessee)

	By:  
Title
(acknowledging acceptance)
	By:  
Title
(acknowledging acceptance)

NOTES:
Columns 1.2.3 and 4 filled in by the Lessor when it forwards quarterly Daily Lease Charges to Lessee.
Colums 5.6.7 and 8-inserted by the Lessee.
Column 5-represents that portion of Daily Lease Charges attributable to a period during which Nuclear Fuel is not in commercial operation or in Heat Production.
Column 6-the Lessee's calculation of Burn-Up Charge.
Column 7-used only when Fuel is added or removed.
Annexes I and II are a part hereof.
Any allocation shall be made in the sole judgment of Lessee.

    

    

ANNEX I TO SCHEDULE B
(To be filled in by the Lessee)

Calculation of Burn-Up Charges and Basic Rent

	
								
	1
	2
	3
	4
	5
	6
	7
	 

	 
	 
	Fill in only if first time or if MWhr Factor being revised
	 
	 
	 
	 

	Assembly Serial No.
	Allocated S.L.V.
	Estimated Residual Value
	Est. Design MWhr Output Remaining
	MWhr* Factor
	MWhr** Output
	Burn-Up Charge
(Col. 5 x 
Col. 6)
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	Total Burn-Up Charge =
	 
	 
	 

	 
	 
	 
	 
	 
	$
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	RENT CALCULATION
	 
	 
	 

	1. Burn-Up Charge (from above)
	 
	$
	 

	2.A.  Quarterly Lease Charge$
	 
	 
	 

	B.  Less:  Amount Capitalized  (see
Column 5 of Quarterly Rent Schedule)$
	 
	  
	 

	Basic Rent for Quarter =
	 
	$
	 

	 
	 
	$
	 

	Estimated Burn-Up Charge next quarter 
(for information only)
	$
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	*Col. 2-Col. 3 = Col. 5
Col. 4
	 
	 
	 

	**For the preceding quarter-annual period in connection with Heat Production.

ANNEX II TO SCHEDULE B
(To be filled in by the Lessor)*

Summary of Daily Lease Charges** 
	
					
	Date
	Interest Cost or Discount Amortization
	Credit Agreement Fees
	Other Fees, Costs and Expenses
	Total Daily Lease Charge

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

Unamortized Discount on Commercial
Paper Notes, if any, as of end of 
Quarter    $__________Quarterly Lease Charge    $__________

*    To be completed separately for Nuclear Fuel not in Heat Production. Check applicable box:
[  ]   In Heat Production
[  ]   Not in Heat Production

**    To be calculated in accordance with the definition in the Lease.

SCHEDULE C

BILL OF SALE
TO
RIVER FUEL TRUST #1

KNOW ALL MEN BY THESE PRESENTS, that the undersigned, _______________, a __________________________ corporation (the “Vendor”), whose post office address is __________________________, for and in consideration of the sum of $_________ paid to the Vendor upon or before the execution and delivery of this Bill of Sale to River Fuel Trust #1, a New York trust (the “Purchaser”), whose post office address is c/o United States Trust Company of New York, 45 Wall Street, New York, New York 10005, hereby conveys, transfers, sells and sets over all of its right, title and interest in all of the personal property consisting of the assemblies of nuclear fuel or components thereof or other nuclear material described in Annex I hereto (the “Nuclear Fuel”), and by this Bill of Sale does hereby grant, bargain, sell, transfer and deliver the Nuclear Fuel unto the Purchaser, to have and to hold the Nuclear Fuel, for itself, its successors and assigns, forever.
The Vendor hereby warrants itself to be the true and lawful owner of the Nuclear Fuel and to have full power, good right and lawful authority to dispose of the same in the aforesaid manner, and the Vendor for itself, its successors and assigns, does hereby covenant and agree with the Purchaser, its successors and assigns, to warrant and defend the true ownership of the Nuclear Fuel by the Purchaser against the claims and demands of all and every person and persons.
The Vendor and the Purchaser hereby acknowledge that, notwithstanding the sale of the Nuclear Fuel by the Vendor to the Purchaser hereunder the Nuclear Fuel will be in the possession of Arkansas Power & Light Company, or in the possession of a manufacturer processing or reprocessing the Nuclear Fuel for the account of Arkansas Power & Light Company, pursuant to a Fuel Lease dated as of December 22, 1988, between the Purchaser, as lessor, and Arkansas Power & Light Company, as lessee.  On the date hereof, the Purchaser is licensed to own, but not to possess, the Nuclear Fuel, and under no circumstances shall a transfer of possession of the Nuclear Fuel to the Purchaser be necessary for the transfer of ownership effected and intended to be effected by this Bill of Sale.

IN WITNESS WHEREOF, The Vendor has caused this Bill of Sale to be executed in its corporate name, by one of its Vice Presidents, and to be dated ____________________, 19___.
	
	
	By
Vice President

3

ACCEPTANCE
THIS BILL OF SALE is accepted by the undersigned as of the date last above written.
	
	
	RIVER FUEL TRUST #1
By:United States Trust Company of 
New York, as Trustee
By:
Title:

ANNEX I

Description of Nuclear Fuel
    
    

	
		
	STATE OF 
	)

	 
	)   ss.:

	COUNTY OF 
	)

On this _____ day of ________, 19___, before me, a Notary Public in the State of ____________, personally appeared _______________, to me personally known, who being by me duly sworn did say that he is the Vice President of _______________________, and that said instrument was signed on behalf of the said ____________ acknowledged the execution of said instrument to be the voluntary act and deed of said corporation by it voluntarily executed.
	
		
	 
	Notary Public

	My Commission Expires:
	 

	
		
	STATE OF 
	)

	 
	)   ss.:

	COUNTY OF 
	)

On this _____ day of __________, 19__, before me, a Notary Public in the State of _______________, personally appeared_______________, to me personally known, who being by me duly sworn did say that he is an officer of the Trustee of River Fuel Trust #1, and that said instrument was signed on behalf of the said trust and the said officer acknowledged the execution of said instrument to be the voluntary act and deed of said Trust by it voluntarily executed.
	
		
	 
	Notary Public

	My Commission Expires:
	 

SCHEDULE D

FUEL SCHEDULE NO._____

FUEL SCHEDULE NO. _____ dated as of __________, 19_____, between RIVER FUEL TRUST #1, a New York trust (“Lessor”), whose post office address is c/o United States Trust Company of New York, 45 Wall Street, New York, New York 10005, and ARKANSAS POWER & LIGHT COMPANY, an Arkansas corporation (“Lessee”) whose post office address is P.O. Box 551, Little Rock, Arkansas  72203.
W I T N E S S E T H:
WHEREAS, the Lessor and the Lessee have heretofore entered into that certain Fuel Lease dated as of December 22, 1988 (herein as heretofore supplemented and amended, called the “Lease”), the defined terms therein being used herein with the same meanings as provided in the Lease; and
WHEREAS, the Lease provides in Sections 6, 10, 18 and 19 thereof for Fuel Schedules, amending Schedule A to the Lease, to be executed and delivered from time to time.
NOW, THEREFORE, in consideration of the premises and other good and sufficient consideration and in compliance with the requirements of the Lease, the Lessor and the Lessee hereby agree as follows:
1.    The Lessee certifies that the amounts set forth in Annex I hereto as Acquisition Costs, Capitalized Costs and Investment, respectively, are true and correct and have been computed in accordance with the provisions of the Lease.
2.    The Lessee requests the Lessor to make direct payment to the Manufacturers named in Annex I of the amounts specified in Annex I and to pay the Lessee  in an amount equal to $__________ for costs previously incurred by the Lessee or paid by the Lessee directly to the Manufacturers.  All of the amounts for which payment is hereby requested are included in Acquisition Costs and Capitalized Costs certified in paragraph 1 above and none of said amounts have been previously paid by Lessor pursuant to Section 6 of the Lease.
3.    (a)    Schedule A to the Lease is hereby supplemented and amended so as to include those assemblies of Nuclear Fuel or the component parts thereof described in Annex II hereto (the “Additional Nuclear Fuel”) and to subject such Additional Nuclear Fuel to the Lease (and if any Nuclear Fuel is simultaneously being removed, to eliminate from Schedule A as theretofor supplemented and amended the description of Assemblies Nos._____, _____, _____ and _____).  The Lessee represents and warrants that the Additional Nuclear Fuel complies with all requirements of the Lease and of law, and all necessary recordings and filings (including financing statements and continuation statements under any applicable Uniform Commercial Code) have been duly made in the public offices in which such recordings and filings must be made in order to subject, and publish notice of the subjection of such Additional Nuclear Fuel to the Lease, and all fees, taxes and charges payable in connection with such recordings and filings have been paid in full by the Lessee.
(b)    The Lessee hereby covenants and agrees with the Lessor to warrant and defend the true ownership by the Lessor of the Additional Nuclear Fuel against the claims and demands of every person.  The Lessee further warrants that such property is, and is intended to be and remain, personal property, is not and has not been affixed to any land and is free and clear of all claims, liens, security interests and other encumbrances whatsoever, except as permitted by all Security Agreements.

4.    Except as hereinbefore expressly modified and amended, the Lease is ratified and confirmed in all respects, including, without limitation, the obligation of the Lessee to pay all installments of Basic Rent and Additional Rent and other amounts to be paid by the Lessee under the Lease.

IN WITNESS WHEREOF, the Lessor and the Lessee have caused this Fuel Schedule to be duly executed as of the date first above written.
	
	
	RIVER FUEL TRUST #1
ByUnited States Trust Company of New York, as Trustee
By
Title: 

	ARKANSAS POWER & LIGHT COMPANY
By
               Authorized Officer

ANNEX I TO SCHEDULE D
	
		
	Date:
	 

	Revision:
	 

	
					
	Material or Service Supplied
	Vendor (and location of Vendor Facility)
	Cumulative Allocated Acquisition Cost
	Cumulative Allocated Capitalized Cost
	Cumulative Allocated Investment

	U3O8 Supply
	 
	 
	 
	 

	Conversion
	 
	 
	 
	 

	Enrichment
	 
	 
	 
	 

	Fabrication
	 
	 
	 
	 

	Reprocessing
	 
	 
	 
	 

	Other (Identify)
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

COSTS TO BE PAID BY LESSOR
	
						
	Invoice Number
	Batch
	Service
	Invoice Amount
	Interest Accrued
	Total

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	$
	$
	$

ANNEX II TO SCHEDULE D

	
		
	Date:
	 

	Revision:
	 

	
									
	Batch
	Assembly Serial No.
	Contained Uranium in kg. U. at B.O.L. *
	Average Enrichment (Weight Percent U235)
	(3)
Cumulative Allocated Acquisition
Cost
	(1)
Cumulative Allocated Acquisition
Cost
	(4)
Cumulative Allocated Capitalized
Cost
	(2)
Additional
Allocated Capitalized
Cost
	(3+4)

Cumulative Allocated Investment

	 
	 
	 
	 
	$
	$
	$
	$
	$

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

    
*  B.O.L. = Beginning of Life.

SCHEDULE E 

BILL OF SALE 

from 

RIVER FUEL TRUST #1 

to 

ARKANSAS POWER & LIGHT COMPANY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned River Fuel Trust #1, a New York trust (the “Fuel Company”), whose post office address is c/o United States Trust Company of New York, 45 Wall Street, New York, New York 10005 for and in consideration of the sum of $1.00 paid to the Fuel Company upon or before the execution and delivery of this Bill of Sale to Arkansas Power & Light Company, an Arkansas corporation (the “Utility”), whose post office address is P.O. Box 551, Little Rock, Arkansas  72203, hereby conveys, transfers, sells and sets over all of its right, title, interest and Fuel described in Annex I hereto and by this Bill of Sale does hereby grant, bargain, sell, transfer and deliver all of its right, title, interest and claim in and to such property to the Utility to have and to hold, for itself and assigns, forever.  THE NUCLEAR FUEL IS TRANSFERRED AND CONVEYED BY THE TRUST ON AN “AS-IS”, “WHERE-IS” BASIS, WITHOUT RECOURSE AGAINST OR REPRESENTATION OR WARRANTY (EXPRESS OR IMPLIED) OF ANY KIND WHATSOEVER, INCLUDING ANY WARRANTY OF FITNESS FOR PARTICULAR PURPOSE OR MERCHANTIBILITY, ON THE PART OF THE TRUST, EXCEPT THAT THE TRUST REPRESENTS AND WARRANTS THAT IT HAS NOT VOLUNTARILY GRANTED OR CREATED ANY LIEN ON THE NUCLEAR FUEL OTHER THAN THOSE PERMITTED BY SECTION 15 OF THE LEASE AGREEMENT.
Morgan Guaranty Trust Company of New York, as Collateral Agent, whose post office address is 30 West Broadway, New York, New York 10015, joins in the execution of this Bill of Sale but only to consent as secured party under the Security and Collateral Agency Agreement dated as of December 22, 1988, between it and the Fuel Company to the execution and delivery of this Bill of Sale, and does hereby cancel and discharge the Security Agreement with respect to the property described in Annex I hereto and releases such property from all liens and security interests under the Security Agreement.

IN WITNESS WHEREOF, the Fuel Company has caused this Bill of Sale to be executed, and _____________________________________________________________ joins herein as aforesaid, in their respective corporate names by one or more of their respective duly authorized officers.
	
		
	Dated:
	RIVER FUEL TRUST #1

By: United States Trust Company of 
New York, as Trustee

By

	 
	Contented to by:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, AS COLLATERAL AGENT
By
Title:

    

ACCEPTANCE
THIS BILL OF SALE is accepted by the undersigned as of the date last above written.
	
	
	ARKANSAS POWER & LIGHT COMPANY
By:
Authorized Signature

ANNEX I
Description of the Nuclear Fuel
    

	
		
	STATE OF 
	)

	 
	:   ss.:

	COUNTY OF 
	)

On this _____ day of __________, 19___, before me, a Notary Public in the State of ____________ personally appeared _______________, to me personally known, who being by me duly sworn did say that he is the __________ of ARKANSAS POWER & LIGHT COMPANY, and that said instrument was signed on behalf of the said corporation by authority of its Board of Directors and the said __________ acknowledged the execution of said instrument to be the voluntary act and deed of said corporation by it voluntarily executed.
	
		
	 
	Notary Public

	My Commission Expires:
	 

	
		
	STATE OF 
	)

	 
	:   ss.:

	COUNTY OF 
	)

On this _____ day of __________, 19__, before me, a Notary Public in the State of _______________ personally appeared_______________, to me personally known, who being by me duly sworn did say that he is an officer of the Trustee of River Fuel Trust #1, and that said instrument was signed on behalf of the said trust and such officer acknowledged the execution of said instrument to be the voluntary act and deed of said trust by it voluntarily executed.
	
		
	 
	Notary Public

	My Commission Expires:
	 

	
		
	STATE OF 
	)

	 
	:   ss.:

	COUNTY OF 
	)

On this _____ day of __________, 19__, before me, a Notary Public in the State of _______________ personally appeared_______________, and ___________________ to me personally known, who being by me duly sworn did say that they are a ______________ and ____________, respectively, of Morgan Guaranty Trust Company of New York, and that said instrument was signed on behalf of the said Morgan Guaranty Trust Company of New York, by authority of its Board of Directors and the said _______________ and _______________ acknowledged the execution of said instrument to be the voluntary act and deed of said Morgan Guaranty Trust Company of New York, by it voluntarily executed.
	
		
	 
	Notary Public

	My Commission Expires:
	 

    

    

SCHEDULE F

FORM OF ASSIGNMENT AGREEMENT
KNOW ALL MEN BY THESE PRESENTS THAT:

                                                                                                           (the “Assignor”), in consideration of one dollar and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, does hereby sell, grant, bargain, convey and assign to                                                                               , not in its individual capacity but solely as trustee (in such capacity called the “Assignee”), under the Trust Agreement dated as of December  , 1988 (said Trust Agreement, as the same may from time to time be amended, modified or supplemented, being herein called the “Trust Agreement”), among it and the Trustor and the Beneficiary named therein, all right, title and interest of the Assignor in, to and under all the property described in Exhibit 1 attached hereto (all of such property being herein collectively called the “Property”).
TO HAVE AND TO HOLD the Property unto the Assignee, its successors and assigns, to its and their own use forever.
1.    The interest of the Assignor in the Property, and the interest transferred by this Assignment, is that of absolute ownership.
2.    The Assignor hereby warrants that it is the lawful owner of the rights and interests conveyed by this Assignment and that its title to such rights and interests is hereby conveyed to the Assignee free and clear of all liens, charges, claims and encumbrances of every kind whatsoever, other than (i) the amounts, if any, owing under the Contract (as such term is defined in Exhibit 1 attached hereto), (ii) other claims, if any, of the Assignor and the Contractor (as such term is defined in Exhibit 1 attached hereto) which may exist as between themselves and (iii) other liens, charges, claims and encumbrances permitted by the Lease Agreement (as hereinafter defined); and that the Assignor will warrant and defend such title forever against all claims and demands whatsoever.
3.    In order that the Contractor may transfer to the Assignee clear title to the Nuclear Fuel (as such term is defined in Exhibit 1 attached hereto) on its delivery date, the Assignor hereby releases and transfers to the Assignee any right, title or interest in the Nuclear Fuel which may have been acquired by the Assignor under the Contract prior to the date hereof.
4.    This Assignment is made in accordance with a Fuel Lease dated as of December _____, 1988, between the  Assignor and the Assignee (said Lease Agreement, as the same may be from time to time amended, modified or supplemented, being herein called the “Lease Agreement”).  Pursuant to a Security and Collateral Agency Agreement dated as of December _____, 1988 (said Security and Collateral  Agency Agreement, as the same may from time to time be amended, modified or supplemented, being herein called the “Security Agreement”) made by Assignee in favor of                                                           (the “Collateral Agent”), the Assignee is assigning and granting a security interest in the Property and the Assignment to the Collateral Agent for the ratable benefit of the secured parties (the “Secured Parties”) named in the Security Agreement, as collateral security for all obligations and liabilities of the Assignee to the Secured Parties, as such obligations are described in the Security Agreement.
5.    It is expressly agreed that, anything contained herein to the contrary notwithstanding, (a) the Assignor shall at all times remain liable to the Contractor to observe and perform all of its duties and obligations under the Contract to the same extent as if this Assignment and the Security Agreement had not been executed, (b) the exercise by the Assignee or the Collateral Agent of any of the rights assigned 

hereunder or under the Security Agreement, as the case may be, shall not release the Assignor from any of its duties or obligations to the Contractor under the Contract, and (c) neither the Assignee nor the Collateral Agent, nor any of the other Secured Parties shall have any obligation or liability under the Contract by reason of or arising out of this Assignment, the Lease Agreement or the Security Agreement, or be obligated to perform or fulfill any of the duties or obligations of the Assignor under the Contract, or to make any payment thereunder, or to make any inquiry as to the nature or sufficiency of any Property received by it thereunder, or to present or file any claim, or to take any action to collect or enforce the payment of any amounts or the delivery of any Property which may have been assigned to it or to which it may be entitled at any time or times; provided, however, the Assignee agrees, solely for the benefit of the Assignor, and subject to the terms and conditions of the Lease Agreement, (i) to purchase the Nuclear Fuel from the Contractor pursuant to the Contract and (ii) to pay to the Contractor and/or to the Assignor or their order the respective amounts specified in the Lease Agreement with respect to such Nuclear Fuel.
6.    Notwithstanding anything contained herein to the contrary, subject to the terms and conditions of the Lease Agreement, the Assignor may continue to engage in Fuel Management (as such term is defined in the Lease Agreement) with respect to the Property, including, without limitation, all dealings with the Contractor and, subject to such terms and conditions, the Assignee reassigns to the Assignor the Assignee’s rights under any warranty or agreement made by the Contractor in the Contract with respect to the Nuclear Fuel.
7.    The Assignor agrees that at any time and from time to time, upon request of the Assignee or the Collateral Agent, and, subject to Section 13(b) of the Lease Agreement, at the sole expense of the Assignor, the Assignor will promptly and duly execute and deliver any and all such further instruments and documents and take such further action as the Assignee or the Collateral Agent may reasonably request in order to obtain the full benefits of this Assignment and the security interest therein granted in the Security Agreement and of the rights, powers and interests herein and therein granted, including, without limitation, the filing of any financing or continuation statements under the Uniform Commercial Code in effect in any jurisdiction with respect to the transfer of Assignor’s right, title and interest in the Property provided for hereby and the security interest granted by the Security Agreement and the appearance in the prosecution or defense of any lawsuit with respect to the rights, powers and interests herein granted (or with respect to the grant herein of such rights, powers and interests) where such appearance, prosecution or defense by the Assignor is necessary to allow Assignee or the Collateral Agent to obtain the full benefits of this Agreement.  The Assignor hereby also authorizes the Assignee and the Collateral Agent to file any such financing or continuation statement without the signature of the Assignor to the extent permitted by applicable law.  The Assignor will mark its books and records pertaining to the Contract to evidence this Assignment and the transfer of Assignor’s right, title and interest in the Property provided for hereby.
8.    In any suit, proceeding or action brought by the Assignee under the Contract to enforce any provisions thereof, the Assignor will save, indemnify and keep the Assignee harmless from and against all expenses, loss or damage suffered by reason of any defense, set-off, counterclaim, recoupment or reduction of liability whatsoever of the Contractor, arising out of a breach by the Assignor of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of the Contractor or its successors from the Assignor, and all such obligations of the Assignor shall be and remain enforceable against and only against the Assignor and shall not be enforceable against the Assignee.
9.    The Assignor hereby agrees that it will not enter into or consent to or permit any cancellation, termination, amendment, supplement or modification of or waiver with respect to the Contract insofar as it relates to the Nuclear Fuel except for cancellations, terminations, amendments, 

supplements, modifications or waivers which do not materially adversely affect the Assignee or the Collateral Agent, nor will the Assignor sell, assign, grant any security interest in or otherwise transfer its rights or other interests in the Property or any part thereof, except as permitted by the Lease Agreement.
10.    The Assignor hereby represents and warrants that the Contract is in full force and effect and represents that it is the only agreement between the Assignor and the Contractor with respect to the Nuclear Fuel.
11.    (a)                                                                                       , in its capacity as Assignee, is accepting this Assignment solely as trustee under the Trust Agreement and not in its individual capacity, and in no case whatsoever shall                                                                    (or any entity acting as successor trustee, co-trustee or separate trustee under the Trust Agreement) be personally liable on or for any loss in respect hereof or any of the statements, representations, warranties, agreements or obligations of the Trustee hereunder, as to all of which the Assignor agrees to look solely to the Trust created by the Trust Agreement, except for any loss caused by the Assignee’s willful misconduct or gross negligence (provided that this exception shall not be deemed to apply to the extent that Assignee has followed instructions given it, or which it is authorized to accept, pursuant to the Trust Agreement).
(b)    The Assignor agrees that if a successor trustee is appointed in accordance with the terms of the Trust Agreement, such successor trustee shall, without further act, succeed to all the rights, duties, immunities and obligations of the Assignee hereunder, and the predecessor trustee shall be released from all further duties and obligations hereunder, all without in any way altering the terms of this Assignment or the Assignor’s rights or obligations hereunder.
12.    The Assignor hereby agrees to send the Contractor a copy of this Assignment.
13.    This Assignment shall be governed by and construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF, the Assignor has caused this Assignment to be duly executed and delivered as of the __________________ day of  _______________, 1988.
	
	
	By

	Title

The foregoing Assignment is hereby accepted:
	
	
	                                                           , in its individual capacity but solely as trustee under the Trust Agreement dated as of December _____, 1988, among it and the Trustor and the Beneficiary named therein.

	By

	Title

EXHIBIT 1 
to 
Assignment

(a)    The Contract, dated as of                                                                     , as amended, between                                                                                                                      , as buyer and                                                                                                                                  , as seller (the “Contractor”) (said Contract, as the same may from time to time be amended, modified or supplemented, being herein called the “Contract”), insofar as, and only to the extent that, the Contract relates to _______________________ paid for by the Assignee or now or hereafter owned by the Assignee (the “Nuclear Fuel”); but not insofar as the Contract provides for the provision of other nuclear materials and services to the Assignor; and
(b)    The Property shall include, without limitation, (i) any and all amendments and supplements to the Contract from time to time executed and delivered to the extent that any such amendment or supplement relates to the Nuclear Fuel, (ii) the Nuclear Fuel, including the right to receive title thereto, (iii) all rights, claims and proceeds, now or hereafter existing, under any insurance, indemnities, warranties and guaranties provided for in or arising out of the Contract, to the extent that such rights or claims relate to the Nuclear Fuel, (iv) any claim for damages arising out of or for breach or default by the Contractor under or in connection with the Contract insofar as it relates to the Nuclear Fuel, (v) any other amount, whether resulting from refunds or otherwise, from time to time paid or payable by the Contractor under or in connection with the Contract insofar as it relates to the Nuclear Fuel and (vi) the right of the Assignor to terminate the Contract or to perform or to exercise or enforce any and all covenants, remedies, powers and privileges thereunder, insofar as it or they relate to the Nuclear Fuel.
    
    

EXHIBIT 2
to
Assignment

CONSENT AND AGREEMENT
The undersigned,                                                                                                     (the “Contractor”), has entered into a Subcontract dated as of October 27, 1982, as amended, with                                                                                           (the “Assignor”) (said Contract, as the same may from time to time be further amended, modified or supplemented, being herein called the “Contract”).
The Contractor hereby acknowledges notice that (i) in accordance with the terms of a Fuel Lease dated as of December _____, 1988, between the Assignor and ___________________________________________, not in its individual capacity but solely as Trustee (in such capacity called the “Assignee”) under a Trust Agreement dated as of December _____, 1988 among it and the Trustor and the Beneficiary named therein, the Assignor has assigned to the Assignee a part of the Assignor’s rights under the Contract pursuant to an Assignment, in the form of Annex A hereto (such Assignment, as the same may from time to time be amended, modified or supplemented, being herein collectively called the “Assignment”), and (ii) pursuant to a Security and Collateral Agency Agreement dated as of December _________, 1988  (said Security and Collateral Agency Agreement, as the same may from time to time be amended, modified or supplemented, being herein called the “Security Agreement”) made by the Assignee in favor of __________________________________________ (the “Collateral Agent”), for the ratable benefit of the secured parties (the “Secured Parties”) named in the Security Agreement, the Assignee has assigned and granted a security interest in all rights under the Contract from time to time assigned to it by Assignor, as collateral security for all obligations and liabilities of the Assignee to the Secured Parties.  The Contractor also acknowledges receipt of a copy of the Lease Agreement and of the Security Agreement.
The Contractor hereby consents to (i) the assignment by the Assignor to the Assignee of the Assignor’s right, title and interest in, to and under the Contract and the other Property described in the Assignment, pursuant to the Assignment and (ii) the assignment and security interest in favor of the Collateral Agent as described above.  The Contractor further consents to all of the terms and provisions of the Security Agreement.
The Contractor agrees that, if requested by either the Assignor or the Assignee, it will acknowledge in writing the Assignment delivered by the Assignor to the Assignee; provided, that neither the lack of notice to nor acknowledgment by the Contractor of the Assignment shall limit or otherwise affect the validity or effectiveness of this consent to such Assignment.
The Contractor hereby confirms to the Assignee and the Collateral Agent that:
(a)    all representations, warranties and agreements of the Contractor under the Contract which relate to the Nuclear Fuel described in the Assignment shall inure to the benefit of, and shall be enforceable by, the Assignee or the Collateral Agent to the same extent as if originally named in the Contract as the purchaser of such Nuclear Fuel,
(b)    the Contractor understands that, pursuant to the Lease Agreement, the Assignee has agreed to lease the Nuclear Fuel described in the Assignment to the Assignor, and consents to the assignment to the Assignor, for so long as the Lease Agreement shall be in effect or until otherwise notified by the 

Assignee, of the Assignee’s rights under any warranty or agreement made by the Contractor in the Contract and with respect to such Nuclear Fuel, and
(c)    The Contractor is in the business of selling nuclear fuel or related services of the kind described in the Assignment, and the proposed sale of such nuclear fuel under the Contract will be in the ordinary course of business of the Contractor.
(d)    Notwithstanding any provision to the contrary contained in the Contract, the Contractor agrees that title to any Nuclear Fuel covered by the Assignment shall pass directly to the Assignee under the Contract and shall not pass to the Assignor; provided that the foregoing shall not apply to any Nuclear Fuel for which title has already passed to Assignor prior to the execution and delivery of the Assignment.
It is understood that neither the Assignment, the Security Agreement nor this Consent and Agreement shall in any way add to the obligations of the Contractor or the Assignor under the Contract.
This Consent and Agreement shall be governed by and construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned has caused this Consent and Agreement to be duly executed and delivered by its duly authorized officer as of _____ day of _____________, 1988.
	
	
	By:

	Title:Exhibit

    
Exhibit 4(d)1
LOUISIANA POWER & LIGHT COMPANY

TO

BANK OF MONTREAL TRUST COMPANY 
(successor to The Chase Manhattan Bank (National Association))

AND

Z. GEORGE KLODNICKI
(successor to J. A. Payne)
As Trustees under Louisiana Power & Light
Company’s Mortgage and Deed of Trust,
dated as of April 1, 1944
__________________
Forty-second Supplemental Indenture
Providing among other things for
First Mortgage Bonds, Environmental Series A
(Forty-fifth Series)

Dated as of June 1, 1991

        

FORTY-SECOND SUPPLEMENTAL INDENTURE
INDENTURE, dated as of June 1, 1991, between LOUISIANA POWER & LIGHT COMPANY, a corporation of the State of Louisiana (successor by merger to LOUISIANA POWER & LIGHT COMPANY, a corporation of the State of Florida), whose post office address is 317 Baronne Street, New Orleans, Louisiana 70112 (hereinafter sometimes called the “Company”), and BANK OF MONTREAL TRUST COMPANY, a New York corporation (successor to THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)), whose principal office is located at 77 Water Street, New York, New York 10005 (hereinafter sometimes called the “Corporate Trustee”), and Z. GEORGE KLODNICKI (successor to J. A. PAYNE), whose post office address is 87 Prospect Avenue, Westwood, New Jersey 07675 (said Z. GEORGE KLODNICKI being hereinafter sometimes called the “Co-Trustee” and the Corporate Trustee and the Co-Trustee being hereinafter together sometimes called the “Trustees”), as Trustees under the Mortgage and Deed of Trust, dated as of April 1, 1944 (hereinafter called the “Mortgage”), which Mortgage was executed and delivered by Louisiana Power & Light Company, a corporation of the State of Florida (hereinafter sometimes called the “Florida Company”), to secure the payment of bonds issued or to be issued under and in accordance with the provisions of the Mortgage, reference to which Mortgage is hereby made, this Indenture (hereinafter called the “Forty-second Supplemental Indenture”) being supplemental thereto;
WHEREAS, the Mortgage was recorded in various Parishes in the State of Louisiana, which Parishes are the same Parishes in which this Forty-second Supplemental Indenture is to be recorded; and
WHEREAS, by the Mortgage, the Florida Company covenanted that it would execute and deliver such supplemental indenture or indentures and such further instruments and do such further acts as might be necessary or proper to carry out more effectually the purposes of the Mortgage and to make subject to the lien of the Mortgage any property thereafter acquired and intended to be subject to the lien thereof; and
WHEREAS, the Florida Company executed and delivered the following supplemental indentures:        24

	
		
	Designation
	Dated as of

	First Supplemental Indenture
	March 1, 1948

	Second Supplemental Indenture
	November 1, 1950

	Third Supplemental Indenture
	September 1, 1953

	Fourth Supplemental Indenture
	October 1, 1954

	Fifth Supplemental Indenture
	January 1, 1957

	Sixth Supplemental Indenture
	April 1, 1960

	Seventh Supplemental Indenture
	June 1, 1964

	Eighth Supplemental Indenture
	March 1, 1966

	Ninth Supplemental Indenture
	February 1, 1967

	Tenth Supplemental Indenture
	September 1, 1967

	Eleventh Supplemental Indenture
	March 1, 1968

	Twelfth Supplemental Indenture
	June 1, 1969

	Thirteenth Supplemental Indenture
	December 1, 1969

	Fourteenth Supplemental Indenture
	November 1, 1970

	Fifteenth Supplemental Indenture
	April 1, 1971

	Sixteenth Supplemental Indenture
	January 1, 1972

	Seventeenth Supplemental Indenture
	November 1, 1972

	Eighteenth Supplemental Indenture
	June 1, 1973

	Nineteenth Supplemental Indenture
	March 1, 1974

	Twentieth Supplemental Indenture
	November 1, 1974

which supplemental indentures were recorded in various Parishes in the State of Louisiana; and
WHEREAS, the Florida Company was merged into the Company on February 28, 1975, and the Company thereupon executed and delivered a Twenty-first Supplemental Indenture, dated as of March 1, 1975, pursuant to which the Company, among other things, assumed and agreed duly and punctually to pay the principal of and interest on the bonds at the time issued and outstanding under the Mortgage, as then supplemented, in accordance with the provisions of said bonds and of any appurtenant coupons and of the Mortgage as so supplemented, and duly and punctually to observe, perform and fulfill all of the covenants and conditions of the Mortgage, as so supplemented, to be kept or performed by the Florida Company, and said Twenty-first Supplemental Indenture was recorded in various Parishes in the State of Louisiana; and
WHEREAS, the Company has succeeded to and has been substituted for the Florida Company under the Mortgage with the same effect as if it had been named as mortgagor corporation therein; and
WHEREAS, the Company executed and delivered the following supplemental indentures:

	
		
	Designation
	Dated as of

	Twenty-second Supplemental Indenture
	September 1, 1975

	Twenty-third Supplemental Indenture
	December 1, 1976

	Twenty-fourth Supplemental Indenture
	January 1, 1978

	Twenty-fifth Supplemental Indenture
	July 1, 1978

	Twenty-sixth Supplemental Indenture
	May 1, 1979

	Twenty-seventh Supplemental Indenture
	November 1, 1979

	Twenty-eighth Supplemental Indenture
	December 1, 1980

	Twenty-ninth Supplemental Indenture
	April 1, 1981

	Thirtieth Supplemental Indenture
	December 1, 1981

	Thirty-first Supplemental Indenture
	March 1, 1983

	Thirty-second Supplemental Indenture
	September 1, 1983

	Thirty-third Supplemental Indenture
	August 1, 1984

	Thirty-fourth Supplemental Indenture
	November 1, 1984

	Thirty-fifth Supplemental Indenture
	December 1, 1984

	Thirty-sixth Supplemental Indenture
	December 1, 1985

	Thirty-seventh Supplemental Indenture
	April 1, 1986

	Thirty-eighth Supplemental Indenture
	November 1, 1986

	Thirty-ninth Supplemental Indenture
	May 1, 1988

	Fortieth Supplemental Indenture
	December 1, 1988

	Forty-first Supplemental Indenture
	April 1, 1990

which supplemental indentures were recorded in various Parishes in the State of Louisiana; and
WHEREAS, in addition to the property described in the Mortgage, as supplemented, the Company has acquired certain other property, rights and interests in property; and
WHEREAS, the Florida Company or the Company has heretofore issued, in accordance with the provisions of the Mortgage, as supplemented, the following series of First Mortgage Bonds:

	
			
	Series
	Principal
Amount
Issued
	Principal
Amount
Outstanding

	3% Series due 1974
	$17,000,000
	None

	31⁄8% Series due 1978
	$10,000,000
	None

	3% Series due 1980
	$10,000,000
	None

	4% Series due 1983
	$12,000,000
	None

	31⁄8% Series due 1984
	$18,000,000
	None

	43⁄4% Series due 1987
	$20,000,000
	None

	5% Series due 1990
	$20,000,000
	None

	45⁄8% Series due 1994
	$25,000,000
	$25,000,000

	53⁄4% Series due 1996
	$35,000,000
	$35,000,000

	55⁄8% Series due 1997
	$16,000,000
	$16,000,000

	61⁄2% Series due September 1, 1997
	$18,000,000
	$18,000,000

	71⁄8% Series due 1998
	$35,000,000
	$35,000,000

	93⁄8% Series due 1999
	$25,000,000
	$25,000,000

	93⁄8% Series due 2000
	$20,000,000
	$20,000,000

	77⁄8% Series due 2001
	$25,000,000
	$25,000,000

	71⁄2% Series due 2002
	$25,000,000
	$25,000,000

	71⁄2% Series due November 1, 2002
	$25,000,000
	$25,000,000

	8% Series due 2003
	$45,000,000
	$36,500,000

	83⁄4% Series due 2004
	$45,000,000
	$45,000,000

	91⁄2% Series due November 1, 1981
	$50,000,000
	None

	93⁄8% Series due September 1, 1983
	$50,000,000
	None

	83⁄4% Series due December 1, 2006
	$40,000,000
	$40,000,000

	9% Series due January 1, 1986
	$75,000,000
	None

	10% Series due July 1, 2008
	$60,000,000
	$60,000,000

	107⁄8% Series due May 1, 1989
	$45,000,000
	None

	131⁄2% Series due November 1, 2009
	$55,000,000
	None

	153⁄4% Series due December 1, 1988
	$50,000,000
	None

	16% Series due April 1, 1991
	$75,000,000
	None

	161⁄4% Series due December 1, 1991
	$100,000,000
	None

	12% Series due March 1, 1993
	$100,000,000
	None

	131⁄4% Series due March 1, 2013
	$100,000,000
	None

	13% Series due September 1, 2013
	$50,000,000
	None

	16% Series due August 1, 1994
	$100,000,000
	None

	143⁄4% Series due November 1, 2014
	$55,000,000
	None

	151⁄4% Series due December 1, 2014
	$35,000,000
	None

	14% Series due December 1, 1992
	$60,000,000
	None

	141⁄4% Series due December 1, 1995
	$15,000,000
	None

	101⁄2% Series due April 1, 1993
	$200,000,000
	$200,000,000

	103⁄8% Series due November 1, 2016
	$280,000,000
	$275,000,000

	Series 1988A due September 30, 1988
	$13,334,000
	None

	Series 1988B due September 30, 1988
	$10,000,000
	None

	Series 1988C due September 30, 1988
	$6,667,000
	None

	10.36% Series due December 1, 1995
	$75,000,000
	$75,000,000

	101⁄8% Series due April 1, 2020
	$100,000,000
	$95,000,000

which bonds are also hereinafter sometimes called bonds of the First through Forty-fourth Series, respectively; and
WHEREAS, Section 8 of the Mortgage provides that the form of each series of bonds (other than the First Series) issued thereunder and of the coupons to be attached to coupon bonds of such series shall be established by Resolution of the Board of Directors of the Company and that the form of such series, as established by said Board of Directors, shall specify the descriptive title of the bonds and various other terms thereof, and may also contain such provisions not inconsistent with the provisions of the Mortgage as the Board of Directors may, in its discretion, cause to be inserted therein expressing or referring to the terms and conditions upon which such bonds are to be issued and/or secured under the Mortgage; and
WHEREAS, Section 120 of the Mortgage provides, among other things, that any power, privilege or right expressly or impliedly reserved to or in any way conferred upon the Company by any provision of the Mortgage, whether such power, privilege or right is in any way restricted or is unrestricted, may be in whole or in part waived or surrendered or subjected to any restriction if at the time unrestricted or to additional restrictions if already restricted, and the Company may enter into any further covenants, limitations or restrictions for the benefit of any one or more series of bonds issued thereunder, or the Company may cure any ambiguity contained therein, or in any supplemental indenture, or may establish the terms and provisions of any series of bonds (other than the First Series) by an instrument in writing executed and acknowledged by the Company in such manner as would be necessary to entitle a conveyance of real estate to record in all of the states in which any property at the time subject to the lien of the Mortgage shall be situated; and
WHEREAS, the Company now desires to create a new series of bonds and to add to its covenants and agreements contained in the Mortgage, as heretofore supplemented, certain other covenants and agreements to be observed by it and to alter and amend in certain respects the covenants and provisions contained in the Mortgage, as heretofore supplemented; and
WHEREAS, the execution and delivery by the Company of this Forty-second Supplemental Indenture, and the terms of the bonds of the Forty-fifth Series, hereinafter referred to, have been duly authorized by the Board of Directors of the Company by appropriate Resolutions of said Board of Directors;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That the Company, in consideration of the premises and of One Dollar to it duly paid by the Trustees at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, and in further evidence of assurance of the estate, title and rights of the Trustees and in order further to secure the payment both of the principal of and interest and premium, if any, on the bonds from time to time issued under the Mortgage, according to their tenor and effect and the performance of all the provisions of the Mortgage (including any instruments supplemental thereto and any modification made as in the Mortgage provided) and of said bonds, hereby grants, bargains, sells, releases, conveys, assigns, transfers, mortgages, hypothecates, affects, pledges, sets over and confirms (subject, however, to Excepted Encumbrances as defined in Section 6 of the Mortgage) unto Z. George Klodnicki and (to the extent of its legal capacity to hold the same for the purposes hereof) to Bank of Montreal Trust Company, as Trustees under the Mortgage, and to their successor or successors in said trust, and to said Trustees and their successors and assigns forever, all of the property now owned by the Company and specifically described in the Mortgage, as supplemented, and all the following described properties of the Company, whether now owned or hereafter acquired, namely:

PARAGRAPH ONE
The Electric Generating Plants, Plant Sites and Stations of the Company, including all electric works, power houses, buildings, pipe lines and structures owned by the Company and all land of the Company on which the same are situated and all of the Company’s lands, together with the buildings and improvements thereon, and all rights, ways, servitudes, prescriptions, and easements, rights-of-way, permits, privileges, licenses, poles, wires, machinery, implements, equipment and appurtenances, forming a part of said plants, sites or stations, or any of them, or used or enjoyed, or capable of being used or enjoyed in conjunction with any of said power plants, sites, stations, lands and property.
PARAGRAPH TWO
The Electric Substations, Switching Stations, Microwave installations and UHF-VHF installations of the Company, and the Sites therefor, including all buildings, structures, towers, poles, all equipment, appliances and devices for transforming, converting, switching, transmitting and distributing electric energy, and for communications, and the lands of the Company on which the same are situated, and all of the Company’s lands, rights, ways, servitudes, prescriptions, easements, rights-of-way, machinery, equipment, appliances, devices, licenses and appurtenances forming a part of said substations, switching stations, microwave installations or UHF-VHF installations, or any of them, or used or enjoyed or capable of being used or enjoyed in conjunction with any of them, including all the Company’s right, title and interest in and to the following property situated in the State of Louisiana:
IBERVILLE PARISH
(1)Additions, improvements and replacements to the Evergreen 230/34.5 KV Substation, located approximately 3.5 miles southeasterly of Plaquemine in Iberville Parish, situated on/and that certain tract or parcel of land particularly described in Paragraph Two, Sub-Paragraph (5) of the Thirteenth Supplemental Indenture.

JEFFERSON PARISH
(2)The Estelle 230/13.8 KV Substation, located on a site fronting on Louisiana State Highway No. 45 approximately 5 miles southerly of the intersection of said Louisiana State Highway No. 45 with Louisiana State Highway No. 90, at or near Marrero in Jefferson Parish, situated on/and that certain tract or parcel of land particularly described in Paragraph Three, Sub-Paragraph (2) of the Sixteenth Supplemental Indenture.

(3)Additions, improvements and replacements to the Paris 230X115/13.8 KV Substation, located in an area bounded by Paris Avenue, Carrollton Avenue, Cedar Street and the west line of Metairieville Subdivision in Jefferson Parish, situated on/and that certain tract or parcel of land particularly described in Paragraph Three, Sub-Paragraph (2) of the Eighth Supplemental Indenture.

(4)The Southport 230 KV Switching Station, located on a site fronting on the River Road at Dakin Street one block from the west Orleans Parish boundary line in Jefferson Parish, situated on/and those certain tracts or parcels of land particularly described in Paragraph Three, Sub-Paragraphs (4), (5), (6), (7), (8), (9), (10), (11), (12), and (13) of the Fortieth Supplemental Indenture and in Paragraph Three, Sub-Paragraphs (2) and (3) of the Forty-first Supplemental Indenture.

LAFOURCHE PARISH
(5)Additions, improvements and replacements to the Raceland 230/115/34.5X13.8 KV Substation, located approximately one mile northeasterly of Raceland in Lafourche Parish, situated on/and those certain tracts or parcels of land particularly described in Paragraph Two, Sub-Paragraph (3) of the Eighteenth Supplemental Indenture, in Paragraph Two, Sub-Paragraph (14) of the Fourteenth Supplemental Indenture, and in Paragraph Three, Sub-Paragraph (19) of the Second Supplemental Indenture.

(6)Additions, improvements and replacements to the Thibodaux Substation, which is now the Thibodaux 230/34.5/13.8 KV Substation, located just northerly of Thibodaux in Lafourche Parish, situated on/and that certain tract or parcel of land particularly described in Paragraph Two, Sub-Paragraph (28) of the Fifth Supplemental Indenture.

(7)Additions, improvements and replacements to the Valentine Substation, which is now the Valentine 230X115/34.5 KV Substation, located approximately 4 miles southeasterly of Lockport in Lafourche Parish, situated on/and that certain tract or parcel of land particularly described in Paragraph Two, Sub-Paragraph (29) of the Fifth Supplemental Indenture.

ST. JAMES PARISH
(8)Additions, improvements and replacements to the Welcome 230/34.5/13.8 KV Substation, located approximately 8 miles northwesterly of St. James in St. James Parish, situated on/and those certain tracts or parcels of land particularly described in Paragraph Two, Sub-Paragraph (23) of the Thirteenth Supplemental Indenture, and on/and that certain tract or parcel of land particularly described as follows:

A certain tract or portion of land situated in the Parish of St. James, State of Louisiana, on the right descending side of the Mississippi River, located in Sections 46 and 47, Township 11 South, Range 15 East and which is more fully and specifically described in accordance with a certain plan of survey prepared by Charles M. Camp, Registered Land Surveyor in the State of Louisiana, Reg. No. 339, and a member of T. Baker Smith & Son, Inc., dated April 27, 1990 and entitled “MAP SHOWING 0.976 ACRE ADDITION TO LOUISIANA POWER & LIGHT ‘WELCOME’ SUBSTATION SITE LOCATED WITHIN SECTION 46 & 47, T11S-R15E ST. JAMES PARISH, LOUISIANA,” as follows:
Commencing at a 3 inch concrete monument at the intersection of the westerly right of way line of Louisiana State Highway 18 with the line common to Sections 45 and 46, Township 11 South, Range 15 East, St. James Parish, Louisiana, and from said point proceed South 52 degrees 05 minutes 41 seconds West along the common section line a distance of 3,442.61 feet to a point; thence measure South 37 degrees 54 minutes 19 seconds East a distance of 347.00 feet to the POINT OF BEGINNING;
Thence from the said POINT OF BEGINNING measure South 37 degrees 54 minutes 19 seconds East a distance of 425.00 feet to a point; thence measure South 52 degrees 05 minutes 41 seconds West a distance of 100.00 feet to a point; thence measure North 37 degrees 54 minutes 19 seconds West a distance of 425.00 feet to a point; thence measure North 52 degrees 05 minutes 41 seconds East a distance of 100.00 feet to the said POINT OF BEGINNING; containing 0.976 acre.
Being the same property acquired by the Company from Freeport-McMoRan Resource Partners, Limited Partnership, a limited partnership organized under the laws of the State of Delaware, 

by deed executed by the vendor on December 31, 1990 and by the Company on January 9, 1991, recorded in Conveyance Book 309, Folio 273 of the records of St. James Parish.
TANGIPAHOA PARISH
(9)The Chickenfarm 115/13.8 KV Substation, located on a site fronting on Louisiana State Highway No. 16 approximately 9 miles east of the City of Amite in Tangipahoa Parish, situated on/and that certain tract or parcel of land particularly described in Paragraph Three, Sub-Paragraph (4) of the Forty-first Supplemental Indenture.

PARAGRAPH THREE
All and Singular the Miscellaneous Lands and Real Estate or Rights and Interests Therein of the Company now owned, or, subject to the provisions of Section 87 of the Mortgage, hereafter acquired during the existence of this trust, including the following property situated in the State of Louisiana, described as:
EAST CARROLL PARISH
(10)A certain tract or parcel of land situated in the Parish of East Carroll, specifically described as follows:

The easterly ninety (90’) feet of Lots 12 and 13 of Block 9 of the Town of Lake Providence (formerly the Town of Providence), as per plat thereof duly filed for record in Notarial Book V, page 738 of the records of East Carroll Parish, Louisiana; according to a plat of said property prepared by Henry M. Messinger, Registered Land Surveyor, dated November, 1963, a copy of which is attached to a servitude of driveway dated December 29, 1970 and recorded in Conveyance Book 81, page 838, said property is shown thereon as “Tract A”, and forms the corner of Scarbrough Street and Morgan Street in the Town of Lake Providence, and fronts fifty-nine and 75/100 (59.75’) feet along the west side of Scarbrough Street by a depth and distance of ninety (90’) feet, one of which is the north side of Morgan Street, to a rear measurement of sixty and 4/10 (60.4’) feet.
Being the same property acquired by the Company from Resolution Trust Corporation as Receiver for Republic Bank for Savings, F.A. by deed executed by the vendor on December 28, 1990 and by the Company on December 12, 1990, recorded in Conveyance Book 130, Folio 222 of the records of East Carroll Parish.
JEFFERSON PARISH
(11)A certain tract or parcel of land situated in the Parish of Jefferson, specifically described as follows:

A certain piece or parcel of land, together with all the buildings and improvements thereon, and all the rights, ways, privileges, servitudes, appurtenances, advantages and prescriptions, both liberative and acquisitive, thereunto belonging or in anywise appertaining, located in the Parish of Jefferson, State of Louisiana, consisting of portions of former Lot or Block 12 of Section “D”, Elmwood Subdivision, as shown on a plan of subdivision of said Section “D” of Elmwood Subdivision by F. B. Grevemberg, C.E., dated April 30, 1931, copies of which are filed in the Office of the Clerk of Court for the Parish of Jefferson in Book of Plans, Volume 14, page 16, and attached to an Act of Sale passed before Henry G. Huckabee, Notary Public, on December 27, 1935; which said piece or parcel of land is a part of Plot 12-B shown on a plan of resubdivision by Alvin E. Hotard, C.E., dated 

November 22, 1964, a copy of which is attached to the Ordinance hereinafter referred to, which said plan of resubdivision was approved by the Jefferson Parish Council on January 28, 1965, per Ordinance No. 6976, a certified true copy of which said Ordinance was filed in the Conveyance Records of Jefferson Parish, Louisiana, on February 12, 1965, as Entry No. 318073, and recorded in Conveyance Book 608, Folio 266 of said records; and which said piece or parcel of land is designated as Lot 12-B on a plan of resubdivision by J. J. Krebs, C.E., of J. J. Krebs & Sons, Inc., dated February 12, 1976, a copy of which is attached to the Ordinance hereinafter referred to, which said plan or resubdivision was approved by the Jefferson Parish Council on May 13, 1976, per Ordinance No. 12390, a certified true copy of which said Ordinance was filed in the Conveyance Records of Jefferson Parish, Louisiana, on June 9, 1976 as Entry No. 723141, and recorded in Conveyance Book 864, Folio 295 of said records; and in accordance with plan of survey by J. F. Ruello, Registered Land Surveyor, Reg. No. 4508, dated December 20, 1989, is more fully and particularly located and described as follows, to-wit:
Commencing at the intersection of the west right of way line for Behrman Highway and the south boundary of Lot 14-B in Section “D” of Elmwood Subdivision as shown on the aforesaid Krebs plan of resubdivision located in Jefferson Parish, Louisiana; said point of intersection being 687.12 feet from the intersection of said Behrman Highway and the south line of Peters Street; thence along the south boundary of said Lot 14-B on a bearing of North 86 degrees 19 minutes 35 seconds West a distance of 416.00 feet to the POINT OF BEGINNING; thence from the said point of beginning continue along the south boundary of said Lot 14-B on a bearing of North 86 degrees 19 minutes 35 seconds West a distance of 131.25 feet to a point on the east right of way line of Alto Street; thence measure along the said right of way line of Alto Street on a bearing of South 03 degrees 40 minutes 25 seconds West a distance of 290.52 feet to a point on the north right of way line of Industry Street; thence measure along the said north right of way line of Industry Street on a bearing of South 48 degrees 59 minutes 35 seconds East a distance of 165.07 feet to a point; thence measure on a bearing of North 03 degrees 40 minutes 25 seconds East a distance of 390.61 feet to the POINT OF BEGINNING.
Being the same property acquired by the Company from Manson Realty Company, Inc. by deed dated March 20, 1990, recorded in Conveyance Book 2306, Folio 327 of the records of Jefferson Parish.
LAFOURCHE PARISH
(12)A certain tract or parcel of land situated in the Parish of Lafourche, specifically described as follows:

A certain tract or portion of ground, together with all the buildings and improvements thereon, and all the rights, ways, privileges, prescriptions, servitudes, appurtenances and advantages thereunto belonging or in anywise appertaining, located in the Parish of Lafourche, State of Louisiana, in Section 97, Township 17 South, Range 20 East, in Ludevine Plantation, on the left descending bank of Bayou Lafourche, which said tract or portion of ground contains 0.951 acres and is more fully and specifically described in accordance with plan of survey prepared by Charles M. Camp, Registered Land Surveyor, La. Reg. No. 339, dated January 30, 1990 and attached to an Act of Cash Sale of Real Property dated July 23, 1990, by Ethel Walther, widow of Oscar T. Mire, et al., to Rebus Realty Co., Inc., registered in Conveyance Book 1087, Folio 638 of the records of Lafourche Parish, as follows, to-wit;

Commencing at the lower front corner or southeasterly corner of said Section 97, Township 17 South, Range 20 East, which point is designated by the letter A on the plan of survey by J. C. Lovell, Surveyor, dated February 8, 1956, which is attached to the instrument of sale from Peltier Realty Company, Inc., et al. to Louisiana Power & Light Company, dated May 17, 1956, and recorded in the Conveyance records of Lafourche Parish under Entry No. 139879, thence running in a northwesterly direction along the southerly section line of said Section 97, which southerly section line is also a Government Traverse line, on a bearing of North 77 degrees 37 minutes West, for a distance of 1172.82 feet to a point designated by the letter B on the aforesaid plan of survey; thence continuing along said southerly section line or Government Traverse line in a northwesterly direction, on a bearing of North 70 degrees 30 minutes West, for a distance of 107.2 feet to a point designated by the letter C on the aforesaid plan of survey (said point C being also reached by commencing at the intersection of the westerly property line of Ludevine Plantation with said southerly section line or Government Traverse line, said point of intersection being designated by the letter X on the aforesaid plan of survey and running thence, in a southeasterly direction, along said section line or Government Traverse line, on a bearing of South 62 degrees 45 minutes East for a distance of 325 feet to a point designated by the letter Y on the aforesaid plan of survey, thence continuing in a southeasterly direction along said southerly section line or Government Traverse line, on a bearing of South 70 degrees 30 minutes East, for a distance of 338 feet to said point C as shown on the aforesaid plan of survey); thence running in a northeasterly direction, on a bearing of North 13 degrees 00 minutes East, for a distance of 111.37 feet, across and to the northerly margin of the Right of Way of Louisiana State Highway No. 308 (formerly No. 77), which point is designated as the POINT OF BEGINNING; thence from said POINT OF BEGINNING measure North 71 degrees 50 minutes West for a distance of 100.00 feet to a point; thence measure North 13 degrees 00 minutes East for a distance of 416.00 feet to a point; thence measure South 71 degrees 50 minutes East for a distance of 100.00 feet to a point, also being common with the northwest corner of the existing Louisiana Power & Light Company Substation [site] and being designated by the letter E on the J. C. Lovell plan of survey mentioned above; thence on and along the west property line of the existing Louisiana Power & Light Company Substation [site] measure South 13 degrees 00 minutes West for a distance of 416.00 feet to the POINT OF BEGINNING.
Being the same property acquired by Rebus Realty Co., Inc. (subject to a reservation of all oil, gas or other minerals in or under the land but with the use of the land protected against mineral development) from Ethel Walther, widow of Oscar T. Mire, et al., by Act of Cash Sale of Real Property, acknowledged with respect to the vendors of said property before Eugene G. Taggart, Notary Public, on July 23, 1990, and acknowledged by the purchaser of said property before Bartholomew P. Sullivan, Jr., on July 23, 1990, registered in Conveyance Book 1087, Folio 638 of the records of Lafourche Parish, and acquired by the Company from Rebus Realty Co., Inc. by Counterletter acknowledged before Bartholomew P. Sullivan, Jr., Notary Public, on July 23, 1990, registered in Conveyance Book 1105, Folio 615 of the records of Lafourche Parish.
WASHINGTON PARISH
(13)A certain tract or parcel of land situated in the Parish of Washington, specifically described as follows:

A CERTAIN LOT OR PARCEL OF GROUND located in the City of Bogalusa, Parish of Washington, State of Louisiana, Section 15, Township 3 South, Range 13 East, St. Helena Meridian, being bounded by Brazos Street on the North, Ontario Avenue on the South, James Street on the East and Rio Grand Street (Louisiana Highway 10) on the West, and fronting on the said Rio Grand Street 

a distance of 225.00 feet and on the said Brazos Street a distance of 579.64 feet, which said lot or parcel of ground is more specifically and fully described in accordance with survey of BFM Corporation prepared by R. P. Fontouberta, Jr., Registered Professional Land Surveyor, Louisiana Reg. No. 4329 and dated December 14, 1990, revised December 19, 1990 and February 1, 1991, as follows, to-wit:
Commencing at the intersection of the easterly right of way line of Rio Grand Street and the southerly right of way line of Brazos Street, which said point of intersection is marked by a one-half inch iron pipe; thence from said POINT OF BEGINNING: measure South 89 degrees, 55 minutes, 00 seconds East, along the southerly right of way line of Brazos Street, for a distance of 579.64 feet to a point marked by a one-half inch iron pipe; thence measure North 89 degrees, 55 minutes 00 seconds West, for a distance of 579.64 feet to a point on the easterly right of way line of the said Rio Grand Street marked by a one-half inch iron pipe; thence measure North 00 degrees, 05 minutes, 00 seconds East, along the easterly right of way line of the said Rio Grand Street, for a distance of 225 feet to the POINT OF BEGINNING; containing 2.994 acres of land.
Being the same property acquired by the Company from John B. Bunch, Jr. by deed executed by the vendor on February 8, 1991, and by the Company on February 15, 1991, recorded in Conveyance Book 411, Folio 167 of the records of Washington Parish.
PARAGRAPH FOUR
The Electric Transmission Lines of the Company, including the structures, towers, poles, wires, cables, switch racks, conductors, transformers, pole type substations, insulators and all appliances, devices and equipment used or useful in connection with said transmission lines and systems, and all other property, real, personal or mixed, forming a part thereof or appertaining thereto, together with all rights-of-way, easements, prescriptions, servitudes, permits, privileges, licenses, consents, immunities and rights for or relating to the construction, maintenance or operation thereof, through, over, under or upon any public streets or highways or other lands, public or private, including all of the Company’s right, title and interest in and to the following property situated in the State of Louisiana, to wit:
(1)Additions, improvements and replacements to the Mississippi State Line-Amite 115 KV Transmission Line in Tangipahoa Parish (formerly designated as the Amite-Mississippi State Line (Osyka) 115 KV Transmission Line), described in Paragraph Four, Sub-Paragraph (2) of the Eighth Supplemental Indenture, said additions, improvements and replacements including replacement of two wood structures with steel poles in that portion of said transmission line located approximately 5.5 miles north of Amite in Tangipahoa Parish.

(2)Additions, improvements and replacements to the Little Gypsy-Destrehan-Orleans (ICRR) 230 KV Transmission Line in St. Charles and Jefferson Parishes (consisting of the transmission lines formerly designated as the Little Gypsy-Destrehan 230 KV Transmission Line, described in Paragraph Four, Sub-Paragraph (9) of the Tenth Supplemental Indenture and in Paragraph Four, Sub-Paragraph (1) of the Twenty-fourth Supplemental Indenture; as the Destrehan-Kenner 230 KV Transmission Line, described in Paragraph Four, Sub-Paragraph (5) of the Tenth Supplemental Indenture; and as the Kenner-New Orleans 230 KV Transmission Line, described in Paragraph Four, Sub-Paragraph (9) of the Thirteenth Supplemental Indenture) described in Paragraph Four, Sub-Paragraph (1) of the Thirty-sixth Supplemental Indenture and in Paragraph Four, Sub-Paragraph (6) of the Fortieth Supplemental Indenture, said additions, improvements and replacements including the reconductoring and re-routing of a portion of said transmission line of approximately 500 feet 

from the corner of Addison and Dakin Streets to the Southport Switching Station, located at the corner of River Road and Dakin Street in Jefferson Parish.

(3)Additions, improvements and replacements to the Little Gypsy-Snake Farm-Orleans (Airline) 230 KV Transmission Line in Jefferson and St. Charles Parishes (formerly designated as the Little Gypsy-Snake Farm 230 KV Transmission Line), described in Paragraph Four, Sub-Paragraph (10) of the Tenth Supplemental Indenture and in Paragraph Four, Sub-Paragraph (1) of the Twenty-fifth Supplemental Indenture, said additions, improvements and replacements including re-routing of said line in a westerly direction for a distance of approximately .50 miles and then in a southwesterly direction for approximately 2 miles, forming a loop and then connecting to said transmission line in St. Charles Parish at a point located approximately 2 miles southwest of the Kenner 115/13.8 KV Substation, located at or near Kenner in Jefferson Parish.

(4)The Ninemile-Southport E/B 230 KV Transmission Line in Jefferson Parish. This double circuit, shielded, part steel pole, part steel tower transmission line begins at the Southport 230 KV Switching Station, located at the corner of Dakin Street and the River Road, approximately .50 miles westerly of the Orleans-Jefferson Parish Line, and extends in a generally southerly direction for a distance of approximately .40 miles to a point midstream in the Mississippi River.

(5)The Ninemile-Southport W/B 230 KV Transmission Line in Jefferson Parish. This double circuit, shielded, part steel pole, part steel tower transmission line begins at the Ninemile 230 KV Switching Station, located at Ninemile Point, and extends in a generally northerly direction for a distance of approximately 1 mile to a point midstream in the Mississippi River.

(6)Additions, improvements and replacements to the Winnfield-Hodge 115 KV Transmission Line in Winn and Jackson Parishes, described in Paragraph Five, Sub-Paragraph (13) of the Mortgage and in Paragraph Four, Sub-Paragraph (45) of the Eighth Supplemental Indenture, said additions, improvements and replacements including the rebuilding of said transmission line with double circuit, shielded, steel pole construction.

PARAGRAPH FIVE
The Electric Submarine Cables of the Company, including the wires, cables, switch racks, conductors, conduits, transformers, substations, insulators and all appliances, devices and equipment used or useful in connection with said submarine cables, and all other property, real, personal or mixed, forming a part thereof or appertaining thereto, together with all rights-of-way, easements, prescriptions, servitudes, permits, privileges, licenses, consents, immunities and rights for or relating to the construction, maintenance or operation thereof.
And also all extensions, replacements, branches, taps, developments and improvements of said submarine cables, or any of them, and all other submarine cables owned by the Company wherever situated, whether now owned or hereafter acquired and/or constructed, as well as all of the Company’s rights-of-way, easements, permits, privileges, licenses, consents, immunities and rights for or relating to the construction, maintenance or operation thereof, subject, however, to the provisions of Section 87 of the Mortgage.
PARAGRAPH SIX
The Electric Distribution Lines and Systems of the Company, including the structures, towers, poles, wires, insulators and appurtenances, appliances, conductors, conduits, cables, transformers, meters, regulator stations and regulators, accessories, devices and equipment and all of the Company’s other property, real, 

personal or mixed, forming a part of or used, occupied or enjoyed in connection with or in anywise appertaining to said distribution lines and systems, together with all of the Company’s rights-of-way, easements, permits, prescriptions, privileges, municipal or other franchises, licenses, consents, immunities and rights for or relating to the construction, maintenance or operation thereof, through, over, under, or upon any public streets or highways, public or private lands, including all additions, improvements or replacements to all of the distribution systems located in the municipalities and parishes set forth in the Mortgage and in the First through Forty-first Supplemental Indentures.
And also all branches, extensions, improvements and developments of or appertaining to or connected with said distribution lines, systems or any of them, and all other distribution systems of the Company and parts and portions thereof, wherever situated, whether connected or not connected with any of the foregoing systems and whether now owned or hereafter acquired, as well as all of the Company’s rights-of-way, easements, privileges, prescriptions, permits, municipal or other franchises, consents and rights for or relating to the construction, maintenance or operation thereof or any part or portion thereof, through, over, under or upon any public streets or highways or public or private lands, whether now owned or hereafter acquired, subject, however, to the provisions of Section 87 of the Mortgage.
PARAGRAPH SEVEN
The certain franchises, privileges, permits, grants and consents for the construction, operation and maintenance of electric systems in, on and under streets, alleys, highways, roads, and public grounds, areas and rights-of-way, and/or for the supply and sale of electricity, and all rights incident thereto, which were granted by the governing bodies of the respective municipalities, parishes and public authorities in the State of Louisiana, including, in addition to those described in the Mortgage and in the First through Forty-first Supplemental Indentures, those which are shown together with the expiration dates thereof in the following schedule:
MUNICIPAL ELECTRIC FRANCHISES
	
			
	Municipality
	Parishes
	Expiration

	Junction City
	Union and Claiborne
	January 2, 2015

Also all other franchises, privileges, permits, grants and consents owned or hereafter acquired by the Company for the construction, operation and maintenance of electric systems in, on or under streets, alleys, highways, roads, and public grounds, areas and rights-of-way and/or for the supply and sale of electricity and all rights incident thereto, subject, however, to the provisions of Section 87 of the Mortgage.
All other property, real, personal and mixed, acquired by the Company after the date of the execution and delivery of the Mortgage, in addition to property covered by the First through Forty-first Supplemental Indentures (except any herein or in the Mortgage or in said Supplemental Indentures expressly excepted), now owned or, subject to the provisions of Section 87 of the Mortgage, hereafter acquired by the Company (by purchase, consolidation, merger, donation, construction, erection or in any other way) and wheresoever situated, including (without in anywise limiting or impairing by the enumeration of the same the scope and intent of the foregoing or of any general description contained in this Forty-second Supplemental Indenture) all lands, power sites, flowage rights, water rights, water locations, water appropriations, ditches, flumes, reservoirs, reservoir sites, canals, raceways, dams, dam sites, aqueducts and all other rights or means for appropriating, conveying, storing and supplying water; all rights-of-way and roads; all plants for the generation of electricity by steam, water and/or other power; all power houses, gas plants, street lighting systems, standards and other equipment incidental thereto, telephone, radio and television systems, air-

conditioning systems and equipment incidental thereto, water works, water systems, steam heat and hot water plants, substations, lines, service and supply systems, bridges, culverts, tracks, ice or refrigeration plants and equipment, offices, buildings and other structures and the equipment thereof; all machinery, engines, boilers, dynamos, electric, gas and other machines, regulators, meters, transformers, generators, motors, electrical, gas and mechanical appliances, conduits, cables, water, steam heat, gas or other pipes, gas mains and pipes, service pipes, fittings, valves and connections, pole and transmission lines, wires, cables, tools, implements, apparatus, furniture and chattels; all municipal and other franchises, consents, or permits; all lines for the transmission and distribution of electric current, gas, steam heat or water for any purpose, including towers, poles, wires, cables, pipes, conduits, ducts and all apparatus for use in connection therewith; all real estate, lands, easements, servitudes, licenses, permits, franchises, privileges, rights-of-way and other rights in or relating to real estate or the occupancy of the same and (except as herein or in the Mortgage, as heretofore supplemented, expressly excepted) all the right, title and interest of the Company in and to all other property of any kind or nature appertaining to and/or used and/or occupied and/or enjoyed in connection with any property hereinbefore or in the Mortgage, as heretofore supplemented, described.
TOGETHER WITH all and singular the tenements, hereditaments, prescriptions, servitudes and appurtenances belonging or in any wise appertaining to the aforesaid property or any part thereof, with the reversion and reversions, remainder and remainders and (subject to the provisions of Section 57 of the Mortgage) the tolls, rents, revenues, issues, earnings, income, product and profits thereof, and all the estate, right, title and interest and claim whatsoever, at law as well as in equity, which the Company now has or may hereafter acquire in and to the aforesaid property and franchises and every part and parcel thereof.
IT IS HEREBY AGREED by the Company that, subject to the provisions of Section 87 of the Mortgage, all the property, rights and franchises acquired by the Company (by purchase, consolidation, merger, donation, construction, erection or in any other way) after the date hereof (except any herein or in the Mortgage, as heretofore supplemented, expressly excepted), shall be and are as fully granted and conveyed hereby and as fully embraced within the lien hereof and the lien of the Mortgage, as if such property, rights and franchises were now owned by the Company and were specifically described herein and conveyed hereby.
PROVIDED THAT the following are not and are not intended to be now or hereafter granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, hypothecated, affected, pledged, set over or confirmed hereunder and are hereby expressly excepted from the lien and operation of this Forty-second Supplemental Indenture and from the lien and operation of the Mortgage, namely: (1) cash, shares of stock, bonds, notes and other obligations and other securities not hereafter specifically pledged, paid, deposited, delivered or held under the Mortgage or covenanted so to be; (2) merchandise, equipment, materials or supplies held for the purpose of sale in the usual course of business and fuel, oil and similar materials and supplies consumable in the operation of any properties of the Company; rolling stock, buses, motor coaches, automobiles and other vehicles and all aircraft; (3) bills, notes and accounts receivable, judgments, demands and choses in action, and all contracts, leases and operating agreements not specifically pledged under the Mortgage or covenanted so to be; (4) the last day of the term of any lease or leasehold which may hereafter become subject to the lien of the Mortgage; (5) electric energy, gas, ice, and other materials or products generated, manufactured, produced or purchased by the Company for sale, distribution or use in the ordinary course of its business; all timber, minerals, mineral rights and royalties; (6) the Company’s franchise to be a corporation; and (7) any property heretofore released pursuant to any provisions of the Mortgage and not heretofore disposed of by the Company; provided, however, that the property and rights expressly excepted from the lien and operation of the Mortgage in the above subdivisions (2) and (3) shall (to the extent permitted by law) cease to be so excepted in the event and as of the date that either or both of the Trustees or their successor or successors in said trust or a receiver or trustee shall enter upon and take possession of the 

Mortgaged and Pledged Property in the manner provided in Article XIII of the Mortgage by reason of the occurrence of a Default as defined in Section 65 thereof.
TO HAVE AND TO HOLD ALL such properties, real, personal and mixed, granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, hypothecated, affected, pledged, set over or confirmed by the Company as aforesaid, or intended so to be, unto Z. George Klodnicki and (to the extent of its legal capacity to hold the same for the purposes hereof) to Bank of Montreal Trust Company, as Trustees, and their successors and assigns forever.
IN TRUST NEVERTHELESS, for the same purposes and upon the same terms, trusts and conditions and subject to and with the same provisos and covenants as are set forth in the Mortgage, as supplemented, this Forty-second Supplemental Indenture being supplemental thereto.
AND IT IS HEREBY COVENANTED by the Company that all the terms, conditions, provisos, covenants and provisions contained in the Mortgage, as supplemented, shall affect and apply to the property hereinbefore described and conveyed and to the estate, rights, obligations and duties of the Company and the Trustees and the beneficiaries of the trust with respect to said property, and to the Trustees and their successors as Trustees of said property in the same manner and with the same effect as if said property had been owned by the Company at the time of the execution of the Mortgage, and had been specifically and at length described in and conveyed to said Trustees by the Mortgage as a part of the property therein stated to be conveyed.
The Company further covenants and agrees to and with the Trustees and their successor or successors in said trust under the Mortgage as follows:

ARTICLE I

FORTY-FIFTH SERIES OF BONDS

Section 1.There shall be a series of bonds designated “Environmental Series A” (herein sometimes called the “Forty-fifth Series”), each of which shall also bear the descriptive title “First Mortgage Bond”, and the form thereof, which shall be established by Resolution of the Board of Directors of the Company, shall contain suitable provisions with respect to the matters hereinafter in this Section specified. Bonds of the Forty-fifth Series (which shall be initially issued in the aggregate principal amount of $52,500,000) shall mature on June 1, 2021, shall be issued as fully registered bonds in the denomination of One Thousand Dollars and such other denominations as the officers of the Company shall determine to issue (such determination to be evidenced by the execution and delivery thereof), shall be dated as in Section 10 of the Mortgage provided, and the principal of, and, to the extent permitted by the Mortgage, interest on any overdue principal of, each said bond shall be payable at the office or agency of the Company in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for public and private debts.

(I)The bonds of the Forty-fifth Series shall be issued and delivered to, and registered in the name of, the trustee under the Trust Indenture, dated as of June 1, 1991 (hereinafter called the “St. Charles Indenture”), of the Parish of St. Charles, Louisiana (hereinafter called the “Parish”), relating to its 71⁄2% Pollution Control Revenue Bonds (Louisiana Power & Light Company Project) Series 1991 (hereinafter called the “St. Charles Bonds”), in order to evidence in part the Company’s obligation to make certain 

purchase price payments under the Installment Sale Agreement, dated as of June 1, 1991, between the Parish and the Company.

The obligation of the Company to make any payment of principal of the bonds of the Forty-fifth Series, whether at maturity, upon redemption or otherwise, shall be reduced by the amount of any reduction under the St. Charles Indenture of the amount of the corresponding payment required to be made by the Parish thereunder in respect of the principal of the St. Charles Bonds. The Corporate Trustee may conclusively presume that the obligation of the Company to pay the principal of the bonds of the Forty-fifth Series as the same shall become due and payable shall have been fully satisfied and discharged unless and until it shall have received a written notice from the trustee under the St. Charles Indenture, signed by its President, a Vice President or a Trust Officer, stating that the corresponding payment of principal of the St. Charles Bonds has become due and payable and has not been fully paid and specifying the amount of funds required to make such payment.
(II)In the event that the St. Charles Bonds outstanding under the St. Charles Indenture shall become immediately due and payable pursuant to Section 10.2 of the St. Charles Indenture, upon the occurrence of an Event of Default under Section 10.1 (a) or (b) of the St. Charles Indenture, all bonds of the Forty-fifth Series then outstanding shall be redeemed by the Company, on the date such St. Charles Bonds shall have become immediately due and payable, at the principal amount of the bonds of the Forty-fifth Series.

In the event that any St. Charles Bonds are to be redeemed pursuant to Section 3.1 (b) of the St. Charles Indenture, bonds of the Forty-fifth Series, in a principal amount equal, as nearly as practicable, to the sum of (i) the principal amount of such St. Charles Bonds and (ii) eight-twelfths (8/12) of the annual interest due on such St. Charles Bonds, shall be redeemed by the Company, on the date fixed for such redemption of St. Charles Bonds, at the principal amount thereof.
The Corporate Trustee may conclusively presume that no redemption of bonds of the Forty-fifth Series is required pursuant to this subsection (II) unless and until it shall have received a written notice (which may be a facsimile followed by a hard copy) from the trustee under the St. Charles Indenture, signed by its President, a Vice President or a Trust Officer, stating that the St. Charles Bonds have become immediately due and payable pursuant to Section 10.2 of the St. Charles Indenture, upon the occurrence of an Event of Default under Section 10.1 (a) or (b) of the St. Charles Indenture, or St. Charles Bonds are to be redeemed pursuant to Section 3.1 (b) of the St. Charles Indenture and specifying the principal amount thereof, as the case may be. Said notice shall also contain a waiver of notice of such redemption by the trustee under the St. Charles Indenture, as the holder of all the bonds of the Forty-fifth Series then outstanding.
(III)The Company hereby waives its right to have any notice of any redemption pursuant to subsection (II) of this Section 1 state that such notice is subject to the receipt of the redemption moneys by the Corporate Trustee before the date fixed for redemption. Notwithstanding the provisions of Section 52 of the Mortgage, any such notice under such subsection shall not be conditional.

(IV)At the option of the registered owner, any bonds of the Forty-fifth Series, upon surrender thereof for cancellation at the office or agency of the Company in the Borough of Manhattan, The City of New York, together with a written instrument of transfer wherever required by the Company, duly executed by the registered owner or by his duly authorized attorney, shall (subject to the provisions of Section 12 of the Mortgage) be exchangeable for a like aggregate principal amount of bonds of the same series of other authorized denominations.

Bonds of the Forty-fifth Series shall not be transferable except to any successor trustee under the St. Charles Indenture, any such transfer to be made (subject to the provisions of Section 12 of the Mortgage) at the office or agency of the Company in the Borough of Manhattan, The City of New York.
The Company hereby waives any right to make a charge for any exchange or transfer of bonds of the Forty-fifth Series.
(V)The bonds of the Forty-fifth Series may bear such legends as may be necessary to comply with any law or with any rules or regulations made pursuant thereto or with the rules or regulations of any stock exchange or to conform to usage with respect thereto.

ARTICLE II

MISCELLANEOUS PROVISIONS

Section 2.Subject to any amendments provided for in this Forty-second Supplemental Indenture, the terms defined in the Mortgage, as heretofore supplemented, shall, for all purposes of this Forty-second Supplemental Indenture, have the meanings specified in the Mortgage, as heretofore supplemented.

Section 3.The Trustees hereby accept the trusts herein declared, provided, created or supplemented and agree to perform the same upon the terms and conditions herein and in the Mortgage, as heretofore amended, set forth and upon the following terms and conditions:

The Trustees shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Forty-second Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. In general, each and every term and condition contained in Article XVII of the Mortgage, as heretofore amended, shall apply to and form part of this Forty-second Supplemental Indenture with the same force and effect as if the same were herein set forth in full with such omissions, variations and insertions, if any, as may be appropriate to make the same conform to the provisions of this Forty-second Supplemental Indenture.
Section 4.Whenever in this Forty-second Supplemental Indenture either of the parties hereto is named or referred to, this shall, subject to the provisions of Articles XVI and XVII of the Mortgage, as heretofore amended, be deemed to include the successors and assigns of such party, and all covenants and agreements in this Forty-second Supplemental Indenture contained by or on behalf of the Company, or by or on behalf of the Trustees, or either of them, shall, subject as aforesaid, bind and inure to the respective benefits of the respective successors and assigns of such parties, whether so expressed or not.

Section 5.Nothing in this Forty-second Supplemental Indenture, expressed or implied, is intended, or shall be construed, to confer upon, or give to, any person, firm or corporation, other than the parties hereto and the holders of the bonds and coupons Outstanding under the Mortgage, any right, remedy or claim under or by reason of this Forty-second Supplemental Indenture or any covenant, condition, stipulation, promise or agreement hereof, and all the covenants, conditions, stipulations, promises and agreements in this Forty-second Supplemental Indenture contained by or on behalf of the Company shall be for the sole and exclusive benefit of the parties hereto, and of the holders of the bonds and coupons Outstanding under the Mortgage.

Section 6.It is the intention and it is hereby agreed that, so far as concerns that portion of the Mortgaged and Pledged Property situated within the State of Louisiana, the general language of conveyance contained in this Forty-second Supplemental Indenture is intended and shall be construed as words of hypothecation and not of conveyance, and that, so far as the said Louisiana property is concerned, this Forty-second Supplemental Indenture shall be considered as an act of mortgage and pledge under the laws of the State of Louisiana, and the Trustees herein named are named as mortgagee and pledgee in trust for the benefit of themselves and of all present and future holders of bonds and coupons issued and to be issued under the Mortgage, and are irrevocably appointed special agents and representatives of the holders of the bonds and coupons issued and to be issued under the Mortgage and vested with full power in their behalf to effect and enforce the mortgage and pledge hereby constituted for their benefit, or otherwise to act as herein provided for.

Section 7.This Forty-second Supplemental Indenture shall be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

Section 8.The Company reserves the right, without any consent or other action by holders of bonds of the Forty-fifth Series or of any subsequently created series, to amend the Mortgage, as heretofore amended and supplemented, as follows:

To amend subdivision (e) of Section 6 of the Mortgage to read as follows:
“(e) easements, ground leases, restrictions, exceptions or reservations in any property and/or rights of way of the Company for the purpose of roads, pipe lines, transmission lines, transportation lines, distribution lines, communication lines, railways, removal of coal or other minerals or timber, and other like purposes, or for the joint or common use of real property, rights of way, facilities and/or equipment, and defects, irregularities and deficiencies in titles of any property and/or rights of way which do not materially impair the use of such property and/or rights of way for the purposes for which such property and/or rights of way are held by the Company;”
To amend Section 58 of the Mortgage by deleting the word “and” at the end of subdivision (2), replacing the period at the end of subdivision (3) with a semicolon, and adding the following subdivision (4) at the end of Section 58 to read as follows:
“and (4) grant, free from the Lien of this Indenture, and effect the subordination of the Lien of this Indenture to, easements, ground leases or rights of way in, upon, over and across the property or rights of way of the Company for the purpose of roads, pipe lines, transmission lines, transportation lines, distribution lines, communication lines, railways, removal of coal or other minerals or timber, and other like purposes, or for the joint or common use of real property, rights of way, facilities and/or equipment; provided that such grant does not materially impair the use of the property or rights of way for the purposes for which such property or rights of way are held by the Company.”
Section 9.The Company reserves the right, without any consent or other action by holders of bonds of the Forty-fifth Series or of any subsequently created series, to amend the Mortgage, as heretofore amended and supplemented, as follows:

To amend subdivision (3) (b) and (c) of Section 59 of the Mortgage to read as follows:
“(b) (i) the fair value and (ii) the Cost (or as to Property Additions constituting Funded Property of which the fair value to the Company at the time the same became Funded Property was less than the Cost as determined pursuant to Section 4 hereof, then such fair value in lieu of Cost), in the opinion 

of the signers, of the property (or securities) to be released; (c) the Cost (or as to Property Additions constituting Funded Property of which the fair value to the Company at the time the same became Funded Property was less than the Cost as determined pursuant to Section 4 hereof, then such fair value in lieu of Cost), in the opinion of the signers, of any portion thereof that is Funded Property;”
To amend the first six lines of subdivision (4) of Section 59 of the Mortgage to read as follows:
“(4) an amount in cash, to be held by the Corporate Trustee as part of the Mortgaged and Pledged Property, equivalent to the amount, if any, by which the Cost (or as to Property Additions constituting Funded Property of which the fair value to the Company at the time the same became Funded Property was less than the Cost as determined pursuant to Section 4 hereof, then such fair value in lieu of Cost) of the property to be released, as specified in the Engineer’s Certificate provided for in subdivision (3) above, exceeds the aggregate of the following items:”
To amend Section 60 of the Mortgage by inserting “(I)” before the word “Unless” in the first line thereof, and by adding the following Subsection (II) at the end of Section 60;
“(II) Unless the Company is in default in the payment of the interest on any bonds then Outstanding hereunder or one or more of the Defaults defined in Section 65 hereof shall have occurred and be continuing, the Company may obtain the release of any of the Mortgaged and Pledged Property that is not Funded Property, except cash then held by the Corporate Trustee (provided, however, that Qualified Lien Bonds deposited with the Corporate Trustee shall not be released or surrendered except as provided in Article IX hereof and obligations secured by purchase money mortgage deposited with the Corporate Trustee shall not be released except as provided in Section 61 hereof), and the Corporate Trustee shall release all its right, title and interest in and to the same from the Lien hereof upon application of the Company and receipt by the Corporate Trustee of the following (in lieu of complying with the requirements of Section 59 hereof):
(1)an Officers’ Certificate complying with the requirements of Section 121 hereof and describing in reasonable detail the property to be released and requesting such release, and stating:

(a)that the Company is not in default in the payment of interest on any bonds then Outstanding hereunder and that no Default has occurred and is continuing;

(b)that the Company has sold, leased, granted an interest in, exchanged, dedicated or disposed of, or intends or has agreed to sell, lease, grant an interest in, exchange, dedicate or dispose of or that a governmental body or agency has exercised a right to order the Company to divest itself of, the property to be released;

(c)that the property to be released is not Funded Property;

(d)that (except in any case where a governmental body or agency has exercised a right to order the Company to divest itself of such property) such release is in the opinion of the signers desirable in the conduct of the business of the Company; and

(e)the amount of cash and/or principal amount of obligations secured by purchase money mortgage received or to be received for any portion of said property sold to any Federal, State, County, Municipal or other governmental bodies or agencies or public or semi-public corporations, districts, or authorities;

(2)an Engineer’s Certificate, made and dated not more than ninety (90) days prior to the date of such application, stating:

(a)the fair value, in the opinion of the signers, of the property (or securities) to be released;

(b)that in the opinion of the signers such release will not impair the security under this Indenture in contravention of the provisions hereof; and

(c)that the Company has Property Additions constituting property that is not Funded Property (not including the Property Additions then being released) of a Cost or fair value to the Company (whichever is less) of not less than one dollar ($1) (after making any deductions and any additions pursuant to the provisions of Section 4 hereof) after deducting the Cost of the property then being released;

(3)an Opinion of Counsel complying with the requirements of Section 121 hereof and stating that all conditions precedent provided for in this Indenture relating to the release of the property in question have been complied with; and

(4)in case the Corporate Trustee is requested to release any franchise, an Opinion of Counsel complying with the requirements of Section 121 hereof and stating that in his or their opinion such release will not impair to any material extent the right of the Company to operate any of its remaining properties.”

To amend the fifth paragraph of Section 3 of the Mortgage to read as follows:
“The term ‘Engineer’s Certificate’ shall mean a certificate signed by the President or a Vice-President of the Company and by an Engineer (who may be an employee of the Company) appointed by the Board of Directors of the Company; provided, however, if any property or securities are to be released from the Lien of this Indenture, the Engineer’s Certificate as to the fair value of such property or securities and as to matters referred to in clause (f) of subdivision (3) of Section 59 hereof or clause (b) of subdivision (2) of Section 60 (II) hereof shall be made by an independent Engineer, appraiser, or other expert, if the fair value of such property or securities and of all other property or securities released since the commencement of the then current calendar year, as set forth in the certificates required by this Indenture, is ten per centum (10%) or more of the aggregate principal amount of the bonds at the time Outstanding; but such a certificate of an independent Engineer, appraiser, or other expert shall not be required in the case of any release of property or securities, if the fair value thereof as set forth in the certificates required by this Indenture is less than Twenty-five Thousand Dollars ($25,000) or less than one per centum (1%) of the aggregate principal amount of the bonds at the time Outstanding. If and to the extent required by the provisions of Section 121 hereof, each such certificate shall include the statements provided for in such Section.”IN WITNESS WHEREOF, LOUISIANA POWER & LIGHT COMPANY has caused its corporate name to be hereunto affixed, and this instrument to be signed and sealed by its President or one of its Vice Presidents, and its corporate seal to be attested by its Secretary or one of its Assistant Secretaries, for and in its behalf, and BANK OF MONTREAL TRUST COMPANY, in token of its acceptance of the trust hereby created, has caused its corporate name to be hereunto affixed, and this instrument to be signed and sealed by one of its Vice Presidents or Assistant Vice Presidents and its corporate seal to be attested by one of its Assistant Secretaries and Z. George Klodnicki, in token of his acceptance of the trust hereby created, has hereunto set his hand and affixed his seal, all as of the day and year first above written.

	
		
	[CORPORATE SEAL]
	LOUISIANA POWER & LIGHT COMPANY 

By /s/ T. O. Lind                                        
      T. O. Lind 
       Vice President

	Attest:

/s/ N. J. Briley                                   
N. J. Briley
Assistant Secretary

	 

	Executed, sealed and delivered by
LOUISIANA Power & Light Company 
in the presence of:

/s/ Audrey Jacks                               
Audrey Jacks

/s/ Joni Bathel                                   
Joni Bathel
	 

	
		
	[CORPORATE SEAL]
	BANK OF MONTREAL TRUST COMPANY,
As Corporate Trustee

By  /s/ Mark F. McLaughlin                              
      Mark F. McLaughlin
       Vice President and Trust Officer

	Attest:

/s/ Therese Gaballah                      
Therese Gaballah
Assistant Secretary
	 

	

	/s/ Z. George Klodnicki        [L.S.] 
Z. George Klodnicki
As Co-Trustee

	Executed, sealed and delivered by
BANK OF MONTREAL TRUST COMPANY and Z. GEORGE KLODNICKI
in the presence of:

/s/ Maryann Luisi                           
Maryann Luisi

/s/ Magaly Lebron                         
Magaly Lebron
	 

	
			
	STATE OF LOUISIANA 
PARISH OF ORLEANS
	}
	ss.:

On this 2nd day of August, 1991, before me appeared T. O. LIND, to me personally known, who, being by me duly sworn, did say that he is a Vice President of LOUISIANA POWER & LIGHT COMPANY, and that the seal affixed to the above instrument is the corporate seal of said corporation and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors, and said T. O. LIND acknowledged said instrument to be the free act and deed of said corporation.
On the 2nd day of August, in the year 1991, before me personally came T. O. LIND, to me known, who, being by me duly sworn, did depose and say that he resides at 1126 Octavia Street, New Orleans, State of Louisiana; that he is a Vice President of LOUISIANA POWER & LIGHT COMPANY, one of the corporations described in and which executed the above instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal, that it was so affixed by order of the Board of Directors of said corporation, and that he signed his name thereto by like order.
/s/ MARY HULL TOOKER    
MARY HULL TOOKER
NOTARY PUBLIC
Parish of Orleans, State of Louisiana
My Commission is Issued for Life

	
			
	STATE OF NEW YORK COUNTY OF NEW YORK
	}
	ss.:

On this 5th day of August, 1991, before me appeared MARK F. MCLAUGHLIN, to me personally known, who, being by me duly sworn, did say that he is a Vice President of BANK OF MONTREAL TRUST COMPANY, and that the seal affixed to the above instrument is the corporate seal of said corporation and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors, and said MARK F. MCLAUGHLIN acknowledged said instrument to be the free act and deed of said corporation.
On the 5th day of August in the year 1991, before me personally came MARK F. MCLAUGHLIN, to me known, who, being by me duly sworn, did depose and say that he resides at 44 Norwood Avenue, Allenhurst, New Jersey 07711; that he is a Vice President of BANK OF MONTREAL TRUST COMPANY, one of the corporations described in and which executed the above instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal, that it was so affixed by order of the Board of Directors of said corporation, and that he signed his name thereto by like order.
/s/ MAUREEN RADIGAN    
MAUREEN RADIGAN
NOTARY PUBLIC, State of New York
No. 31-4971219
Qualified in New York County
Commission Expires August 27, 1992

	
			
	STATE OF NEW YORK COUNTY OF NEW YORK
	}
	ss.:

On this 5th day of August, 1991, before me personally appeared Z. GEORGE KLODNICKI, to me known to be the person described in and who executed the foregoing instrument, and acknowledged that he executed the same as his free act and deed.
On the 5th day of August, 1991, before me personally came Z. GEORGE KLODNICKI, to me known to be the person described in and who executed the foregoing instrument, and acknowledged that he executed the same.
/s/ MAUREEN RADIGAN    
MAUREEN RADIGAN
NOTARY PUBLIC, State of New York
No. 31-4971219
Qualified in New York County
Commission Expires August 27, 1992

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