As filed with the Securities and Exchange Commission on December __, 1996
Registration No. 333-01329
SECURITIES AND EXCHANGE COMMISSION
Pre-Effective
Amendment No. 2 to
Form S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Entergy Louisiana, Inc.
(formerly Louisiana Power & Light Company)
(Exact name of registrant as specified in its charter)
State of Louisiana 72-0245590
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
639 Loyola Avenue, New Orleans, Louisiana 70113
504-576-4000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
JOHN J. CORDARO STEVEN C. McNEAL
President Assistant Treasurer
Entergy Louisiana, Inc. Entergy Louisiana, Inc.
639 Loyola Avenue 639 Loyola Avenue
New Orleans, Louisiana 70113 New Orleans, Louisiana 70113
504-576-4000 504-576-4000
McCHORD CARRICO, Esq. JOHN T. HOOD, Esq.
Monroe & Lemann Reid & Priest LLP
(A Professional Corporation) 40 West 57th Street
201 St. Charles Avenue New York, New York 10019
New Orleans, Louisiana 70170 212-603-2000
504-586-1900
(Names, addresses, including zip codes, and telephone numbers, including
area codes, of agents for service)
It is also respectfully requested that the Commission send copies of all
notices, orders and communications to:
DAVID P. FALCK, Esq.
Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, New York 10004
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that
this registration statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
PROSPECTUS SUPPLEMENT (Subject to Completion, Dated __________, 1996)
(To Prospectus dated ______________, 1996)
$
$ Waterford 3 Secured Lease Obligation Bonds, % Series due
$ Waterford 3 Secured Lease Obligation Bonds, % Series due
Interest Payable July 2 and January 2
The Waterford 3 Secured Lease Obligation Bonds, % Series due
and % Series due (the "Collateral Bonds") will be
indirectly secured, as described in the accompanying Prospectus, by
liens on, and a security interest in, certain ownership interests in and
the respective Leases relating to Unit No. 3 (nuclear) of the Waterford
Steam Electric Generating Station ("Waterford 3"), and will be payable
solely from basic rentals and certain other amounts to be paid under
such Leases by
ENTERGY LOUISIANA, INC.
The Collateral Bonds will be issued by W3A Funding Corporation ("Funding
Corporation"), a corporation created for the sole purpose of issuing the
Collateral Bonds as described in the accompanying Prospectus. Entergy
Louisiana, Inc. (formerly Louisiana Power & Light Company) (the
"Company") will be unconditionally obligated to make rental payments in
amounts which will be at least sufficient to pay in full, when due, all
scheduled payments of principal of and interest on the Collateral Bonds,
although the Collateral Bonds will not be direct obligations of, or
guaranteed by, the Company.
The Collateral Bonds of the % Series due (the "Series
Collateral Bonds") will mature on __________ and the Collateral Bonds of
the % Series due (the "Series Collateral Bonds") will
mature on . The principal of the Collateral Bonds will be
payable from time to time in installments. The Collateral Bonds will be
redeemable, in whole or in part, on not less than 30 days' notice,
either upon certain terminations of the Leases, or at the option of
Funding Corporation at the redemption prices set forth herein (including
a Make-Whole Premium (as defined herein) if redemption occurs at the
option of Funding Corporation prior to ________ for the Series
Collateral Bonds and ____ for the Series Collateral Bonds), in each
case together with accrued interest to the date fixed for redemption.
(See "Certain Terms of the Collateral Bonds.")
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
PRICE OF SERIES COLLATERAL BONDS- % AND ACCRUED INTEREST, IF ANY
PRICE OF SERIES COLLATERAL BONDS- % AND ACCRUED INTEREST, IF ANY
Price Underwriting
to Public Commissions Proceeds
(1) (2)(3) (1)(2)
Per Series Collateral Bond % %0000 %
Total $00,000 $0,000,000000000000 $0,000,000
Per Series Collateral Bond % %0000 %
Total $00,000 $0,000,000000000000 $0,000,000
_______________________________
(1) Plus accrued interest, if any, from the date of original issuance.
(2) Expenses, estimated to be $________, and underwriting commissions
will be paid from the proceeds of the issuance and sale of the
Collateral Bonds. Expenses, estimated to be $ , will be paid
by the Company.
(3) The Company has agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities Act
of 1933.
The Collateral Bonds will be issued in fully registered form and will
be initially registered only in the name of Cede & Co, as nominee of The
Depository Trust Company ("DTC"), which will act as securities
depository for the Collateral Bonds. Beneficial interests in the
Collateral Bonds will be shown on, and transfers thereof will be
effected only through, records maintained by DTC and its direct and
indirect participants. Except in the limited circumstances described
herein, certificates representing interests in Collateral Bonds will not
be issued in exchange for beneficial interests in the Collateral Bonds.
Beneficial interests in the Collateral Bonds will trade in DTC's Same-
Day Funds Settlement System and secondary market trading in such
Collateral Bonds will therefore settle in immediately available funds.
The Collateral Bonds are offered by the Underwriters named herein
subject to prior sale, when, as and if accepted by the Underwriters, and
subject to approval of certain legal matters by Winthrop, Stimson,
Putnam & Roberts, counsel for the Underwriters, and certain other
conditions. It is expected that delivery of the Collateral Bonds will
be made on or about ____________, 199_ through the book-entry facilities
of DTC against payment therefor in immediately available funds.
MORGAN STANLEY & CO. CITICORP SECURITIES, INC.
Incorporated
_____________, 199_
SELECTED INFORMATION
The following material, which is presented herein solely to
furnish limited introductory information regarding the Collateral
Bonds, is qualified in its entirety by reference to the detailed
information appearing elsewhere in this Prospectus Supplement and
the accompanying Prospectus. Certain capitalized terms used in
this Prospectus Supplement and the accompanying Prospectus are
defined in the Glossary at the end of the accompanying
Prospectus.
Securities Offered; Interest
$ aggregate principal amount of Waterford 3
Secured Lease Obligation Bonds, of which $___________ bear
interest at the rate of % per annum and mature on
("Series Collateral Bonds"), and $___________ bear interest
at the rate of % per annum and mature on ("Series
Collateral Bonds").
Interest on the Collateral Bonds of each series will be
payable on January 2 and July 2 of each year, commencing
2, 199 .
Principal Installment Payments
The Supplemental Indenture relating to the Collateral Bonds
("Supplemental Indenture") provides for the payment of principal
installments on the Collateral Bonds on each of the Installment
Payment Dates set forth below, in an aggregate amount (subject to
adjustment in certain circumstances) equal to the Installment
Payment Amounts (as defined herein) set forth below, together
with interest accrued to such Installment Payment Date. The
Outstanding Balance Factor set forth below for each Installment
Payment Date is for descriptive purposes only, and, unless there
has been a partial redemption or a default or other installment
payment adjustment, represents a factor that when multiplied by
the original principal amount of each Series Collateral Bond
and Series Collateral Bond will indicate the outstanding
principal amount of such Collateral Bond remaining unpaid after
payment of the principal installment due on such Installment
Payment Date.
Installment Aggregate Installwmnt Payment Amount Outstanding Balance Factor
Payment Date -------------------------------------- ---------------------------
------------
Series Collateral Series Collateral Series Collateral Series Collateral
Bonds Bonds Bonds Bonds
--------------------- ------------------ ----------------- -------------------
(See "Certain Terms of the Collateral Bonds-Principal Installment
Payments.")
Redemption
The Collateral Bonds will be redeemable, in whole or in part,
on not less than 30 days' notice, either (a) upon certain
terminations of the Leases at a redemption price of 100% of the
unpaid principal amount thereof plus accrued interest, if any, to
the redemption date or (b) at the option of Funding Corporation,
at a redemption price of 100% of the unpaid principal amount
thereof plus accrued interest, if any, to the redemption date,
plus a Make-Whole Premium (as defined herein) if such redemption
occurs at the option of Funding Corporation prior to ____________
for the Series Collateral Bonds and _________ for the Series
Collateral Bonds. (See "Certain Terms of the Collateral
Bonds-Redemption.")
Security and Source of Payment
The Collateral Bonds will be indirectly secured, as described
in the accompanying Prospectus, by liens on, and a security
interest in, certain ownership interests in and the respective
Leases relating to Waterford 3, and will be payable solely from
basic rentals and certain other amounts to be paid under such
Leases by the Company. Each Collateral Bond will be secured by
the Pledged Lessor Bonds, which will be held by the Trustee.
Each Pledged Lessor Bond will be secured by, among other things,
(a) a lien on and security interest in the Undivided Interest of
the Lessor issuing such Pledged Lessor Bond and (b) certain of
the rights of such Lessor under its Lease with the Company,
including the right to receive basic rent and certain other
amounts payable by the Company thereunder. The Company is
unconditionally obligated to make payments under the Leases in
amounts that will be at least sufficient to provide for scheduled
payments of the principal of and interest on the Pledged Lessor
Bonds which amounts, in turn, will be sufficient to provide for
scheduled payments of principal of and interest on the Collateral
Bonds when due. However, neither the Collateral Bonds nor the
Pledged Lessor Bonds will be direct obligations of, or guaranteed
by, the Company. (See "Security and Source of Payment for the
Collateral Bonds" in the accompanying Prospectus.)
Upon the occurrence and continuance of any Lease Indenture
Event of Default that results from a Lease Event of Default, the
related Lessor will control the exercise of remedies against the
Company under the related Lease, subject to the right of the
Lease Indenture Trustee to cause such Lessor to forbear from any
proposed action which would have a material adverse effect on the
Holders of the related Lessor Bonds. There could be
circumstances, therefore, in which amounts due on the Collateral
Bonds are not paid and neither the Lease Indenture Trustee nor
the Trustee would be able to direct such Lessor's pursuit of
remedies against the Company under such Lease. The Lease
Indenture Trustee would not be precluded, however, from selling
the related Lease Indenture Estate (including the Undivided
Interest) in a foreclosure or similar proceeding. If such sale
occurs prior to or simultaneously with the termination of the
related Lease, such Lessor must first be given an opportunity to
purchase such Lease Indenture Estate at the proposed sale price.
In the event of a sale pursuant to a foreclosure or similar
proceeding (other than a sale to such Lessor), the Lease
Indenture Trustee would have the right to terminate such Lease in
connection with such sale. (See "Description of the Lease
Indentures - Notice; Waiver; Acceleration and Remedies" in the
accompanying Prospectus.)
Under certain circumstances the Company (or jointly the
Company and an Affiliate thereof) may elect, or may be required,
to assume the Lessor Bonds issued under any Lease Indenture, in
whole or in part, and all obligations of the related Lessor under
such Lease Indenture. (See "Description of the Lease Indentures
- - Assumption by the Company" in the accompanying Prospectus.) In
such cases, the Holders of the Collateral Bonds would retain the
benefit of the pledge and mortgage under the Lease Indenture of
the related Undivided Interest and the obligation to make
payments on the Pledged Lessor Bonds would become a direct
obligation of the Company.
The Holders of the Collateral Bonds will have no recourse
against the general credit of any of the institutions or
individuals acting as Lessors or against the general credit of
the Owner Participant.
For a description of possible limitations on amounts payable
as damages if the Company were to reject the Leases in the
context of a bankruptcy proceeding, see "Security and Source of
Payment for the Collateral Bonds" in the accompanying Prospectus.
Waterford 3
Waterford 3 is a one-unit, nuclear-fueled electric generating
plant located in St. Charles Parish, Louisiana. Waterford 3,
which was placed in commercial operation in 1985, has a net
generating capability of 1,075 MW. Unit 3 excludes certain
transmission, pollution control and other facilities included in
Waterford 3.
Use of Proceeds
The Company has determined, in light of prevailing economic
and financial circumstances, to cause a refinancing of Initial
Lessor Bonds which were originally issued on September 28, 1989
and are currently outstanding. As part of such refinancing, the
Lessors will redeem outstanding Initial Lessor Bonds with the
proceeds of the issuance and sale of the Collateral Bonds and
certain other funds as described herein. (See "Use of Proceeds"
in this Prospectus Supplement and "The Transactions and the
Refinancing" in the accompanying Prospectus.)
W3A Funding Corporation
Funding Corporation was incorporated under the laws of the
State of Delaware for the purpose of facilitating the refinancing
of the debt associated with the Lessors' interests in Unit 3.
The assets of Funding Corporation will consist of the Pledged
Lessor Bonds, which are payable from basic rent and certain other
payments which the Company is unconditionally obligated to make
under the Leases. (See "W3A Funding Corporation" in the
accompanying Prospectus.)
CERTAIN TERMS OF THE COLLATERAL BONDS
The following description of certain terms of the Collateral
Bonds offered hereby supplements, and should be read together
with, the statements under "Description of the Collateral Bonds
and the Indenture" in the accompanying Prospectus. Capitalized
terms used in this Prospectus Supplement have the same meanings
as in the accompanying Prospectus.
Principal Amounts, Interest Rates, Stated Maturities and Payment
The Collateral Bonds will be issued in two separate series: $
principal amount of Waterford 3 Secured Lease Obligation Bonds,
% Series due (hereinafter sometimes called the "Series
Collateral Bonds") and $ principal amount of Waterford 3
Secured Lease Obligation Bonds, % Series due (hereinafter
sometimes called the "Series Collateral Bonds"). The Series
Collateral Bonds and the Series Collateral Bonds are
hereinafter sometimes referred to, collectively, as the
"Collateral Bonds."
The Series Collateral Bonds will mature , and
the Series Collateral Bonds will mature , . The
Collateral Bonds of each series will bear interest on the unpaid
principal amount thereof from the date of issuance at the rate
per annum shown in its title, payable on January 2 and July 2 of
each year, commencing 2, 199 , to the Holders thereof
at the close of business on the December 15 or June 15, as the
case may be, next preceding such interest payment date.
(Supplemental Indenture)
The Collateral Bonds will be issued originally solely in book-
entry form to DTC or its nominee, Cede & Co., to be held in DTC's
book-entry only system. So long as the Collateral Bonds are held
in the book-entry only system, DTC (or a successor securities
depositary) or its nominee will be the registered owner or holder
of the Collateral Bonds for all purposes of the Indenture and of
the Collateral Bonds. (See "-Book-Entry Only System" below.)
Except as described under "-Book-Entry Only System" below,
Beneficial Owners (as defined below) of the Collateral Bonds will
not have the right to have any Collateral Bonds registered in
their names and will not receive or have the right to receive
physical delivery of certificates representing their ownership
interests in the Collateral Bonds. For so long as any purchaser
is the Beneficial Owner of a Collateral Bond, such purchaser must
maintain an account with a broker or dealer who is, or acts
through, a DTC Participant (as defined below) to receive payment
of the principal of and premium, if any, and interest on such
Collateral Bond. The laws of some states may require that
certain purchasers of securities take physical delivery of such
securities. Such limits and laws may impair the ability to
transfer beneficial interests in Collateral Bonds.
So long as the Collateral Bonds are held in the book-entry
only system, the principal of and premium, if any, and interest
on the Collateral Bonds will be paid through the facilities of
DTC (or a successor securities depository). If the book-entry
only system is discontinued, the principal of and premium, if
any, and interest payable at maturity on the Collateral Bonds
will be payable at the corporate trust office of any paying agent
designated by Funding Corporation from time to time; and
interest and Installment Payment Amounts (as defined below),
other than such amounts payable at maturity, will be paid by
check drawn upon the paying agent and mailed to the address of
the person entitled thereto, as shown in the securities register.
Because the principal of each Collateral Bond will be subject
to payment from time to time without surrender of, or notation
on, the Collateral Bond, the unpaid principal amount of each
Collateral Bond as reflected in the securities register
maintained by the Trustee shall be controlling and binding on
each Holder with respect to the actual unpaid principal amount of
a Collateral Bond as of any date. In any case where any
redemption date, any Installment Payment Date or the stated
maturity of principal of or any installment of interest on any
Collateral Bond, or any date on which any defaulted interest or
principal is proposed to be paid, is not a business day, then
(notwithstanding any other provision of the Indenture or such
Collateral Bond) payment of interest and/or principal and
premium, if any, shall be due and payable on the next succeeding
business day with the same force and effect as if made on or at
such nominal redemption date, the stated maturity, Installment
Payment Date or date on which the defaulted interest or principal
is proposed to be paid, and no interest will accrue on the amount
so payable for the period from and after such redemption date,
stated maturity, Installment Payment Date or date for the payment
of defaulted interest or principal, as the case may be. If there
has been a default in the payment of interest or any Installment
Payment Amount on any Collateral Bond, such defaulted interest or
principal may be payable to the Holder of such Collateral Bond as
of the close of business on a date selected by the Trustee which
is not more than 15 days and not less than 10 days prior to the
date proposed by Funding Corporation for payment of such
defaulted interest or principal or in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which such Collateral Bond may be listed, if the Trustee deems
such manner of payment practicable. (Indenture, Sections 1.13,
2.10 and 2.16)
Principal Installment Payments
On each Installment Payment Date (set forth below), Funding
Corporation will pay an installment of principal of each
Collateral Bond of each series equal (subject to adjustment as
described below) in amount (an "Installment Payment Amount") to
the Installment Payment Percentage (set forth below) for the
Collateral Bonds of such series for such Installment Payment Date
multiplied by the original principal amount of such Collateral
Bond.
Installment
Installment Payment Percentage
Installment
Payment Date Series Collateral Bonds Series Collateral Bonds
Upon the occurrence of certain changes in Federal income tax
rates or laws, the Company or the Owner Participant may cause the
respective principal amounts of Series Collateral Bonds and
Series Collateral Bonds that are to be paid in installments
on the Installment Payment Dates and the stated maturity to be
adjusted to match any adjustment made to the principal
amortization schedules and maturity of the Pledged Lessor Bonds
in connection with a recalculation of basic rent under one or
more of the Leases, provided that such adjustments shall not
increase or decrease the average life of the Collateral Bonds of
either such series (calculated in accordance with generally
accepted financial practice) by more than 6 months or extend the
final maturity of such Collateral Bonds. The Trustee shall send
by mail to each Holder of affected Collateral Bonds at least 30
days before the first payment date with respect to which an
adjustment is to be made, a revised payment schedule of principal
amounts of Collateral Bonds.
In the event there shall have been any partial redemption of
the Collateral Bonds of either series (other than pursuant to
principal installment payments), each Installment Payment Amount
for each Collateral Bond of a series subsequent to such
redemption shall be reduced by (i) in the case of a partial
redemption as described under "Redemption-Optional Redemption,"
an amount equal to the amount obtained by multiplying such
Installment Payment Amount as in effect prior to such redemption
by a fraction of which the numerator shall be the aggregate
principal amount of Collateral Bonds of such series redeemed
pursuant to such partial redemption, and the denominator shall be
the aggregate unpaid principal amount of Collateral Bonds of such
series outstanding immediately prior to such redemption and (ii)
in the case of a partial redemption as described under
"Redemption-Redemption upon Lease Termination," an amount such
that the aggregate of all principal installment payments to be
made on the Collateral Bonds of such series on the relevant
Installment Payment Date shall be equal to the amount of
principal of the Pledged Lessor Bonds to be paid on such date
under the remaining Lease Indentures, any such reduction to be
made on a pro rata basis, as nearly as practicable, among the
Holders of the Collateral Bonds of such series.
(Supplemental Indenture)
Redemption
Redemption upon Lease Termination
If any Lease is to be terminated as described in the
accompanying Prospectus in "Description of the Leases-Purchase
Option for Significant Expenditures", "-Periodic Purchase Option"
or "-Termination for Obsolescence" or in "Other
Agreements-Participation Agreement", and all Lessor Bonds issued
under the related Lease Indenture are to be prepaid, Collateral
Bonds, equal in principal amount to the Pledged Lessor Bonds
issued under such Lease Indenture, will be redeemed on the date
on which such Lessor Bonds are to be prepaid, at a redemption
price of 100% of the unpaid principal amount thereof plus accrued
interest, if any, to the redemption date, all subject, however,
except in the case of a termination for obsolescence, to the
right of the Company to assume such Lessor Bonds in which event
there will be no redemption of Collateral Bonds as a consequence
of such termination.
Optional Redemption
The Collateral Bonds of each series will be subject to
redemption, at the option of Funding Corporation, in whole at any
time or in part from time to time, at the redemption price of
100% of the unpaid principal amount of such Collateral Bonds to
be so redeemed, plus accrued interest, if any, to the redemption
date, plus, if such redemption is made prior to the applicable
Premium Termination Date, the Make-Whole Premium, if any. The
"Premium Termination Date" is __________ for the Series ___
Collateral Bonds and __________ for the Series ___ Collateral
Bonds.
The Make-Whole Premium, if any, on the Collateral Bonds will
be determined by an independent investment banking institution of
national standing (the "Investment Banker") selected by the
Company. The Investment Bank will first determine the Treasury
Rate with respect to any redemption of Collateral Bonds. The
Treasury Rate means, with respect to each Collateral Bond to be
redeemed, a per annum rate (expressed as a semiannual equivalent
and as a decimal and, in the case of United States Treasury
bills, converted to a bond equivalent yield) determined to be the
per annum rate equal to the semiannual yield to maturity of
United States Treasury securities maturing on the Average Life
Date (as defined below) of such Collateral Bond, as determined by
interpolation between the most recent weekly average yields to
maturity for two series of United States Treasury securities (A)
one maturing as close as possible to, but earlier than, the
Average Life Date of such Collateral Bond and (B) the other
maturing as close as possible to, but later than, the Average
Life Date of such Collateral Bond, in each case as published in
the most recent H.15(519) (or, if a weekly average yield to
maturity for United States Treasury securities maturing on the
Average Life Date of such Collateral Bond is reported in the most
recent H.15(519), as published in H.15(519)). "H.15(519)" means
Statistical Release H.15(519), Selected Interest Rates," or any
successor publication, published by the Board of Governors of the
Federal Reserve System. The "most recent H.15(519)" means the
latest H.15(519) which is published prior to the close of
business on the third business day prior to the applicable
redemption date. The Average Life Date for any Collateral Bond
to be redeemed shall be the date which follows the redemption
date by a period equal to the Remaining Weighted Average Life of
such Collateral Bond. The Remaining Weighted Average Life of
such Collateral Bond with respect to the redemption of such
Collateral Bond is the number of days equal to the quotient
obtained by dividing (A) the sum of the products obtained by
multiplying (1) the amount of each remaining principal payment on
such Collateral Bond by (2) the number of days from and including
the redemption date, to but excluding the scheduled payment date
of such principal payment by (B) the unpaid principal amount of
such Collateral Bond.
To determine the Make-Whole Premium for any Collateral Bond,
the Investment Banker then will determine, as of the third
business day prior to the redemption date, the sum of the present
values of all of the remaining scheduled payments of principal
and interest from the redemption date to maturity on such
Collateral Bond computed on a semiannual basis by discounting
such payments (assuming a 360-day year consisting of twelve 30-
day months) using such Treasury Rate. If the sum of these
present values of the remaining payments as computed above
exceeds the aggregate unpaid principal amount of the Collateral
Bond to be redeemed plus any accrued but unpaid interest thereon,
the difference will be payable as a premium upon redemption of
such Collateral Bonds. If the sum is equal to or less than such
principal amount plus accrued interest, there will be no premium
payable with respect to such Collateral Bond.
Procedure for and Notice of Redemption
If fewer than all of the Collateral Bonds shall be called for
redemption, the particular Collateral Bonds or portions thereof
to be redeemed shall be selected by the Trustee from the series
and in the principal amount designated by Funding Corporation
except as otherwise required by the Indenture by prorating, as
nearly as practicable, the principal amount of such Collateral
Bonds to be redeemed among the Holders of such Collateral Bonds.
Any Collateral Bonds and portions of Collateral Bonds selected
for redemption which are deemed to be paid in accordance with the
provisions of the Indenture will cease to bear interest on the
specified redemption date. Notice of redemption shall be given
by mail not less than 30 nor more than 60 days prior to the date
fixed for redemption to the Holders of Collateral Bonds to be
redeemed (which, if the Collateral Bonds are held in the book-
entry only system, will be DTC or a successor depository);
provided, however, that failure to duly give such notice by mail,
or any defect therein, shall not affect the validity of any
proceedings for the redemption of Collateral Bonds as to which
there shall have been no such failure or defect.
With respect to notice of any redemption of the Collateral
Bonds, such notice will state that such redemption will be
conditional upon the receipt by the Trustee at or prior to the
date fixed for such redemption of money sufficient to pay the
principal of and premium, if any, and interest on such Collateral
Bonds. If such money is not so received, such notice will be of
no force and effect, Funding Corporation will not redeem such
Collateral Bonds and the Trustee will give notice, in the manner
in which the notice of redemption was given, that such money was
not so received, and such redemption is not required to be made.
(Indenture, Article Six; Supplemental Indenture; and form of
Collateral Bond)
Book-Entry Only System
DTC will act as securities depository for the Collateral
Bonds. The Collateral Bonds will be issued as fully-registered
securities registered in the name of Cede & Co. (DTC's
partnership nominee).
DTC is a limited-purpose trust company organized under the
New York Banking Law, a "banking organization" within the meaning
of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act.
DTC holds securities that its participants ("Direct
Participants") deposit with DTC. DTC also facilitates the
settlement among Direct Participants of securities transactions,
such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Direct
Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include
securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a
number of its Participants (as defined below) and by the New York
Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to the
DTC system is also available to others such as securities brokers
and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants," and
together with the Direct Participants, the "Participants"). The
Rules applicable to DTC and its Participants are on file with the
SEC.
Purchases of Collateral Bonds under the DTC system must be
made by or through Direct Participants, which will receive a
credit for the Collateral Bonds on DTC's records. The ownership
interest of each actual purchaser of each Collateral Bond
("Beneficial Owner") is in turn to be recorded on the Direct and
Indirect Participants' respective records. Beneficial Owners
will not receive written confirmation from DTC of their purchase,
but Beneficial Owners are expected to receive written
confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or
Indirect Participant through which the Beneficial Owner entered
into the transaction. Transfers of ownership interests in the
Collateral Bonds are to be accomplished by entries made on the
books of Participants acting on behalf of Beneficial Owners and
will be settled in same-day funds. Beneficial Owners will not
receive certificates representing their ownership interests in
the Collateral Bonds except in the event that use of the book-
entry system for the Collateral Bonds is discontinued.
To facilitate subsequent transfers, all Collateral Bonds
deposited by Participants with DTC are registered in the name of
DTC's partnership nominee, Cede & Co. The deposit of the
Collateral Bonds with DTC and their registration in the name of
Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Collateral
Bonds; DTC's records reflect only the identity of the Direct
Participant to whose accounts such Collateral Bonds are credited,
which may or may not be the Beneficial Owners. The Participants
will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by DTC to
Direct Participants, by Direct Participants to Indirect
Participants, and by either Direct or Indirect Participants to
Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in
effect from time to time. Redemption notices shall be sent by
the Trustee to Cede & Co.
Neither DTC nor Cede & Co. will consent or vote with respect
to Collateral Bonds. Under its usual procedures, DTC mails an
Omnibus Proxy to the Trustee as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts the
Collateral Bonds are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
Principal, premium, if any, and interest payments on the
Collateral Bonds will be made to DTC. DTC's practice is to
credit Direct Participants' accounts on the payable date in
accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payment
on the payable date. Payments by Participants to Beneficial
Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts
of customers in bearer form or registered in "street name," and
will be the responsibility of such Participants and not of DTC,
the Company, Funding Corporation, the Underwriters or the
Trustee, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Payment of principal, premium, if any, and interest to DTC is
the responsibility of the Trustee on behalf of Funding
Corporation, disbursement of such payments to Direct Participants
is the responsibility of DTC, and disbursement of such payments
to the Beneficial Owners is the responsibility of Participants.
If DTC is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed, Funding
Corporation will issue to Beneficial Owners individual
certificated Collateral Bonds representing their ownership
interests in Collateral Bonds. In addition, the Company may at
any time determine not to have any particular series of
Collateral Bonds held in the book-entry only system and, in such
event, Funding Corporation will issue to Beneficial Owners
individual certificated Collateral Bonds representing their
ownership interests in such Collateral Bonds. In any such
instance, a Beneficial Owner will be entitled to have such
certificated Collateral Bonds registered in its name. Individual
certificated Collateral Bonds so issued will be issued as
registered Collateral Bonds in denominations of $1,000 or any
integral multiple thereof.
The information in this section concerning DTC and DTC's book-
entry system has been obtained from sources that the Company
believes to be reliable, including DTC, but none of the Company,
Funding Corporation, the Underwriters or the Trustee takes
responsibility for the accuracy or completeness thereof.
None of the Company, the Trustee, Funding Corporation, the
Underwriters or any agent for payment on or registration of
transfer or exchange of the Collateral Bonds will have any
responsibility or liability for any aspect of the records
relating to or payments made on account of interests of
beneficial owners of any Collateral Bond or for maintaining,
supervising or reviewing any records relating to such interests.
USE OF PROCEEDS
Proceeds from the issuance of the Collateral Bonds will be
used to make loans to the Lessors, to be evidenced by the Pledged
Lessor Bonds, in amounts sufficient, together with amounts made
available to the Lessors by the Company as rent under the related
Leases to enable the Lessors to redeem the outstanding Initial
Lessor Bonds and to pay certain costs and expenses incurred in
connection with the Refinancing.
UNDERWRITING
Subject to the terms and conditions of the Underwriting
Agreement among the Company, Funding Corporation and the
Underwriters, the Underwriters named below have severally agreed
to purchase from Funding Corporation, and Funding Corporation has
agreed to sell to the Underwriters, severally, the respective
principal amounts of the Collateral Bonds set forth below.
Principal Principal
Amount Amount
of Series of Series
Collateral Collateral
Name Bonds Bonds
____ ----------- ------------
Morgan Stanley & Co. $ $
Incorporated
Citicorp Securities, Inc. ----------- ------------
Total =========== ============
The Underwriting Agreement provides that the several
obligations of the Underwriters thereunder are subject to the
approval of certain legal matters by counsel and to various other
conditions. The nature of the Underwriters' obligations is such
that they are committed to purchase all of the Collateral Bonds
if any are purchased; provided that the Underwriting Agreement
provides that under certain circumstances involving a default of
Underwriters, less than all of the Collateral Bonds may be
purchased.
The Company has been advised by the several Underwriters that
the Underwriters propose to offer the Series Collateral Bonds
and the Series Collateral Bonds directly to the public at the
public offering prices set forth on the cover page of this
Prospectus Supplement and to certain dealers at such prices less
a concession of % of the principal amount of the Series
Collateral Bonds and % of the principal amount of the
Series Collateral Bonds. The Underwriters may allow, and
such dealers may re-allow, a concession not in excess of % of
the principal amount of the Series Collateral Bonds and %
of the principal amount of the Series Collateral Bonds to
certain other dealers. After the initial public offering, the
offering prices and other selling terms may be changed.
The Underwriting Agreement provides that, subject to certain
conditions, the Company will indemnify each Underwriter and its
controlling persons against certain liabilities, including
certain liabilities under the Securities Act of 1933, as amended,
and will contribute to payments the Underwriters may be required
to make in respect thereof.
The Company does not intend to apply for listing of the
Collateral Bonds on a national securities exchange but has been
advised by the Underwriters that the Underwriters presently
intend to make a market in the Collateral Bonds, as permitted by
applicable laws and regulations. The Underwriters are not
obligated, however, to make a market in the Collateral Bonds, and
such market making may be discontinued at any time at the sole
discretion of each Underwriter. Accordingly, no assurance can be
given as to the liquidity of, or trading markets for, the
Collateral Bonds.
From time to time, the Underwriters and/or certain of their
affiliates engage in transactions with or perform services for
the Company in the ordinary course of business. In addition, an
affiliate of Citicorp Securities, Inc. is the Owner Participant.
PROSPECTUS
Subject to Completion
Dated __________, 1996
$322,526,000
Waterford 3 Secured Lease Obligation Bonds
The Waterford 3 Secured Lease Obligation Bonds (the
"Collateral Bonds") will be issued at one time
or from time to time, in one or more series, at prices and on
terms to be determined at the
time of sale. The Collateral Bonds will be indirectly
secured, as described herein, by
liens on, and security interests in, certain ownership
interests in, and by the Leases
relating to, Unit No. 3 (nuclear) of the Waterford Steam
Electric Generating Station
("Waterford 3") and will be payable solely from basic rentals
and
certain other amounts payable under such Leases by
Entergy Louisiana, Inc.
The Collateral Bonds will be issued by W3A Funding Corporation
("Funding Corporation"), a corporation created for the sole
purpose of issuing the Collateral Bonds as described herein.
Entergy Louisiana, Inc. (formerly Louisiana Power & Light
Company) (the "Company"), as Lessee under each Lease, will be
unconditionally obligated to make rental payments in amounts
which will be at least sufficient to pay in full, when due,
all scheduled payments of principal of and interest on the
Collateral Bonds, although
the Collateral Bonds will not be direct obligations of, or
guaranteed by, the Company.
This Prospectus will be supplemented by a prospectus
supplement (the "Prospectus
Supplement") which will set forth, as applicable, the
designation, the aggregate
principal amount, rate and time of payment of interest,
maturity, purchase
price, initial public offering price, if any, any
redemption or
installment payment provisions and other specific terms of
each
series of the Collateral Bonds in respect of which
this Prospectus is being delivered.
The Collateral Bonds will be secured by a pledge and
assignment of certain nonrecourse Lessor Bonds
("Pledged Lessor Bonds") issued by the Lessors under the Lease
Indentures described herein.
Each Pledged Lessor Bond will be secured by a lien on and
security interest in the undivided
ownership interest in Waterford 3 of the Lessor which has
issued such Pledged Lessor
Bonds and certain of the rights of such Lessor under its Lease
with the Company,
including the right to receive the basic rentals and certain
other amounts
payable by the Company thereunder. (See "Security and Source
of
Payment for the Collateral Bonds," "Description of the
Collateral Bonds
and the Indenture," "Description of the Lease Indentures"
and "Description of the Leases.")
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Collateral Bonds will be sold through an underwriting
syndicate including Morgan Stanley & Co. Incorporated and
Citicorp Securities, Inc. as set forth in the Prospectus
Supplement.
The net proceeds from the sale of the Collateral Bonds, and
any applicable
commissions or discounts, are set forth in the applicable
Prospectus
Supplement. This Prospectus may not be used to consummate
sales
of the Collateral Bonds unless accompanied by
the Prospectus Supplement.
MORGAN STANLEY & CO. Incorporated CITICORP SECURITIES, INC.
, 199_
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-
ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE
MARKET PRICE OF THE SECURITIES OFFERED HEREBY OR ANY OTHER
SECURITIES OF THE COMPANY AT LEVELS ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), and
in accordance therewith files reports and other information with
the Securities and Exchange Commission ("SEC"). Such reports
include information, as of particular dates, concerning the
Company's directors and officers, their remuneration, the
principal holders of the Company's securities and any material
interest of such persons in transactions with the Company. Such
reports and other information can be inspected and copied at the
public reference facilities maintained by the SEC at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549; 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and Seven World
Trade Center, 13th floor, New York, New York 10048. Copies of
this material can also be obtained at prescribed rates from the
Public Reference Section of the SEC at its principal office at
450 Fifth Street, N.W., Washington, D.C. 20549. The Company's
series of 12.64% Preferred Stock and 9.68% Preferred Stock are
listed on the New York Stock Exchange. Reports and other
information concerning the Company can be inspected and copied at
the office of such Exchange at 20 Broad Street, New York, New
York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended
December 31, 1995, the Company's Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1996, June 30, 1996 and
September 30, 1996 and the Company's Form 8-K dated September 6,
1996, each filed with the SEC pursuant to the Exchange Act, are
incorporated in this Prospectus by reference. In addition, all
documents subsequently filed by the Company pursuant to Section
13, 14 or 15(d) of the Exchange Act prior to the termination of
this offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing
of such documents (such documents, and the documents enumerated
above, being herein referred to as "Incorporated Documents").
Any statement contained herein or in an Incorporated Document
shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained in any other
subsequently filed Incorporated Document or in an accompanying
Prospectus Supplement modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this
Prospectus.
The Company hereby undertakes to provide without charge to each
person, including any beneficial owner, to whom a copy of this
Prospectus has been delivered, on the written or oral request of
any such person, a copy of any or all of the Incorporated
Documents, other than exhibits to such documents, unless such
exhibits are specifically incorporated by reference therein.
Requests should be directed to Christopher T. Screen, P.O. Box
61000, New Orleans, Louisiana 70161, telephone number 504-
576-4212. The information relating to the Company contained in
this Prospectus and any accompanying Prospectus Supplement does
not purport to be comprehensive and should be read together with
the information contained in the Incorporated Documents.
No person has been authorized to give any information or to
make any representation not contained in this Prospectus or, with
respect to any series of the Collateral Bonds, the Prospectus
Supplement relating thereto, and, if given or made, such
information or representation must not be relied upon as having
been authorized by the Company or any underwriter. This
Prospectus and any Prospectus Supplement do not constitute an
offer to sell or a solicitation of an offer to buy any of the
securities offered hereby in any jurisdiction to any person to
whom it is unlawful to make such offer in such jurisdiction.
Neither the delivery of this Prospectus and a Prospectus
Supplement nor any sale made thereunder shall, under any
circumstances, create any implication that there has been no
change in the affairs of the Company since the date of that
Prospectus Supplement.
THE COMPANY
Entergy Louisiana, Inc. (formerly Louisiana Power & Light
Company) was incorporated under the laws of the State of
Louisiana on October 15, 1974 and is the successor by merger to a
predecessor Louisiana Power & Light Company, which was
incorporated under the laws of the State of Florida in 1927. The
merger became effective on February 28, 1975. The Company's
principal executive offices are located at 639 Loyola Avenue, New
Orleans, Louisiana 70113. Its telephone number is (504)
576-4000.
The Company is an electric public utility company with all of
its operations in the State of Louisiana. All of the outstanding
common stock of the Company is owned by Entergy Corporation
("Entergy"), a Delaware corporation. Entergy is a registered
public utility holding company under the Public Utility Holding
Company Act of 1935, as amended. The Company, Entergy Arkansas,
Inc., Entergy Gulf States, Inc., Entergy Mississippi Inc. and
Entergy New Orleans, Inc. are the principal operating electric
utility subsidiaries of Entergy. Other Entergy subsidiaries
include System Energy Resources, Inc., a generating company,
Entergy Services, Inc., a service company, Entergy Operations,
Inc., a nuclear management services company, CitiPower Ltd., a
retail electric distribution company servicing Melbourne,
Australia and surrounding suburbs, Entergy Power, Inc., a
wholesale power company, and Entergy Enterprises, Inc., a non-
utility company.
The Company, Entergy Arkansas, Inc., Entergy Mississippi Inc.
and Entergy New Orleans, Inc. own all of the capital stock of
System Fuels, Inc., a special purpose company which implements
and/or maintains certain programs for the procurement, delivery
and storage of fuel supplies for certain Entergy subsidiaries,
including the Company.
The foregoing information relating to the Company does not
purport to be comprehensive and should be read together with the
financial statements and other information contained in the
Incorporated Documents.
USE OF PROCEEDS
Unless the accompanying Prospectus Supplement provides
otherwise, the proceeds of the sale of the Collateral Bonds will
be used to make loans to the Lessors, to be evidenced by the
Pledged Lessor Bonds, in amounts sufficient, together with
amounts made available to the Lessors by the Company as rent
under the related Leases, to enable the Lessors to redeem all the
outstanding Initial Lessor Bonds and to pay certain costs and
expenses incurred in connection with the Refinancing.
RATIOS OF EARNINGS TO FIXED CHARGES
The Company has calculated ratios of earnings to fixed charges
pursuant to Item 503 of SEC Regulation S-K as follows:
Twelve Months Ended
December 31, September 30,
1991 1992 1993 1994 1995 1996
2.40 2.79 3.06 2.91 3.18 3.13*
Ratio of Earnings to
Fixed Charges ......
________________
* Includes distributions on Company-obligated mandatorily
redeemable preferred securities of $1.3 million.
THE TRANSACTIONS AND THE REFINANCING
On September 28, 1989, the Company sold, for an aggregate
purchase price of $353,600,000, and leased back, on a long-term
net lease basis, three undivided portions of its 100% ownership
interest in Unit 3 in three substantially identical, but entirely
separate, Transactions, each such Transaction being documented
separately. Such Undivided Interests, which represent, in the
aggregate, approximately a 10.5% interest in Unit 3 (which is
equivalent on a cost basis to approximately a 9.3% interest in
Waterford 3), were sold to First National Bank of Commerce, New
Orleans, Louisiana, as Owner Trustee under each of three separate
trust agreements (each such agreement with an institutional
investor as an Owner Participant) and as Lessor under each of
three separate leases with the Company. Unit 3 excludes certain
transmission, pollution control and other facilities included in
Waterford 3. At the end of the terms of the Leases and assuming
the Company does not exercise any of its purchase options under
any Lease, the Lessors, together, as owners of the Undivided
Interests, will be entitled to approximately 10.5% of the
capacity and energy produced by Waterford 3; prior to such time
such capacity and energy remain available to the Company. After
the term of a Lease, any person (including a Lessor) other than
the Company which has possession of the related Undivided
Interest would be required to compensate the Company for the use
of certain of such excluded facilities, at such levels that the
sum of such compensation (discounted to present value, where
appropriate) and the fair market value of such Undivided
Interest, as of the end of the term of such Lease, would
approximate the fair market value, determined as of such time, of
an undivided ownership interest in Waterford 3 equal to such
person's entitlement share of the capacity of Waterford 3.
Approximately 87.7% of the aggregate consideration paid by the
Lessors for their respective interests in Unit 3 was provided to
the Lessors from the issuance and sale of the Waterford 3 Secured
Lease Obligation Bonds (the "Initial Lessor Bonds") in 1989. The
balance of such consideration was contributed to the Lessors by
the Owner Participant. As of September 30, 1996, the outstanding
Initial Lessor Bonds consist of (i) $77,840,000 aggregate
principal amount of 10.30% Series A due January 2, 2005,
$38,922,000 aggregate principal amount of 10.30% Series B due
January 2, 2005 and $20,861,000 aggregate principal amount of
10.30% Series C due January 2, 2005, and (ii) $95,896,000
aggregate principal amount of 10.67% Series A due January 2,
2017, $47,949,000 aggregate principal amount of 10.67% Series B
due January 2, 2017 and $25,700,000 aggregate principal amount of
10.67% Series C due January 2, 2017.
The Company has determined, in light of prevailing economic and
financial circumstances, to exercise its option pursuant to the
Participation Agreements to request the respective Lessors to
refinance the Initial Lessor Bonds which are currently
outstanding (the "Refinancing"). The Lessors will obtain the
funds required to redeem the Initial Lessor Bonds and to pay
related expenses from non-recourse borrowings by them from
Funding Corporation and from rent payments which the Company has
agreed to make under the Leases with such Lessors. The loans by
Funding Corporation to each Lessor will be evidenced by one or
more new series of Lessor Bonds (the "Pledged Lessor Bonds")
issued by such Lessor to Funding Corporation under the related
Lease Indenture. The Pledged Lessor Bonds of each Lessor will be
secured by, among other things, the basic rentals and certain
other payments which the Company is obligated to make under the
relevant Lease. Funding Corporation will obtain the funds to
enable it to make the loans to the Lessors through the offer and
sale of the Collateral Bonds. (See "Security and Source of
Payment for the Collateral Bonds" and "Use of Proceeds.")
FLOW OF FUNDS FOR DEBT SERVICE PAYMENTS ON THE COLLATERAL BONDS
ENTERGY LOUISIANA, INC.
(LESSEE)
|
| Rental Payments Due
| Under the Leases
| (Assigned by the
| Owner Trustees)
|
|
|
|
LEASE
INDENTURE ------------------------------
TRUSTEES |
| |
| |
| |
|Debt Service for | Rental Payments
| the Pledged Lessor | in excess of
| Bonds | Debt Service
| |
| |
| |
| |
| |
TRUSTEE FOR THE COLLATERAL BONDS |
(Issued by W3A Funding Corporation) |
| |
| |
| Debt Service for |
| the Collateral Bonds |
| |
| |
COLLATERAL BONDHOLDERS OWNER
TRUSTEES
(LESSORS)
|
|
|
|
|
| Rental Payments
| in Excess of
| Debt Service
|
|
|
|
OWNER
PARTICIPANT
See "Security and Source of Payment for the Collateral Bonds."
SECURITY AND SOURCE OF PAYMENT FOR THE COLLATERAL BONDS
Concurrently with the initial authentication and delivery of
the Collateral Bonds of each series, Funding Corporation will
cause to be delivered to the Trustee Pledged Lessor Bonds (a)
issued as separate series under the Lease Indentures, (b) payable
as to principal on such dates and in such amounts that on the
stated maturity of principal and each sinking fund redemption
date or principal installment payment date of such Collateral
Bonds there shall be payable on the Pledged Lessor Bonds an
amount in respect of principal equal to the principal amount of
such Collateral Bonds then to mature or to be payable in
installments of principal or be redeemed, (c) bearing interest at
the same rate and payable at the same times as the corresponding
Collateral Bonds of such series, (d) containing provisions for
redemption, including redemption premiums, correlative to the
provisions for redemption (other than pursuant to a sinking fund)
of the corresponding Collateral Bonds of such series and (e)
registered in the name of the Trustee. (Indenture, Section 2.03)
The Pledged Lessor Bonds, which will be without recourse to the
general credit of the related Owner Trustee and the Owner
Participant and will not be direct obligations of, or guaranteed
by, the Company, will be payable from and secured by, among other
things, a lien on and security interest in the related Undivided
Interest, and, subject to certain exceptions, the rights of the
Owner Trustee under the related Lease, including the right to
receive all basic rentals and certain other payments to be made
by the Company (subject in each case to certain permitted liens).
Excluded from the Lease Indenture Estate are any and all Excepted
Payments and certain other rights. The Leases provide that basic
rent payments to be made by the Company be calculated in such
amounts as will be sufficient to provide for the payment, when
due, of scheduled payments of principal of and interest on all of
the related Lessor Bonds. (See "Description of the Leases - Term
and Rentals.") Each Lease is a net lease pursuant to which the
Company will be unconditionally obligated to make all payments
thereunder. (See "Description of the Leases - Net Lease.") If a
Lease Event of Default shall have occurred and be continuing
under any Lease, remedies under such Lease may be exercised as
described in "Description of the Leases - Remedies."
If a Lease Indenture Event of Default shall have occurred and
be continuing, remedies may be exercised as described under
"Description of the Lease Indentures - Notice; Waiver;
Acceleration and Remedies." If a Lease Indenture Event of
Default shall have occurred and be continuing at a time when
there shall not have occurred and be continuing a Lease Event of
Default under the related Lease, the exercise of such remedies
may not disturb the Company's quiet use and possession of the
related Undivided Interest or require prepayment of basic rent,
Casualty Value or Special Casualty Value under such Lease.
In certain instances, the Company, or the Company and an
Affiliate thereof jointly, may elect or may be required to assume
the obligations of the Owner Trustee under the related Lease
Indenture and on all or a portion of the related Lessor Bonds
(see "Description of the Lease Indentures-Assumption by the
Company"). Upon such an assumption, the Owner Trustee would be
released from its obligations under such Lease Indenture and on
the related Lessor Bonds. In such case, the Holders of such
Lessor Bonds would retain the benefit under the related Lease
Indenture of the Lien on and security interest in the related
Undivided Interest, and the obligation to make payments on such
Lessor Bonds would become a direct obligation of the Company, or
the Company and an Affiliate thereof, as the case may be.
Subject to certain conditions, additional Collateral Bonds may
be issued under the Indenture (a) for the purpose of redeeming
all or any part of any series of Collateral Bonds previously
issued under such Indenture, including the Collateral Bonds
issued in connection with the Refinancing, and of providing funds
for the payment of certain expenses incurred in connection with
the issuance of such additional Securities and (b) to provide
funds for all or a portion of certain alterations, modifications,
additions or capital improvements to Unit 3, subject to certain
limitations. All additional Collateral Bonds issued under the
Indenture will be secured equally, together with the Collateral
Bonds issued in connection with the Refinancing, by all Lessor
Bonds pledged by Funding Corporation to the Trustee.
The Company has issued a series of first mortgage bonds under
its first mortgage bond indenture to secure the payment to the
Owner Participant of the equity portion of amounts payable by the
Company under the respective Leases and other transaction
documents. If prior to maturity of such first mortgage bonds,
there shall have occurred an Event of Loss, Deemed Loss Event,
Financial Event or Lease Event of Default in respect of which the
Lessee shall be obligated to prepay all or any portion of the
principal of the promissory note which was issued by the Company
to the Owner Participant as a condition to the issuance of the
Initial Lessor Bonds, then such first mortgage bonds shall be
redeemed, on the date such prepayment is to be made, in a
principal amount equal to the portion of the principal of the
promissory note then to be prepaid. Neither the holders of the
Lessor Bonds (including the Trustee, as holder of the Pledged
Lessor Bonds) nor the Holders of the Collateral Bonds are
entitled to the benefit of any such financial support. (See
"Other Agreements - Participation Agreement.")
If the Company were to enter into bankruptcy or reorganization
proceedings, the Company or its bankruptcy trustee could reject
any Lease. In such event, there could be no assurance that the
amount of any claim for damages under such Lease would be allowed
in amounts sufficient to provide for the repayment of the related
Collateral Bonds. Under Section 502(b)(6) of the United States
Bankruptcy Code, as amended, a claim by a lessor for damages
resulting from the rejection of a lease of real property in
connection with bankruptcy proceedings affecting the lessee may
be limited to an amount equal to the rent reserved under the
lease, without acceleration, for the greater of 1 year or 15
percent (but not more than 3 years) of the remaining term of the
lease, plus rent already due but unpaid. Although there can be
no assurances, Louisiana counsel to the Company believes that it
is likely that a bankruptcy court would find much of the property
covered by the Leases to be real property. If such property were
held to constitute personal property, the above limitation would
not apply. In any case, rejection of any Lease by the Company or
its bankruptcy trustee would not deprive the related Indenture
Trustee of its lien on and security interest in the related
Undivided Interest. Rejection of any Lease would deprive the
Company of the benefit of the related Undivided Interest and any
revenues which could be derived from the sale of the output
thereof.
If the Owner Participant or any Lessor becomes subject to
bankruptcy or reorganization proceedings and, by reason of such
proceedings, the Owner Participant or any Lessor is held to have
recourse liability to the Holder of any Lessor Bond or the
related Lease Indenture Trustee, and such Holder or the related
Lease Indenture Trustee actually receives payment on account of
such recourse liability, such Holder or the Indenture Trustee, as
the case may be, shall promptly refund to the Owner Participant
or any Lessor, as appropriate, any amount of such payment which
exceeds the amount which would have been received on or prior to
the date of such payment by such Holder or the Indenture Trustee
if the Owner Participant or the Lessor had not become subject to
such recourse liability. (Participation Agreement, Section 20(f))
For further information with respect to the source of payment
for the Collateral Bonds, the Indenture and the Lease Indentures
relating to the Lessor Bonds, see "Description of the Collateral
Bonds and the Indenture" and "Description of the Lease
Indentures."
W3A FUNDING CORPORATION
Funding Corporation was incorporated under the laws of the
state of Delaware for the purpose of facilitating the Refinancing
and has only nominal equity capital. The only business of
Funding Corporation will be the issuance and sale of the
Collateral Bonds and the lending of the proceeds therefrom. (See
"Use of Proceeds.") Funding Corporation may (but is not required
to) make loans in connection with any significant capital
improvements which may be installed at Unit 3 from time to time.
The assets of Funding Corporation will consist of any Lessor
Bonds issued by the Lessors to Funding Corporation from time to
time and $1,000 in cash, representing the equity capital
contributed by its sole shareholder, NCR Holding, Inc., which is
a wholly-owned subsidiary of NCR Corporate Research, Ltd. None
of the Company, any Lessor or the Owner Participant holds any
ownership interest in Funding Corporation, NCR Holding, Inc. or
NCR Corporate Research, Ltd., and no person affiliated with the
Company, any Lessor or the Owner Participant is an officer,
director or employee of any such entity.
DESCRIPTION OF THE COLLATERAL BONDS AND THE INDENTURE
The statements contained under this caption are intended to
briefly summarize the Collateral Bonds; they do not purport to be
complete and are qualified in their entirety by reference to the
Indenture, a copy of the form of which has been filed as an
exhibit to the Registration Statement of which this Prospectus is
a part. A Prospectus Supplement will describe the following
terms of the series of Collateral Bonds to be issued: (1) the
designation of each series of the Collateral Bonds; (2) the
aggregate principal amount of each series; (3) the date on which
each series will mature; (4) the rate at which each series will
bear interest and the date from which such interest accrues; (5)
the dates on which interest will be payable; and (6) the prices,
terms and conditions upon which each series may be redeemed by
the Company prior to maturity or upon which installment payments
of principal will become due and payable.
General
The Collateral Bonds are to be issued under the Collateral
Trust Indenture (the "Indenture") among Funding Corporation, the
Company and Bankers Trust Company, as Trustee, as supplemented by
one or more Supplemental Indentures, among such parties.
Unless otherwise indicated in a Prospectus Supplement, the
Collateral Bonds will be issued in fully registered form without
coupons in denominations of $1,000 or any integral multiple
thereof. Collateral Bonds may be surrendered for registration of
transfer or exchange for Collateral Bonds of the same series and
maturity at the corporate trust office of Bankers Trust Company,
registrar and paying agent for the Collateral Bonds, in New York,
New York. The Trustee shall not be required to register the
transfer or exchange of any Collateral Bonds called for
redemption or during a period of 15 days preceding a mailing of
notice of redemption. No service charge will be required of any
Bondholder participating in any transfer or exchange of
Collateral Bonds in respect of such transfer or exchange, but,
with certain exceptions, payment may be required of any tax or
other governmental charges that may be imposed in connection
therewith. (Indenture, Sections 2.05 and 2.08)
Additional Securities
The Indenture provides that the aggregate principal amount of
Securities (including the Collateral Bonds) which may be issued
thereunder is unlimited, provided that at least an equal
aggregate principal amount of Lessor Bonds must be pledged as
security under the Indenture in support of the payment of such
Securities. A separate Supplemental Indenture will be entered
into among Funding Corporation, the Company and the Trustee
establishing the designation, interest rate, sinking fund,
installment payments of principal and redemption provisions, if
any, and other specific terms of any particular series of
Securities. (Indenture, Section 2.03) Any additional series of
Securities will be secured pari passu with the Collateral Bonds
by the Pledged Lessor Bonds. (Indenture, Granting Clauses)
Merger, Consolidation and Transfer of Assets by Funding
Corporation
The certificate of incorporation of Funding Corporation
provides that Funding Corporation will not (a) dissolve or
liquidate, in whole or in part, or (b) merge into or consolidate
with, or sell all or any part of its assets to, any person, firm,
corporation, partnership or other entity unless the acquiring
entity or the surviving corporation, as the case may be, has a
certificate of incorporation containing provisions identical to
those of Funding Corporation's certificate of incorporation
restricting the nature of its business and purposes and its
ability to take certain action and, in the case of a sale of
assets, the acquiring entity shall have assumed all the
liabilities and obligations of Funding Corporation. In addition,
Funding Corporation has agreed in the Indenture that it will not
amend those provisions of its certificate of incorporation that
restrict the nature of its business, purposes and activities and
that provide for its capitalization. (Indenture, Section 5.08)
Events of Default
The following will be Events of Default under the Indenture:
(a) failure to pay any interest on any Security when it
becomes due and payable, and the continuation of such failure
for a period of 10 days; or
(b) failure to pay any principal of or premium, if any, on
any Security when it becomes due and payable, whether at its
stated maturity of principal, on any applicable redemption date
or any principal installment payment date or at any other time,
and the continuation of such failure for a period of 10 days;
or
(c) failure on the part of either Funding Corporation or the
Company to perform or observe any covenant or agreement in the
Indenture to be performed or observed by it, and the
continuation of such failure for a period of 30 days after
notice has been given to Funding Corporation or the Company, as
the case may be, by the Trustee, or to the Company or Funding
Corporation, as the case may be, and the Trustee by the Holders
of at least 25% in principal amount of the outstanding
Securities, specifying such failure and requiring it to be
remedied and stating that such notice is a "Notice of Default"
under the Indenture; provided, however, that the continuation
of such failure for a period of 30 days or more after such
notice has been so given (but in no event for a period which is
greater than one year after such notice has been given) shall
not constitute an Event of Default if (i) such failure can be
remedied but cannot be remedied within such 30 days; (ii) the
Company or Funding Corporation, as the case may be, is diligent
in pursuing a remedy of such failure and (iii) such failure
does not impair in any respect the lien and security interest
created by the Indenture; or
(d) the occurrence of any Lease Indenture Event of Default;
or
(e) the entry of a decree or order by a court having
jurisdiction in the premises adjudging Funding Corporation a
bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or
composition of or in respect of Funding Corporation under the
U.S. Bankruptcy Code or any other applicable federal or state
law or law of the District of Columbia, or appointing a
receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of Funding Corporation or of any substantial
part of its property, or ordering the winding up or liquidation
of its affairs, and the continuation of any such decree or
order unstayed and in effect for a period of 75 consecutive
days; or
(f) the institution by Funding Corporation of proceedings to
be adjudicated a bankrupt or insolvent, or the consent by the
institution of bankruptcy of insolvency proceedings against it,
or the filing by it of a petition or answer or consent seeking
reorganization or relief under the United States Bankruptcy
Code or any other applicable federal or state law or law of the
District of Columbia, or the consent by it to the filing of any
such petition or the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of
Funding Corporation or of any substantial part of its property,
or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability
to pay its debts generally as they become due, or the taking of
corporate action by Funding Corporation in furtherance of any
such action.
(Indenture, Section 8.01)
The Company and Funding Corporation must file an annual
certificate with the Trustee as to compliance with the provisions
of the Indenture. (Indenture, Section 5.09)
Funding Corporation has agreed in the Indenture that it will
not take certain corporate action which could result in its being
declared bankrupt or insolvent. (Indenture, Section 5.08) The
Company, the Lessors, the Owner Participant and the Lease
Indenture Trustees have each agreed in the Participation
Agreements that none of them will file, or participate in the
filing of, a petition seeking reorganization, arrangement,
adjustment, or composition of or in respect of Funding
Corporation prior to the 181st day following the payment in full
of the Collateral Bonds and discharge of the Indenture.
(Participation Agreement, Sections 6(b), 7(b), 8(b) and 9(b))
Acceleration and Remedies
Upon the occurrence and continuance of an Event of Default,
(i) if such Event of Default is of the type specified in clause
(a), (b), (c), (e) or (f) of the first paragraph under "Events of
Default" above, the Trustee may and, upon the direction of the
Holders of not less than a majority in principal amount of the
Securities outstanding the Trustee shall, and (ii) if such Event
of Default is of the type specified in clause (d) of the first
paragraph under "Events of Default" above (including without
limitation a Lease Event of Default which has resulted in a
default of the type specified in clause (a) or (b) of such
paragraph) under circumstances in which there has been an
acceleration of a maturity of the related Pledged Lessor Bonds,
the Trustee shall, declare all the Securities to be immediately
due and payable; provided that no such declaration will be made
(and the Trustee will not take action to sell any property
pledged to it under the Indenture or to institute proceedings for
payment on any Securities or Pledged Lessor Bonds) in the case of
a payment default of the type specified in clause (a) or (b) of
such paragraph which resulted directly from a failure by the
Company to make any payment of rent under a Lease until such time
as the Lessor under such Lease has been given the opportunity to
exercise its rights, if any, to cure such default under the
related Lease Indenture. (See "Description of the Lease
Indentures - Rights of Lessor to Cure and Purchase Lessor
Bonds.") (Indenture, Section 8.02)
In addition, upon the occurrence of a Lease Indenture Event
of Default, Lease Indenture Default, Event of Loss, Deemed Loss
Event or Financial Event, if an officer of the Trustee has actual
knowledge thereof, the Trustee will give notice to all Holders of
such fact in accordance with the provisions of the Indenture and
thereafter each Holder will have the right to direct the Trustee,
as the holder of the Pledged Lessor Bonds issued under such Lease
Indenture, to vote the principal amount of such Pledged Lessor
Bonds in proportion to the principal amount of Securities owned
by such Holder, or to direct the related Lease Indenture Trustee
to take such action, or refrain from taking such action, as it is
permitted to take under the terms of the related Lease Indenture.
Under each Lease Indenture, directions given to the Lease
Indenture Trustee as described in the preceding sentence will be
dictated by (x) in the case of a Lease Indenture Event of Default
or a Lease Indenture Default, the holders of no less than a
majority in aggregate principal amount of the outstanding Lessor
Bonds of all series (considered as one class) and (y) in the case
of an Event of Loss, Deemed Loss Event or Financial Event, the
holders of not less than 5% in aggregate principal amount of the
outstanding Lessor Bonds of all series (considered as one class),
which, in either case, will mean, until such time, if any, as
additional Lessor Bonds are issued under such Lease Indenture,
the Holders of not less than a majority or 5% respectively in
aggregate principal amount of the Collateral Bonds outstanding as
a result of the pass-through voting mechanism described above.
(Indenture, Section 3.03; Lease Indenture, Sections 2.16 and
7.07)
With certain exceptions, the request of the Holders of not
less than a majority in aggregate principal amount of Securities
outstanding will be necessary to require the Trustee to exercise
any remedy under the Indenture. (Indenture, Section 8.07) The
Trustee will be entitled to receive reasonable indemnity and
under certain circumstances is not required to act. (Indenture,
Section 9.03) In addition, no Holder shall have any right to
pursue any remedy under the Indenture unless the Trustee shall
have been given written notice of an Event of Default, the
Holders of at least 25% in principal amount of all Securities
then outstanding shall have requested the Trustee to pursue a
remedy, the Trustee shall have been offered satisfactory
indemnity, the Trustee shall have failed to comply with such
request within 60 days after receipt of such request and the
Trustee shall not have received during such 60 day period any
direction inconsistent with such request from Holders of a
majority in principal amount of outstanding Securities.
(Indenture, Section 8.09)
Voting of Lessor Bonds
The Trustee, as holder of the Pledged Lessor Bonds, will have
the right to vote and give consents and waivers in respect of
such Pledged Lessor Bonds and the Lease Indentures only as
described below. The Holders of the Securities may instruct the
Trustee as to action by the Trustee, as holder of the Pledged
Lessor Bonds, under any Lease Indenture, including the voting of
Pledged Lessor Bonds. Upon receiving from Holders any directions
as to the taking of any action, including the voting of any
Pledged Lessor Bond, the Trustee shall specify to the related
Lease Indenture Trustee the principal amount of the Pledged
Lessor Bonds which is in favor of the action or vote, the
principal amount of the Pledged Lessor Bonds which is opposed to
the action or vote and the principal amount of the Pledged Lessor
Bonds which is not taking any position as to the action or vote.
Such principal amounts shall be determined by allocating to the
total principal amounts of the Pledged Lessor Bonds with respect
to which direction is to be given the proportionate principal
amount of Securities taking corresponding positions or not taking
any position, based on the aggregate principal amount of
outstanding Securities. (Indenture, Section 3.03) Because the
Lease Indentures permit additional Lessor Bonds to be issued and
secured thereunder, and do not require that such additional
Lessor Bonds be issued only to Funding Corporation, it is
possible that at some future time the Pledged Lessor Bonds would
not constitute a majority of the Lessor Bonds issued and
outstanding under the Lease Indentures. (See "Description of the
Lease Indentures - Additional Lessor Bonds.")
Supplemental Indenture
Without the consent of the Holders of any Securities, Funding
Corporation, the Company and the Trustee may enter into
supplemental indentures for the following purposes:
(a) to establish the form and terms of any series of
Securities;
(b) to evidence the succession of another corporation to the
Company, and the assumption by any such successor of the
covenants of the Company contained in the Indenture, or to
evidence the succession of another corporation to Funding
Corporation, and the assumption by any such successor of the
covenants of Funding Corporation contained in the Indenture and
in the Securities;
(c) to evidence the succession of a new trustee or the
appointment of a co-trustee or a separate trustee under the
Indenture;
(d) to add to the covenants of Funding Corporation or of the
Company, for the benefit of the Holders of the Securities, or
to evidence the surrender of any right or power conferred in
the Indenture upon Funding Corporation or the Company;
(e) to convey, transfer and assign to the Trustee, and to
subject to the lien of the Indenture, additional Pledged Lessor
Bonds or additional properties or assets, and to correct or
amplify the description of any property at any time subject to
the lien of the Indenture or to assure, convey and confirm unto
the Trustee any property subject or required to be subject to
the lien of the Indenture;
(f) to permit or facilitate the issuance of Securities in
uncertificated form;
(g) to change or eliminate any provision of the Indenture;
provided, however, that if such change or elimination will
adversely affect the interests of the Holders of Securities of
any series, such change or elimination will become effective
with respect to such series only when no Security of such
series remains outstanding; or
(h) to cure any ambiguity, to correct or supplement any
provision in the Indenture which may be defective or
inconsistent with any other provision in the Indenture, or to
make any other provisions with respect to matters or questions
arising under the Indenture, provided such action shall not
adversely affect the interest of the Holders of the Securities
in any material respect.
Without limiting the generality of the foregoing, if the
Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), as in effect at the date of the execution and delivery of
the Indenture or at any time thereafter shall be amended and
(x) if any such amendment shall require one or more changes
to any provisions of the Indenture or the inclusion in the
Indenture of any additional provisions, or shall by operation
of law be deemed to effect such changes or incorporate such
provisions by reference or otherwise, or
(y) if any such amendment shall permit one or more changes
to, or the elimination of, any provisions of the Indenture
which, at the date of the execution and delivery of the
Indenture or at any time thereafter, are required by the Trust
Indenture Act to be contained in the Indenture or are contained
in the Indenture to reflect any provisions of the Trust
Indenture Act as in effect on such date,
the Indenture shall be deemed to have been amended to conform to
such amendment to the Trust Indenture Act or to effect such
changes or elimination, and Funding Corporation, the Company and
the Trustee may, without the consent of any Holders, enter into a
supplemental indenture to evidence such amendment. (Indenture,
Section 11.01)
With the consent of the Holders of not less than a majority
in aggregate principal amount of all Securities then outstanding
considered as one class, Funding Corporation, the Company and the
Trustee may enter into supplemental indentures for any purpose;
provided that if there is more than one series of Securities
outstanding and if a proposed supplemental indenture directly
affects the Holders of at least one, but not all, of such series,
then only the consent of a majority in aggregate principal amount
of the Holders of the directly affected series of Securities will
be required; and provided, further, that without the consent of
the Holders of all the Securities then outstanding directly
affected thereby no such supplemental indenture may:
(a) change the stated maturity of the principal of, or any
installment of interest on, or the maturity date of any
installment of principal of, or the dates or circumstances of
payment of premium, if any, on any Security or reduce the
principal amount of, or the interest on, or any premiums
payable upon any redemption of, any Security or change the
place of payment where, or the coin or currency in which, any
Security or the premium, if any, or interest thereon is
payable, or impair the right to institute suit for the
enforcement of any such payment of principal or interest on or
after the stated maturity thereof (or, in the case of
redemption, on or after the redemption date) or such payment of
premium, if any, on or after the date such premium becomes due
and payable or change the dates or amounts of payments to be
made through the operation of a sinking fund (if any) or
through installment payments of principal (if any) in respect
of such Securities;
(b) permit the creation of any lien prior or, except with
respect to additional Securities issued in accordance with the
Indenture, equal to the lien of the Indenture with respect to
any of the Pledged Lessor Bonds, terminate the lien of the
Indenture on the Pledged Lessor Bonds (except as permitted by
the Indenture) or deprive any Holder of the security afforded
by the Indenture;
(c) reduce the percentage in principal amount of the
Securities the consent of whose Holders is required for any
supplemental indenture or the consent of whose Holders is
required for any waiver provided for in the Indenture or reduce
the requirements of the Indenture relating to (1) a quorum for
meetings of Holders or (2) action taken by Holders pursuant to
the Indenture at meetings thereof; or
(d) modify any of the above provisions or the provisions of
the Indenture dealing with waivers of past defaults, except to
increase the percentage of the Holders whose consent is
required for certain action or to provide that certain other
provisions of the Indenture cannot be modified or waived
without the consent of the Holders affected thereby.
(Indenture, Section 11.02)
Without the consent of the Holders of any Securities, the
Trustee may join in the execution of amendments of or supplements
to, or waivers of the provisions of, any Participation Agreement.
(Indenture, Section 11.08)
Defeasance
Securities of any series, or any portion of the principal
amount thereof, will, prior to the maturity thereof, be deemed to
have been paid for purposes of the Indenture (except as to any
surviving rights of registration of transfer or exchange
expressly provided for in the Indenture), and the entire
indebtedness of Funding Corporation in respect thereof will be
deemed to have been satisfied and discharged, if (a) there shall
have been irrevocably deposited with the Trustee, in trust, money
in an amount which will be sufficient to pay when due the
principal of and premium, if any, and interest due and to become
due on such Securities or portions thereof on and prior to the
stated maturity of principal or redemption date or (b) the
Pledged Lessor Bonds of the corresponding series are deemed to
have been paid in accordance with the defeasance provisions of
the Lease Indenture or Lease Indentures under which such Pledged
Lessor Bonds were issued; provided, however, that such Securities
will not be deemed to have been satisfied and discharged unless,
among other things, there has been delivered to the Indenture
Trustee an opinion of counsel to the effect that such
satisfaction and discharge shall not be deemed to be, or result
in, a taxable event with respect to the Holders of such
Securities for purposes of federal income taxation, except that
no such opinion of counsel need be delivered if the Indenture
Trustee shall have received documentary evidence that each Holder
of such Securities either is not subject to, or is exempt from,
federal income taxation. (Indenture, Section 12.01) (See also
"Description of the Lease Indentures - Defeasance.")
The Trustee
Bankers Trust Company will act as Trustee under the
Indenture. As of the date of the issuance of the Collateral
Bonds, Bankers Trust Company will also be Lease Indenture Trustee
under each of the Lease Indentures entered into in connection
with the Transactions.
DESCRIPTION OF THE LEASE INDENTURES
The statements made under this caption are intended to
summarize the Lease Indentures as they relate to the Lessor
Bonds; they do not purport to be complete and are qualified in
their entirety by reference to the Lease Indentures, copies of
which have been filed as exhibits to the Registration Statement
of which this Prospectus is a part. Each Lease Indenture is an
entirely separate indenture but contains substantially the same
terms and provisions as each other Lease Indenture. Unless the
context requires otherwise, in the following summary references
to the Lease Indenture, the Lease Indenture Estate, the Lease,
the Lessor, the Owner Participant, the Owner Trustee, the Lessor
Bonds and the Pledged Lessor Bonds relate to each Lease
Indenture.
General
Lessor Bonds (including the Initial Lessor Bonds, Pledged
Lessor Bonds and other Lessor Bonds) may be issued under the
Lease Indentures. The Pledged Lessor Bonds will, at the
direction of Funding Corporation, be pledged and assigned to the
Trustee for the benefit of the Holders of the Securities
(including the Collateral Bonds).
Lease Indenture Events of Default
The following are Lease Indenture Events of Default:
(a) any Lease Event of Default described in the following
clauses of the first paragraph in "Description of the Leases -
Lease Events of Default": (i) clause (a)(x), except a failure of
the Company to pay an amount which constitutes an Excepted
Payment or except in the case of a default in the payment of
Casualty Value, Special Casualty Value, or the payment of the
equity portion of Casualty Value or Special Casualty Value, where
the Owner Trustee has not rescinded or terminated the Lease or
(ii) clause (e) or (g);
(b) the rescission or termination of, or the taking of action
by the Owner Trustee or the Owner Participant, the effect of
which would be to rescind or terminate, the Lease;
(c) the exercise by the Owner Trustee or the Owner Participant
of certain remedies under the Lease, as a result of which the
Company would be obligated to pay liquidated damages, prior to
the occurrence of any of the events set forth in clause (b)
above;
(d) any assignment, sublease or transfer by the Company of the
Lease and the other transaction documents in violation of the
terms thereof;
(e) breach by the Company of the provisions of the related
Participation Agreement relating to the maintenance of its
corporate existence and relating to a merger by the Company into
or consolidation of the Company with another entity or the sale
or transfer of all or substantially all of the Company's assets
by the Company (see "Other Agreements - Participation
Agreement");
(f) (x) failure by the Owner Trustee to make any payment in
respect of the principal of or premium, if any, or interest on
the Lessor Bonds within five business days after the same shall
have become due (other than by virtue of any failure by the
Company to make any payment of rent therefor); or (y) following
the actual receipt by the Owner Participant of proceeds of a
partial draw upon a letter of credit in excess of the amounts due
to the Owner Participant at the time of such partial draw,
failure of such Owner Participant to cause such excess proceeds
to be delivered to the Lease Indenture Trustee within five
business days after the actual receipt of such proceeds;
(g) (x) failure by the Owner Trustee to perform or observe any
covenant or agreement in the Lease Indenture to be performed or
observed by it (other than any failure by the Owner Trustee to
pay or cause to be paid any payment of the principal of or
premium, if any, or interest on the Lessor Bonds when due), or
(y) failure by the Owner Participant to observe its covenant in
the Participation Agreement not to create certain liens on the
Lease Indenture Estate or the trust estate and, in either case,
the continuation of such failure for a period of 30 days after
notice thereof has been given to the Owner Trustee, the Owner
Participant and the Company by the Lease Indenture Trustee or to
the Lease Indenture Trustee, the Company, the Owner Trustee and
the Owner Participant by the Holders of at least 25% in aggregate
principal amount of the outstanding Lessor Bonds of all series,
considered as one class; provided, however, that the continuation
of such failure for a period of 30 days or more after such notice
has been so given (but in no event for a period which is greater
than one year after such notice has been given) shall not
constitute a Lease Indenture Event of Default if (i) such failure
can be remedied but cannot be remedied within such 30 days, (ii)
the Owner Trustee or the Owner Participant, as the case may be,
is diligently pursuing a remedy of such failure and (iii) such
failure does not impair in any material respect the mortgage and
security interest created by the Lease Indenture;
(h) any representation or warranty made by the Owner Trustee
in the Participation Agreement, or any representation or warranty
made by the Owner Participant in the Participation Agreement
concerning liens against the trust estate or the Lease Indenture
Estate as a result of claims against the Owner Participant
unrelated to the Transactions shall prove to have been incorrect
in any material respect when such representation or warranty was
made or given and remains materially incorrect at the time of
discovery; provided, however, that such failure of such
representation or warranty to be correct shall not constitute a
Lease Indenture Event of Default if (i) the facts or
circumstances making such representation or warranty incorrect
can be remedied or changed so that such representation or
warranty will henceforth be correct in all material respects,
(ii) the Owner Trustee or the Owner Participant, as the case may
be, is diligently pursuing such a remedy or change, (iii) such
remedy or change is, in fact, accomplished within a period of one
year from the time that the Owner Trustee or the Owner
Participant, as the case may be, has been notified of such
misrepresentation or breach of warranty and (iv) such facts or
circumstances do not impair in any material respect the mortgage
and security interest created by the Lease Indenture;
(i) (x) the Owner Trustee shall file any petition for
dissolution or liquidation of the trust created by the trust
agreement or shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or subsequently
in effect, or the Owner Trustee shall have consented to the entry
of an order for relief with respect to the trust in an
involuntary case under any such law, or a receiver, custodian or
trustee (or other similar official) shall be appointed for the
Owner Trustee or shall take possession of any substantial part of
its property (other than at the instance of the Lease Indenture
Trustee or the Holders of Lessor Bonds), or the Owner Trustee
shall make a general assignment for the benefit of the trust's
creditors, or shall enter into an agreement of composition with
the trust's creditors; or (y) there shall be filed (other than at
the instance of the Lease Indenture Trustee or the Holders of
Lessor Bonds) against the Owner Trustee an involuntary petition
in bankruptcy which results in an order for relief being entered
or, notwithstanding that an order for relief has not been
entered, the petition is not dismissed within 60 days after the
date of the filing of the petition, or there shall be filed
(other than at the instance of the Lease Indenture Trustee or the
Holders of Lessor Bonds) under any Federal or state law relating
to bankruptcy, insolvency or relief of debtors any petition
against the Owner Trustee for reorganization, composition,
extension or arrangement with creditors which either (i) results
in a finding or adjudication of insolvency of the Owner Trustee
or (ii) is not dismissed within 60 days after the date of the
filing of such petition;
(j) (x) the Owner Participant shall file any petition for
dissolution or liquidation of the Owner Participant, or shall
commence a voluntary case, under any applicable bankruptcy,
insolvency or other similar law now or subsequently in effect, or
the Owner Participant shall have consented to the entry of an
order for relief in an involuntary case under any such law, or
shall fail generally to pay its debts as such debts become due
(within the meaning of the United States Bankruptcy Code, as
amended), or a receiver, custodian or trustee (or other similar
official) shall be appointed for the Owner Participant or shall
take possession of any substantial part of its property, or the
Owner Participant shall make a general assignment for the benefit
of its creditors, or shall enter into an agreement of composition
with its creditors; or (y) there shall be filed against the Owner
Participant an involuntary petition in bankruptcy which results
in an order for relief being entered or, notwithstanding that an
order for relief has not been entered, the petition is not
dismissed within 60 days after the date of the filing of the
petition, or there shall be filed under any Federal or state law
relating to bankruptcy, insolvency or relief of debtors any
petition against the Owner Participant for reorganization,
composition, extension or arrangement with creditors which either
(i) results in a finding or adjudication of insolvency of the
Owner Participant or (ii) is not dismissed within 60 days after
the filing of such petition and any such event materially
adversely affects the Holders of the Lessor Bonds; or
(k) after a Special Transfer has been effected and amounts
payable to the Owner Participant have been paid in full in
accordance with the Participation Agreement, any violation or
breach of any covenant of the Company concerning the Company's
continuing obligation to pay rent under the Lease or concerning
its obligation to effectuate and evidence an assumption as
described in "Description of the Lease Indentures-Assumption by
the Company."
(Lease Indenture, Section 7.01)
Notice; Waiver; Acceleration and Remedies
The Lease Indenture Trustee, if it has knowledge of any Lease
Indenture Default or Lease Indenture Event of Default, is
required to give notice thereof (unless such Lease Indenture
Default or Lease Indenture Event of Default shall have been
waived or cured) within 90 days thereof in writing to the Holders
of the outstanding Lessor Bonds of all series, the Owner Trustee,
the Owner Participant and the Company; provided that, except in
the case of a default in the payment of principal of or premium,
if any, or interest on any Lessor Bond, the Lease Indenture
Trustee will be protected in withholding such notice if in good
faith it determines that the withholding of such notice is in the
interest of the Holders; and provided, further, that in the case
of a Lease Indenture Event of Default specified in clause (g)
above, no such notice will be given until at least 30 days after
the occurrence thereof. In the event the Lease Indenture Trustee
has knowledge of an Event of Loss, Deemed Loss Event or Financial
Event, the Lease Indenture Trustee shall give prompt notice
thereof, and in any event, within 90 days after occurrence
thereof, to the Holders of the outstanding Lessor Bonds. (Lease
Indenture, Section 8.02) For all purposes of the Lease Indenture,
in the absence of actual knowledge of a Responsible Officer of
the Lease Indenture Trustee, the Lease Indenture Trustee will not
be deemed to have knowledge of any Lease Indenture Default or
Lease Indenture Event of Default (except the failure of the
Company to pay any installment of basic rent within 5 business
days after the same has become due) unless notified thereof in
writing by any Holder, the Owner Trustee, the Owner Participant
or the Company. (Lease Indenture, Section 8.03)
The Holders of a majority in aggregate principal amount of the
outstanding Lessor Bonds of all series, considered as one class,
may on behalf of the Holders of all Lessor Bonds of all series
waive any past Lease Indenture Default or Lease Indenture Event
of Default and its consequences, except that only the Holders of
all Lessor Bonds affected thereby may waive a Lease Indenture
Default or Lease Indenture Event of Default (a) in the payment of
the principal of or premium, if any, or interest on such Lessor
Bonds, or (b) in respect of a covenant or other provision of the
Lease Indenture which under the Lease Indenture cannot be
modified or amended without the consent of the Holder of each
outstanding Lessor Bond affected. (Lease Indenture, Section
7.09)
If a Lease Indenture Event of Default has occurred and is
continuing, the Lease Indenture Trustee may, and upon the written
request of, and the proffering of satisfactory indemnity by, the
Holders of a majority in aggregate principal amount of the
outstanding Lessor Bonds of all series, considered as one class,
shall, declare the unpaid principal amount of all outstanding
Lessor Bonds, with accrued interest thereon, to be immediately
due and payable, but the Lease Indenture Trustee shall not make
any such declaration in the case of a Lease Indenture Event of
Default which resulted from a failure by the Company to make a
payment of rent under the Lease until the Owner Trustee and the
Owner Participant have been given an opportunity to cure such
default as described below under "Rights of Lessor to Cure and
Purchase Lessor Bonds." (Lease Indenture, Sections 7.02, 7.16 and
8.03)
Upon the occurrence and during the continuance of a Lease
Indenture Event of Default, the Lease Indenture Trustee may, and
upon the written request of, and the proffering of satisfactory
indemnity or security by, the Holders of a majority in aggregate
principal amount of the outstanding Lessor Bonds of all series,
considered as one class, shall, subject to the Lessor's rights
described under the following two paragraphs and under "Rights of
Lessor to Cure and Purchase Lessor Bonds" below, exercise any or
all of the rights and remedies available to it under the Lease
Indenture and applicable law, including (a) the institution of
judicial proceedings, either at law or in equity or otherwise, to
protect its rights and those of the Holders under the Lease
Indenture or for foreclosure of the lien thereof and (b) the sale
in whole or in part of the Lease Indenture Estate. (Lease
Indenture, Sections 7.03 through 7.08 and Section 8.03) No
Holder shall have any right to pursue any remedy under the Lease
Indenture unless the Lease Indenture Trustee shall have been
given written notice of a Lease Indenture Event of Default, the
Holders of at least 25% in principal amount of all Lessor Bonds
then outstanding shall have requested the Lease Indenture Trustee
to pursue a remedy, the Lease Indenture Trustee shall have been
offered satisfactory indemnity, the Lease Indenture Trustee shall
have failed to comply with such request within 60 days after
receipt of such request and the Lease Indenture Trustee shall not
have received during such 60 day period any direction
inconsistent with such request from Holders of a majority in
principal amount of outstanding Lessor Bonds. (Lease Indenture,
Section 7.10)
Except in the case of Lease Indenture Events of Default (i)
described in clauses (f) through (k) under "Lease Indenture
Events of Default" above and (ii) occurring or continuing after a
Special Transfer, an assumption of the Lessor Bonds by the
Company as described below under "-Assumption by the Company" or
any of certain drawings upon a letter of credit, and except as
described in the next paragraph, the exercise of remedies against
the Company under the Lease will be controlled by the Owner
Trustee. In such circumstances, however, the Owner Trustee will
be required to consult with the Lease Indenture Trustee as to any
proposed exercise or pursuit of remedies and the Lease Indenture
Trustee will have the right to cause the Owner Trustee to forbear
from such action if the Lease Indenture Trustee has determined
that such action would have a material adverse effect on the
Holders of the Lessor Bonds. In addition, the Owner Trustee will
not exercise or pursue remedies in a manner which would
unreasonably deprive the Holders of the Lessor Bonds of a
material right or remedy unless the Owner Trustee is
commensurately adversely affected. There could be circumstances,
therefore, in which amounts due on the Lessor Bonds are not paid
and the Lease Indenture Trustee is not able to direct the Owner
Trustee's pursuit of remedies against the Company under the
Lease. (Lease Indenture, Sections 7.03 and 7.17)
Although, as described above, the exercise of remedies will
generally be within the control of the Owner Trustee, the Lease
Indenture Trustee will have the right to sell the Lease Indenture
Estate in foreclosure or similar proceedings. However, if such
sale occurs prior to or simultaneously with the termination of
the Lease, the Lease Indenture Trustee must have offered to sell
to the Owner Trustee the Lease Indenture Estate at a stated price
determined by the Lease Indenture Trustee. If the Owner Trustee
does not, within 60 days following receipt of such offer, elect
to so purchase the Lease Indenture Estate, the Lease Indenture
Trustee may foreclose and sell the Lease Indenture Estate within
180 days to any person (other than the Lease Indenture Trustee or
a Holder or Holders of more than 25% of the outstanding Lessor
Bonds (including, in each case, affiliates thereof) ) for not
less than such stated price. In the event of a sale by the Lease
Indenture Trustee pursuant to a foreclosure or similar proceeding
(other than a sale to the Owner Trustee), the Lease Indenture
Trustee will have the right to terminate the Lease in connection
with such sale subject, however, to the Company's rights under
the Lease. (See "Limitation on Remedies" below.) (Lease
Indenture, Section 7.17)
If a Lease Indenture Event of Default occurs and is continuing,
and the maturity of the Lessor Bonds has been accelerated, any
sums held or received by the Lease Indenture Trustee may be
applied to reimburse the Lease Indenture Trustee for any expense
(to the extent not previously reimbursed) incurred by it and to
pay its fees and any other amounts due it prior to any payments
to Holders of the Lessor Bonds. (Lease Indenture, Section 3.03)
In the event of a bankruptcy of the Owner Participant, it is
possible that, notwithstanding that the Undivided Interest is
owned by the Owner Trustee in trust, the Undivided Interest and
the related Lease and Pledged Lessor Bonds might become subject
to bankruptcy proceedings. In such event, payments under such
Lease or on such Pledged Lessor Bonds might be interrupted and
the ability of the Lease Indenture Trustee to exercise its
remedies under the Lease Indenture might be restricted, although
the Lease Indenture Trustee would retain its status as a secured
creditor in respect of the Lease and the Undivided Interest.
Rights of Lessor to Cure and Purchase Lessor Bonds
The Lease Indenture provides that a Lease Indenture Event of
Default is to be deemed cured if such Lease Indenture Event of
Default results from a non-payment of rent under the Lease and
the Owner Trustee or Owner Participant has paid all principal of
and interest on the Lessor Bonds due (other than by acceleration)
on the date such rent was payable within 15 days after receipt by
the Owner Trustee of notice of such nonpayment. However, such
right of the Owner Trustee or Owner Participant to cure the
non-payment of rent is limited to not more than six basic rent
payment dates or two consecutive basic rent payment dates during
the Lease term. (Lease Indenture, Section 7.16)
If a Lease Indenture Event of Default has occurred and is
continuing and (a) the Lessor Bonds have been accelerated and (b)
the Owner Trustee, within 30 days after receiving notice thereof
from the Lease Indenture Trustee, has given written notice to the
Lease Indenture Trustee of its intention to purchase all the
Lessor Bonds, then, upon receipt by the Lease Indenture Trustee
within 10 business days after such notice from the Owner Trustee
of an amount equal to the aggregate unpaid principal amount of
and interest on the Lessor Bonds then outstanding (as well as any
interest on overdue principal and, to the extent permitted by
law, overdue interest), each Holder of a Lessor Bond will be
required to sell such Lessor Bond, and its right, title and
interest in and to the Lease Indenture and the Lease Indenture
Estate, to the Owner Trustee. (Lease Indenture, Section 7.16)
Limitation on Remedies
Notwithstanding any other provision of the Lease Indenture, so
long as no Lease Event of Default has occurred and is continuing,
the Lease Indenture Trustee may not take or cause to be taken any
action (x) contrary to the Company's rights under the Lease,
including the right to quiet use, enjoyment and possession of the
Undivided Interest or (y) that would require prepayment of any
scheduled payment of rent thereunder. (Lease Indenture, Section
7.20)
Assumption by the Company
Under certain circumstances and subject to the satisfaction of
certain conditions, the Company, or the Company and an Affiliate
thereof jointly, may elect, or may be required, to assume the
obligations of the Owner Trustee under the Lease Indenture and on
all or a portion of the Lessor Bonds. Upon such assumption, the
Lease Indenture and the Lessor Bonds so assumed will become
direct obligations of the Company (and such Affiliate), the Lease
will terminate, the Undivided Interest of the Lessor in Unit 3
will be transferred to the Company (and/or any such Affiliate)
and the Owner Trustee will be released and discharged from all
further obligations and liabilities under the Lease Indenture and
on the Lessor Bonds so assumed. Although certain changes would be
made to the Lease Indenture to reflect the termination of the
Lease, the lien on and security interest in the Undivided
Interest created by the Lease Indenture would not be affected
thereby. (Lease Indenture, Section 2.16)
Upon the occurrence of an Event of Loss, Deemed Loss Event,
Financial Event or Lease Event of Default, the Owner Participant
can demand that the Company pay the excess of Casualty Value (in
the case of an Event of Loss or Lease Event of Default) or
Special Casualty Value (in the case of a Deemed Loss Event or
Financial Event, subject to certain exceptions) over the
principal of and accrued interest on the Lessor Bonds then
outstanding. (Participation Agreement, Sections 15 (a), (b) and
(c) and Section 16(a)) At the time of the issuance of the
Initial Lessor Bonds, the Company issued and delivered to the
Owner Participant a promissory note evidencing the Company's
obligation to pay such amounts. (Participation Agreement, Section
16(a)) In addition, upon the occurrence of any of such Events,
the Owner Participant can effect a Special Transfer of the
beneficial interest in the owner trust to the Company.
(Participation Agreement, Section 15(d))
If an Event of Loss, Deemed Loss Event or Financial Event has
occurred in respect of which the Owner Participant has demanded
payment as described above or in response to which a Special
Transfer has been effected, the Company, in order to effectuate
and evidence an assumption of the Owner Trustee's obligations
under the Lease Indenture and on the Lessor Bonds, may, and upon
the direction of the Lease Indenture Trustee (to be given at the
direction of the Holders of not less than 5% in aggregate
principal amount of the Lessor Bonds outstanding of all series,
considered as one class) or the Owner Trustee, shall promptly,
commence and diligently pursue all steps requisite to deliver to
the Lease Indenture Trustee, among other things, (a) a duly
executed assumption agreement of the Company (and, if applicable,
any of its Affiliates), (b) an opinion of counsel as to, among
other things, compliance with the conditions of the assumption
(including the obtainment of any necessary governmental actions),
(c) an indenture supplemental to the Lease Indenture that, among
other things, confirms the release of the Owner Trustee and
contains provisions amending the Lease Indenture to delete
references to the Lease and to reflect the fact that the
obligations of the Owner Trustee have been assumed by the Company
(and, if applicable, such Affiliate), (d) a certificate of
responsible officers of the Company (and, if applicable, such
Affiliate) to the effect that (i) to the best of such officers'
knowledge, no Lease Indenture Default or Lease Indenture Event of
Default has occurred and is continuing, (ii) such assumption is
permitted by the provisions of the Company's (and, if applicable,
such Affiliate's) articles of incorporation and by-laws (or
similar corporate documents) and (iii) the Company (and, if
applicable, such Affiliate) is not insolvent at the time of such
assumption and (e) a certificate of a responsible officer of the
Owner Trustee to the effect that, to the best of such officer's
knowledge, no Lease Indenture Default or Lease Indenture Event of
Default has occurred and is continuing (Lease Indenture, Section
2.16); provided, however, that, upon the occurrence of a Special
Transfer, the Company, without further act, will be deemed to
have assumed the obligation, and will be obligated to pay the
principal of and premium, if any, and interest on the Lessor
Bonds, notwithstanding (x) the Lessor's coextensive obligation to
pay the principal of and premium, if any, and interest on the
Lessor Bonds (which shall continue until the documents listed
above have been delivered to the Lease Indenture Trustee) or (y)
any provision of any transaction document to the contrary.
(Participation Agreement, Section 15(d)(4))
Upon satisfaction of the conditions and payment of the amounts
described in the preceding paragraph, the Lessor is required to
transfer title to the Undivided Interest to the Company as
directed by the Company (or an Affiliate of the Company), subject
to the lien of the Lease Indenture. (Lease, Sections 9(c) and
(d))
If the Company makes the payments to the Owner Participant as
described above upon the occurrence of an Event of Loss, Deemed
Loss Event, Financial Event or Lease Event of Default, but has
not yet delivered the documents listed in the second preceding
paragraph, then the Owner Participant must make a Special
Transfer. (Participation Agreement, Section 15(d))
Any of the following events will constitute "Events of Loss":
(l) a final shutdown of Unit 3 which could result from any of
several events, including, and in some cases, subject to certain
grace periods, certain NRC licensing problems with respect to
Unit 3, direction by the NRC or other governmental authority to
suspend operation of Unit 3 for reasons of radiological health
and safety for a period exceeding or reasonably expected (in the
opinion of an independent expert) to exceed 24 consecutive
months, cessation of operation of Unit 3 for such period if
resumption of operation would require concurrence of the NRC or
other governmental authority, the occurrence of certain Nuclear
Incidents (as defined in the Atomic Energy Act) with respect to
Unit 3 as a result of which Unit 3 ceases to operate for a period
exceeding or reasonably expected (in the opinion of an
independent expert) to exceed 18 consecutive months, damage to
Unit 3 and failure to restore Unit 3 within the shorter of three
years or the period from the occurrence of such damage until the
end of the Lease term, the destruction of Unit 3, or a
declaration by the NRC that an Extraordinary Nuclear Occurrence
(as defined in the Atomic Energy Act) has occurred with respect
to Unit 3;
(m) a requisition of title of Unit 3 or the Undivided Interest
or certain shared facilities or the site of Unit 3 by a
governmental authority for a period of time which exceeds or is
reasonably expected to exceed the shorter of 60 months and the
remaining Lease term, subject to certain contest rights of the
Company; or
(n) a requisition of the use of Unit 3 or the Undivided
Interest or certain shared facilities or the site of Unit 3 by a
governmental authority, other than a requisition of title, which
would significantly interfere with the use of Unit 3 or the
Undivided Interest, and which requisition is for a period of time
which exceeds or is reasonably expected to exceed the shorter of
60 months and the remaining Lease term, subject to certain
contest rights of the Company.
(Participation Agreement, Appendix A)
Any of the following events will constitute "Deemed Loss
Events":
(o) the Lessor or Owner Participant becoming subject to
adverse regulation as a public utility solely as a result of the
Transaction;
(p) certain changes and/or new interpretations by a
governmental authority regarding applicable law, including the
Price-Anderson Act, the Atomic Energy Act, the Nuclear Waste Act
or NRC regulations, as a result of which (i) the Lessor or Owner
Participant would more likely than not become liable or
responsible in any capacity for payments owed in respect of the
nuclear waste fund or in respect of, among other things, the
handling or disposal of nuclear waste and other radioactive or
hazardous materials or (ii) the Lessor or the Owner Participant
may be prohibited from asserting the limitation on liability of
lessors provided by the 1988 amendments to the Price-Anderson Act
or is more likely than not to be prohibited from asserting any
other material right, protection or defense available under
applicable law as of the date of closing of the Transactions with
respect to civil or criminal actions brought in connection with a
nuclear incident;
(q) the Lessor or Owner Participant more likely than not being
required to become a licensee under the Atomic Energy Act or
otherwise subject to the Atomic Energy Act or otherwise subject
to NRC or other significant regulation relating to nuclear
energy, environmental or safety matters solely as a result of the
Transaction; or
(r) any governmental action or change in applicable law the
effect of which is more likely than not to (i) cause the Lessor
or Owner Participant to become liable with respect to the
decommissioning of Unit 3 or (ii) constitute an assertion that
(x) the exercise of certain rights of the Lessor or Owner
Participant would constitute impermissible control over Unit 3 or
the licensees of Unit 3 or would violate certain NRC or Atomic
Energy Act regulations or (y) the acquisition or transfer of the
Undivided Interest would violate other provisions of applicable
law.
(Participation Agreement, Appendix A)
Any of the following events will be deemed "Financial Events"
if it remains not cured following expiration of any applicable
notice or cure period (there being no such notice or cure period
in the case of the events described in clauses (f) and (g) below)
and if the Company shall not have timely provided the Owner
Participant with a letter of credit:
(s) the Company shall have failed to maintain, as of the end
of any fiscal quarter, total equity capital (including preferred
stock) at least equal to 30% of the sum of total capitalization
plus certain short-term debt;
(t) the Company shall have failed to maintain, in respect of
the twelve-month period ending on the last day of any fiscal
quarter, a fixed charge coverage ratio of at least 1.50;
(u) except for certain permitted transactions, the Company
shall have sold, assigned, or otherwise disposed of any
substantial part of its assets other than in the ordinary course
of business without the prior approval of the Owner Participant,
provided that the event described in this clause (c) will not
constitute a Financial Event if the Company has delivered first
mortgage bonds to the Owner Participant (see "Other Agreements -
Participation Agreement");
(v) the Company shall have merged with or into or consolidated
with or into any other corporation or entity in violation of
certain conditions without the prior approval of the Owner
Participant;
(w) the Company shall have created, assumed or suffered to
exist liens (except for certain permitted liens) upon its assets;
(x) subject to certain exceptions, the acceleration of certain
indebtedness of the Company for borrowed money or default in
payment of such indebtedness at maturity, if the total of all
such indebtedness so accelerated or defaulted exceeds
$10,000,000;
(y) the occurrence of any of the events described in clause
(e) under "Description of the Leases-Lease Events of Default";
(z) certain events relating to termination of certain of the
Company's pension plans; or
(aa) Entergy shall cease to own, directly or indirectly, all of
the common stock equity and all of the voting stock of the
Company or its permitted successors (other than preferred stock
that has only limited voting rights upon default in the payment
of dividends).
In general, the cure periods in respect of Financial Events of
the type other than those described in clauses (f) and (g) above
are 365 days.
(Participation Agreement, Appendix A)
The Company (or the Company and one of its Affiliates) may, at
its option, but is not required to, assume all or a portion of
the Lessor Bonds if it chooses to exercise any of certain
purchase options described under "Description of the Leases -
Purchase Option for Significant Expenditures" or "-Periodic
Purchase Option" or under "Other Agreements - Participation
Agreement." Any such assumption would be conditioned upon the
prior delivery to the Lease Indenture Trustee of certain
documents as described under "-Assumption by the Company." (See
Lease Indenture, Section 2.16(b); Lease, Sections 13(f) and (g);
and Participation Agreement, Section 16(d))
Defeasance
The Lessor Bonds of any series, or any portion of the principal
amount thereof, will, at or prior to the maturity thereof, be
deemed to have been paid for purposes of the Lease Indenture, and
the entire indebtedness of the Owner Trustee (or other obligor
thereon) in respect thereof will be deemed to have been satisfied
and discharged, if there shall have been irrevocably deposited
with the Lease Indenture Trustee, in trust, either (a) moneys in
an amount which will be sufficient, or (b) Federal Securities (as
defined below), which do not contain provisions permitting the
redemption or other prepayment thereof at the option of the
issuer thereof, the principal of and the interest on which when
due, without any regard to reinvestment thereof, will provide
moneys which, together with the moneys, if any, deposited with or
held by the Lease Indenture Trustee, will be sufficient, to pay
when due the principal of and premium, if any, and interest due
and to become due on such Lessor Bonds on and prior to the
maturity thereof; provided, however, that such Lessor Bonds will
not be deemed to have been satisfied and discharged unless, among
other things, there has been delivered to the Lease Indenture
Trustee an opinion of counsel to the effect that such
satisfaction and discharge of the indebtedness of the Owner
Trustee with respect to such Lessor Bonds shall not be deemed to
be, or result in, a taxable event with respect to the Holders of
such Bonds for purposes of federal income taxation, except that
no such opinion of counsel need be delivered if the Lease
Indenture Trustee shall have received documentary evidence that
each Holder of such Lessor Bonds either is not subject to, or is
exempt from, federal income taxation. For this purpose, the term
"Federal Securities" is defined as direct obligations of, or
obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America or
certificates of an ownership interest in the principal of or
interest on such obligations. (Lease Indenture, Section 11.01)
Releases
The Lease Indenture Trustee will release from the lien of the
Lease Indenture any property subject to the lien thereof which is
taken by any governmental authority pursuant to a power of
eminent domain or other right to acquire such property (whether
or not such taking constitutes an Event of Loss) upon its receipt
of, among other things, a written request from the Owner Trustee
or the Company requesting such release and the net proceeds of
any property so taken. (Lease Indenture, Section 13.01)
Subject to the following paragraph, the Owner Trustee or, with
the Owner Trustee's consent, the Company, may obtain the release
from the lien of the Lease Indenture of the Owner Trustee's
interest in any component of Unit 3 the removal of which would
not materially impair the operating capacity, cost efficiency or
value of Unit 3, and the Lease Indenture Trustee will release
from the lien of the Lease Indenture its interest in any such
component upon its receipt of, among other things, a written
request from the Owner Trustee or the Company requesting such
release and a certificate of an engineer or other expert (who in
certain cases will be required to be independent of the Owner
Trustee and the Company and any Affiliate of either thereof)
certifying (x) the value of the property to be released and (y)
that, in the opinion of such expert, the proposed release will
not impair the security under the Lease Indenture in violation of
the provisions thereof. (Lease Indenture, Section 13.02)
In addition to the release provisions described above, the
Owner Trustee or, with the Owner Trustee's consent, the Company,
may sell or otherwise dispose of, free from the lien of the Lease
Indenture and without obtaining any release or other consent from
the Lease Indenture Trustee, the Owner Trustee's interest in any
components of Unit 3 which have become obsolete or otherwise
permanently no longer useful for the operation of Unit 3. All
replacement components incorporated in Unit 3 will, to the extent
of the Owner Trustee's interest therein, immediately become
subject to the lien of the Lease Indenture. (Lease Indenture,
Section 13.03)
Supplemental Indentures
Without the consent of the Holders of any Lessor Bonds, the
Owner Trustee and the Lease Indenture Trustee may enter into
supplemental indentures for the following purposes:
(bb) to establish the form and terms of Lessor Bonds of any
series;
(cc) to evidence the succession of another bank or trust
company to the Owner Trustee and the assumption by any such
successor of the covenants of the Owner Trustee contained in the
Lease Indenture and in the Lessor Bonds or the appointment of a
co-trustee pursuant to the terms of the Trust Agreement;
(dd) to evidence the succession of a new trustee or the
appointment of a co-trustee or a separate trustee under the Lease
Indenture;
(ee) to grant or confer upon the Lease Indenture Trustee for
the benefit of the Holders any additional rights, remedies,
powers, authority or security which may be lawfully so granted or
conferred and which grant or conferral is not contrary to or
inconsistent with the Lease Indenture;
(ff) to add to the covenants of the Owner Trustee for the
benefit of the Holders or to evidence the surrender of any right
or power conferred in the Lease Indenture upon the Owner Trustee;
(gg) to convey, transfer and assign to the Lease Indenture
Trustee, and to subject to the lien of the Lease Indenture,
additional properties or assets, or to correct or amplify the
description of any property at any time subject to the lien of
the Lease Indenture or to assure, convey and confirm unto the
Lease Indenture Trustee any property subject or required to be
subject to the lien of the Lease Indenture;
(hh) to modify, eliminate or add to the provisions of the Lease
Indenture to the extent necessary to qualify or continue the
qualification of the Lease Indenture (including any supplemental
indenture) under the Trust Indenture Act, or under any similar
federal statute subsequently enacted, or to add to the Lease
Indenture such other provisions as may be expressly permitted by
that Act;
(ii) to permit or facilitate the issuance of Lessor Bonds in
uncertificated form;
(jj) to change or eliminate any provision of the Lease
Indenture; provided, however, that if such change or elimination
will adversely affect the interests of the Holders of Lessor
Bonds of any series, such change or elimination will become
effective with respect to such series only when no Lessor Bond of
such series remains outstanding;
(kk) to evidence an assumption by the Company of the Lessor
Bonds, and the release of the Owner Trustee from its obligations
thereon, and to make the related changes in the Lease Indenture;
(ll) to cure any ambiguity or to correct or supplement any
provision in the Lease Indenture which may be defective or
inconsistent with any other provision in the Lease Indenture; or
(mm) to make any other provisions with respect to matters or
questions arising under the Lease Indenture, provided such action
shall not adversely affect the interests of the Holders of the
Lessor Bonds in any material respect.
(Lease Indenture, Section 10.01)
Subject to the foregoing paragraph, with the consent of the
Holders of not less than a majority in aggregate principal amount
of the outstanding Lessor Bonds of all series, considered as one
class, the Owner Trustee may, and the Lease Indenture Trustee
shall, enter into supplemental indentures for the purpose of
adding any provisions to, or changing in any manner or
eliminating any of the provisions of, the Lease Indenture;
provided that if there is more than one series of Lessor Bonds
outstanding and if a proposed supplemental indenture directly
affects the Holders of at least one, but not all, of such series,
then only the consent of a majority in aggregate principal amount
of the outstanding Lessor Bonds of all series so directly
affected, considered as one class, will be required; and
provided, further, that without the consent of the Holder of each
outstanding Lessor Bond directly affected thereby no such
supplemental indenture may:
(nn) change the stated maturity of the principal of, or any
installment of interest on, or the date or circumstances of
payment of premium, if any, on, any Lessor Bond, or reduce the
principal amount thereof or the interest thereon or any premium
payable upon the redemption thereof, or change the place of
payment where, or the coin or currency in which, any Lessor Bond
or the premium, if any, or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any
such payment of principal or interest on or after the stated
maturity thereof (or, in the case of redemption, on or after the
redemption date) or such payment of premium, if any, on or after
the date such premium becomes due and payable or change the dates
or amounts of payments to be made through the operation of the
sinking fund in respect of such Lessor Bonds;
(oo) permit the creation of any lien prior to or, except with
respect to additional series of Lessor Bonds issued in accordance
with the Lease Indenture, equal to the lien of the Lease
Indenture with respect to any of the Lease Indenture Estate, or
deprive any Holder of the benefit of the lien of the Lease
Indenture upon any part of the Lease Indenture Estate for the
security of its Lessor Bonds;
(pp) reduce the percentage in principal amount of the
outstanding Lessor Bonds, the consent of whose Holders is
required for any supplemental indenture or for any waiver
provided for in the Lease Indenture;
(qq) modify the order of priorities in which distributions of
income and proceeds from the Lease Indenture Estate are to be
made under the Lease Indenture;
(rr) modify the definitions of "Outstanding," "Lease Indenture
Default" or "Lease Indenture Event of Default";
(ss) modify any of the above provisions or the provisions of
the Lease Indenture dealing with waivers of past defaults, except
to increase the percentage of the Holders whose consent is
required for certain action or to provide that certain other
specified provisions of the Lease Indenture cannot be modified or
waived without the consent of the Holder of each Lessor Bond
affected thereby.
(Lease Indenture, Section 10.02)
Limitations on Amendments of Other Documents
The Lease Indenture Trustee, without the consent of the Holders
of any Lessor Bonds, (a) will, upon receipt of written
instructions to such effect from the Company and the Owner
Trustee, consent to amendments of or supplements to, or waivers
of any provisions of, the Lease or any other transaction document
included in the Lease Indenture Estate and (b) may join in the
execution of amendments of or supplements to, or waivers of any
provisions of, the Participation Agreement, in each case for the
purpose of adding any provision to, or changing in any manner or
waiving or eliminating any provisions of, any such transaction
document; provided, however, that, without the consent of the
Holders of not less than a majority in aggregate principal amount
of the outstanding Lessor Bonds of all series, considered as one
class, the Lease Indenture Trustee will not consent to any such
amendment, supplement or waiver which amends or waives certain
provisions of the Lease relating to, among other things, liens,
the right of the Company to assign or sublease its rights and
obligations under the Lease, certain Lease Events of Default or
the exercise of remedies under the Lease; provided, further,
that, without the consent of the Holders of the outstanding
Lessor Bonds of all series, the Lease Indenture Trustee will not
consent to any such amendment, supplement or waiver which will:
(1) amend or waive certain provisions of the Lease relating
to, among other things, the sufficiency of certain rental
payments to provide funds at least equal to scheduled amounts
payable on the Lessor Bonds, the "net lease" obligations of the
Company thereunder and the Company's unconditional obligation
to make basic rental and certain other payments under the
Lease, the obligation of the Owner Trustee to redeem the Lessor
Bonds in the event of an obsolescence termination of the Lease
by the Company, or the Lease Event of Default occasioned by the
failure of the Company to pay basic rent when due;
(2) modify the definitions of "Lease Default" or "Lease
Event of Default"; or
(3) (A) release the Company from its obligation to pay basic
rent, Casualty Value, Special Casualty Value or any payment
required to be made by it pursuant to an exercise of remedies
under the Lease or (B) reduce the amount or change the timing
of any payments of basic rent, Casualty Value, Special Casualty
Value or any payments required to be made by the Company
pursuant to an exercise of remedies under the Lease so that
such payments would be insufficient to pay the principal of,
and interest on, the outstanding Lessor Bonds of all series
when due.
(Lease Indenture, Section 10.03)
Limitation of Liability
The Lessor Bonds will not be direct obligations of, or
guaranteed by, the Company, any Owner Participant, or any
institution or individual acting as Owner Trustee in its
individual capacity. All payments to be made by the Owner
Trustee under the Lease Indenture or on the Lessor Bonds will be
made only from the Lease Indenture Estate or the income and
proceeds received by the Lease Indenture Trustee therefrom.
Neither the Owner Participant, the Lease Indenture Trustee nor
the Owner Trustee in its individual capacity, will be liable to
any Holder for any amounts payable on any Lessor Bonds or
otherwise under the Lease Indenture. (Lease Indenture, Section
2.15)
Additional Bonds
The Lease Indenture permits the issuance of additional Lessor
Bonds at any time or from time to time, subject to certain
conditions, for cash in the original principal amount of such
additional Lessor Bonds for the following purposes: (a) refunding
a previously issued series of Lessor Bonds in whole or in part
and providing funds for the payment of certain expenses incurred
in connection therewith and/or (b) providing funds for all or any
portion of the Owner Trustee's share of certain capital
improvements to Unit 3. (Lease Indenture, Section 2.05) All of
the Lessor Bonds issued and outstanding under the Lease Indenture
will rank on a parity with each other and will as to each other
be secured equally and ratably thereunder, without preference,
priority or distinction of any thereof over any other by reason
of difference in time of issuance or otherwise. (Lease
Indenture. Section 2.03)
DESCRIPTION OF THE LEASES
The statements contained under this caption are intended to
summarize the Leases as they relate to the Collateral Bonds; they
do not purport to be complete and are qualified in their entirety
by reference to the Leases, copies of which have been filed as
exhibits to the Registration Statement of which this Prospectus
is a part. Each Lease is an entirely separate lease but contains
substantially the same terms and provisions as each other Lease.
In the following summary, references to the Lease, the Lease
Indenture, the Owner Participant, the Undivided Interest, the
Lessor and the Lessor Bonds relate to each Lease.
Term and Rentals
The Lessor has acquired its Undivided Interest and has leased
such interest of the Company pursuant to the Lease, which has a
term expiring on July 1, 2017 unless earlier terminated or
extended as described below. Basic rent is required to be paid
by the Company under the Lease in immediately available funds on
each January 2 and July 2, through July 2, 2017. (Lease,
Sections 2(b) and 3(a)) The amount of basic rent payable under
the Lease on each basic rent payment date will be calculated to
be at least equal to the scheduled amount of principal of and
interest then payable on all Lessor Bonds then outstanding.
(Lease, Section 3(g)) Each payment of basic rent by the Company
during such time as the Lease Indenture is in effect will be made
to the Lease Indenture Trustee and applied first to the payment
of principal and interest due from the Lessor on the Lessor
Bonds. Except in the case of an acceleration of Lessor Bonds due
to a continuing Lease Indenture Event of Default, the balance of
any payments of basic rent under the Lease, after payment of the
scheduled principal of and interest on the Lessor Bonds, will be
distributed to the Owner Trustee on behalf of the Owner
Participant, as beneficial owner of the trust which is the owner
of the Undivided Interest. (Lease Indenture, Sections 3.01, 3.03
and 3.06)
Net Lease
The obligations of the Company under the Lease are those of a
lessee under a "net lease", and the Company will be responsible
under the Lease for paying all insurance premiums, operating and
maintenance costs and all other similar costs associated with the
Undivided Interest. Payments of rent under the Lease by the
Company are to be made without counterclaim, set-off, defense,
abatement, suspension or reduction except for certain rights of
set-off the exercise of which would not reduce the amount of rent
required to be paid by the Company to an amount insufficient to
pay in full the principal of, premium, if any, and interest on
the Lessor Bonds then due. (Lease, Section 4)
Capital Improvements
The Company may incur costs from time to time in connection
with capital improvements to Unit 3. Certain of such costs,
based on the Owner Trustee's proportionate interest in Unit 3,
may be financed through a supplemental financing. (See
"Description of the Lease Indentures - Additional Bonds.") In
the event of such a supplemental financing, the rent under the
Lease will be increased to cover the additional debt service. In
addition, the Owner Participant may elect to make an additional
equity investment with respect to the cost of any capital
improvements on terms to be agreed upon. (Lease, Section 8(f))
Rights to Assign or Sublease
The Company is permitted to assign, sublease, encumber or
transfer its rights and obligations under the Lease and other
documents related to the Transactions subject to certain
conditions, including that the Company remain the primary obligor
on the Lease. (Lease, Section 11)
Insurance
The Company is required under the Lease to carry and maintain,
with respect to the Undivided Interest, Unit 3 and the
Unit 3 site, the insurance described below:
(a) Provided that such insurance is commercially available
at a commercially reasonable cost, "all-risk" property
insurance (excluding flood and earthquake insurance) covering
physical loss with respect to Unit 3;
(b) Bodily injury and property damage liability insurance
covering claims arising out of the ownership, operation,
maintenance, condition or use of Unit 3; and
(c) Nuclear liability insurance.
With respect to each of the types of insurance described in (a)
through (c) above, the Company is required to maintain such
insurance in such amounts and with such terms as are consistent
with the Company's normal practice, and in any event in such
amounts and with such terms as are consistent with applicable law
and prudent utility practice. The Company is also required to
maintain supplier's and transporter's insurance and master
workers policy coverages, in each case in amounts consistent with
prudent utility practice and applicable law.
In addition, subject to such insurance being commercially
available at a commercially reasonable cost, the Company is
further required to maintain replacement power insurance covering
not less than 90 percent of the cost of replacing power, as
reasonably estimated by the Company in the event of damage or
destruction at the Unit 3 site. However, the Company shall not
be required to maintain such replacement power coverage if the
Company provides the Owner Participant with a letter of credit as
described under "Other Agreements - Participation Agreement."
(Lease, Section 10)
Proceeds of property insurance received by the Lessor or the
Company as a result of the occurrence of an Event of Loss shall
be applied in reduction of the Company's obligation to make
payment of the excess of Casualty Value over the principal of and
accrued interest on the Lessor Bonds to the Owner Participant
with the balance, if any, of such proceeds to be paid to the
Company, subject, however, to any priority allocation of such
proceeds. (Lease, Section 9(g)) In general, the Lease Indenture
Trustee and the Holders of the Lessor Bonds will have no rights
in respect of the proceeds of property insurance except for the
assignment (to the extent, if any, of amounts then due and owing
in respect of the principal of and premium, if any, and interest
on the Lessor Bonds) by the Owner Trustee to the Lease Indenture
Trustee of the Owner Trustee's rights in respect of such proceeds
received as a result of the occurrence of an Event of Loss.
Purchase and Renewal Options at the End of the Lease Term
The Company has the option under the Lease to purchase at fair
market sales value the Lessor's Undivided Interest at the end of
the term of the Lease, or to renew the Lease for one or more
periods of three years, at a fair market rental value or, subject
to receipt of a satisfactory appraisal which will address certain
tax matters, to renew the Lease at the end of the initial Lease
term at a fixed rate rental for a single period of at least two
years. (Lease, Sections 12 and 13) If the Company does not give
notice of its election to exercise the options to purchase the
Undivided Interest or renew the Lease not earlier than five but
not later than two years prior to the expiration of the Lease,
the Lessor may, on at least one year's prior written notice,
terminate the Lease on the date specified in the notice. Upon
such termination, the Company must pay to the Lessor all basic
rent then due or accrued, together with any other amounts then
payable to the Owner Trustee, the Owner Participant and the Lease
Indenture Trustee. On or prior to such termination, the Lessor
would be required to deposit with the Lease Indenture Trustee
cash in an amount equal to the unpaid principal amount of all
Lessor Bonds outstanding on such date, and all premium, if any,
and interest accrued or to accrue on and as of such termination.
(Lease, Section 14(c))
Purchase Option for Significant Expenditures
The Company has the option on any January 2 or July 2 on or
after January 2, 2000 to terminate the Lease if the Company is
planning or required to make any significant expenditure for
certain types of capital improvements to Unit 3. On such January
2 or July 2, the Company must pay to the Lessor an amount equal
to the higher of the fair market sales value of the Undivided
Interest and Casualty Value determined as of such January 2 or
July 2 together with any other amounts then payable to the Owner
Trustee, the Owner Participant and the Lease Indenture Trustee
and, assuming such payment, the Lessor would be required to
transfer the Undivided Interest to the Company. If the Company
has assumed all or a portion of the Lessor Bonds then
outstanding, such amount shall be reduced by the principal amount
of the Lessor Bonds so assumed. A "significant expenditure" is
an expenditure with respect to certain capital improvements to
Unit 3 which (i) for the period until and including September 28,
2009, shall have been reasonably estimated by the Company to
exceed $250,000,000 (as such amount may be adjusted periodically
in accordance with the Consumer Price Index) and (ii) for the
period from the day next succeeding the last day of the period
specified in clause (i) above until the end of the Lease term,
shall have been reasonably estimated by the Company to exceed
$100,000,000 (as such amount may be adjusted periodically in
accordance with the Consumer Price Index). (Lease, Section
13(f))
Periodic Purchase Option
The Company has the option on January 2 in each of the years
2000, 2005, 2010 and 2015 to terminate the Lease and to purchase
the Undivided Interest. On such January 2, the Company must pay
to the Lessor an amount equal to the higher of the fair market
sales value of the Undivided Interest and Casualty Value
determined as of such January 2 together with any other amounts
then payable to the Owner Trustee, the Owner Participant and the
Lease Indenture Trustee. If the Company has assumed all or a
portion of the Lessor Bonds then outstanding, such amount shall
be reduced by the principal amount of the Lessor Bonds so
assumed. (Lease, Section 13 (g))
Termination for Obsolescence
The Company has the option on any January 2 or July 2, on or
after January 2, 2000, to terminate the Lease if the Company's
Board of Directors determines that the Company's leasehold
interest in the Undivided Interest is uneconomic or obsolete for
the Company's purposes. In such event, the Lessor may elect to
either retain the Undivided Interest or sell it to the highest
bidder. On the Lease termination date, if the Lessor has not
elected to retain the Undivided Interest, the Lessor will be
required to sell the Undivided Interest to the highest bidder
(which may not be either the Company or any Affiliate thereof)
and the Company must pay to the Lessor an amount equal to the
excess, if any, of Special Casualty Value as of the termination
date over such net sale price, and any other amounts then payable
to the Owner Trustee, the Owner Participant and the Lease
Indenture Trustee; provided, however, that if the highest bid
shall be less than Special Casualty Value, the Lessee may reject
the bid, in which case no sale shall occur. If no such sale
shall occur or if the Company shall not have fulfilled its
obligations in respect of such termination, the Lease will
continue in full force and effect. (Lease, Sections 14(a) and
14(b)) In the event of such a termination, the Lessor Bonds will
be redeemed. (Lease Indenture, Section 5.02(a))
Lease Events of Default
The following are Lease Events of Default:
(tt) the Company shall fail to make or cause to be made, (x)
any payment of basic rent, Casualty Value, Special Casualty
Value, or the payment of the equity portion of Casualty Value or
Special Casualty Value or any other amount determined by
reference to any of such amounts pursuant to any of the
transaction documents, within five business days after the same
shall become due or (y) any payment of supplemental rent (other
than Casualty Value, Special Casualty Value, or the payment of
the equity portion of Casualty Value or Special Casualty Value)
including, without limitation, any payments due under the Tax
Indemnification Agreement, within 20 days after the same shall
become due or be demanded, as the case may be; or
(uu) the Company shall fail to perform or observe any covenant,
condition or agreement to be performed or observed by it under
the Participation Agreement relating to the maintenance of its
corporate existence and maintenance of certain of its material
rights and franchises, and the conditions under which it may
merge, consolidate or dispose of all or substantially all of its
assets, or to comply with the return or the assignment and
sublease provisions of the Lease; or
(vv) the Company shall fail to perform or observe any covenant,
condition or agreement (other than those referred to in clauses
(a), (b), (f) and (h) of this paragraph) to be performed or
observed by it under the Lease or any other transaction document
(other than under the Tax Indemnification Agreement or under the
general tax indemnity provisions of the Participation Agreement),
and such failure shall continue for a period of 30 days after
there shall have been given to the Company by the Lessor or the
Owner Participant a notice specifying such failure and requiring
it to be remedied; provided, however, that the continuation of
such failure for a period of 30 days or more after such notice
has been so given (but in no event for a period which is greater
than one year after such notice has been given) shall not
constitute a Lease Event of Default if (a) such failure can be
remedied but cannot be remedied within such 30 days, (b) the
Company is diligently pursuing a remedy of such failure and (c)
such failure does not impair in any material respect the
Company's ability to perform its obligations under any of the
transaction documents to which the Company is a party, or the
Lessor's interest in Unit 3 or the mortgage and security interest
created by the Lease Indenture; or
(ww) any representation or warranty made by the Company in the
Lease, any other transaction document (other than the Tax
Indemnification Agreement) or any agreement, document or
certificate delivered by the Company in connection with the
Transactions shall prove to have been incorrect in any material
respect when such representation or warranty was made or given if
such representation or warranty continues to be material and
remain materially incorrect at the time in question; provided,
however, that such failure of such representation or warranty to
be correct shall not constitute a Lease Event of Default if (i)
the facts or circumstances making such representation or warranty
incorrect can be remedied or changed so that such representation
or warranty will thenceforth be correct in all material respects,
(ii) the Company is diligently pursuing such a remedy or change,
(iii) such remedy or change is, in fact, accomplished within a
period of one year from the time that the Company has been
notified or has knowledge of such misrepresentation or breach of
warranty and (iv) such facts or circumstances do not impair in
any material respect the Company's ability to perform its
obligations under any of the transaction documents to which the
Company is a party or the Lessor's interest in Unit 3 or the
mortgage and security interest created by the Lease Indenture; or
(xx) (x) the Company shall (i) admit in writing its inability
to, or be generally unable to, pay its debts as such debts become
due, (ii) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or
liquidator of itself or of all or a substantial part of its
property, (iii) make a general assignment for the benefit of its
creditors, (iv) commence a voluntary case under the United States
Bankruptcy Code, (v) file a petition seeking to take advantage of
any other law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or readjustment of debts, (vi) fail to
controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case
under the United States Bankruptcy Code, or (vii) take any
corporate action for the purpose of effecting any of the
foregoing; or (y) a proceeding or case shall be commenced,
without the application or consent of the Company, in any court
of competent jurisdiction, seeking (i) its liquidation,
reorganization, dissolution or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like of the Company or of
all or any substantial part of its assets, or (iii) similar
relief in respect of the Company under any law relating to
bankruptcy, insolvency, reorganization, winding-up, or
composition or readjustment of debts, and such proceeding or case
shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of 60 or more days;
or an order for relief against the Company shall be entered in an
involuntary case under the United States Bankruptcy Code; or
(yy) if the Company shall theretofore have provided a letter of
credit to the Owner Participant, the Company (A) shall fail, at
any time, to provide or maintain a letter of credit which
complies with the terms and conditions of the Participation
Agreement, whether or not the Company has used its best efforts
to obtain and maintain such letter of credit or (B) shall fail to
provide a renewal or replacement letter of credit so complying
(l) by the tenth day prior to the stated termination date of an
existing letter of credit or (2) if the issuing bank of an
existing letter of credit shall have delivered notice, in
accordance with the terms thereof, that such existing letter of
credit will be terminated prior to its stated termination date,
by the tenth day prior to the date of such early termination; or
(zz) the occurrence and continuance of an event of default
under any other lease, executed and delivered as of the same date
as the Lease, under which the Company is the lessee of an
undivided interest in Unit 3, and the declaration of such lease
to be in default by any party thereto; or
(aaa) any suspension, revocation or termination of the
nuclear liability insurance required to be maintained under the
Lease; provided, however, that such suspension, revocation or
termination shall not constitute a Lease Event of Default if the
applicable insurer has failed to comply with applicable notice
termination provisions of the pertinent policy; and provided,
further, that the foregoing proviso shall cease to apply upon the
earlier of (x) five business days following receipt by the
Company of actual notice of such suspension, revocation or
termination or (y) the applicable termination date of such policy
assuming that the insurer had complied with its notice
obligations under the pertinent policy; or
(bbb) any material obligation of the Company under the
Lease or any other documents relating to the Transaction to which
it is a party shall at any time for any reason cease to be valid
and binding on the Company, or shall be declared to be null and
void, or the validity or enforceability thereof shall be
contested by the Company or any governmental agency or authority,
or the Company shall assert that it has no further liability or
obligation under the Lease or any other document relating to the
Transactions to which it is a party; or
(ccc) final judgment for the payment of money in excess of
$10,000,000 shall be rendered against the Company and the Company
shall not have discharged the same or provided for its discharge
in accordance with its terms or bonded the same or procured a
stay of execution thereof within 60 days from the entry thereof;
or
(ddd) the Company shall exercise, or commence any action or
proceeding or take any action seeking to exercise, any rights it
may have under Louisiana law to partition Unit 3.
(Lease, Section 15)
Remedies
Upon the occurrence and continuance of any Lease Event of
Default, a Lessor may exercise one or more of the remedies set
forth in the Lease, which include the following: (a) the Lessor
may declare the Lease to be in default or may terminate the
Lease; (b) the Lessor may repossess the Undivided Interest; (c)
the Lessor may sell the Undivided Interest or any part thereof;
(d) the Lessor may hold, keep idle or lease to others all or any
part of the Undivided Interest; (e) the Lessor may demand any
unpaid rent plus, as liquidated damages, any of the following
amounts which the Lessor, in its sole discretion, shall specify:
(i) an amount equal to the excess of Casualty Value over the fair
market rental value of the Undivided Interest until the end of
the remaining useful life of Unit 3 (discounted to present
value), (ii) an amount equal to the excess of Casualty Value over
the fair market sales value of the Undivided Interest, (iii) an
amount equal to the excess of the present value of all
installments of basic rent until the end of the Lease term over
the present value of the fair market rental value of the
Undivided Interest until the end of such term, or (iv) an amount
equal to the highest of Casualty Value, such discounted fair
market rental value and such fair market sales value; and (f) if
the Lessor shall have sold all the Undivided Interest pursuant to
clause (c) above, the Lessor, in lieu of exercising its rights
under clause (e) above may demand that the Company pay to the
Lessor, as liquidated damages, any unpaid rent plus the amount of
any deficiency between the sale proceeds and Casualty Value
together with interest on the amount of such rent and such
deficiency.
The remedies in the Lease are cumulative and in addition to any
other remedy available to the Lessor at law or in equity, and no
exercise of any remedy under the Lease will, except as
specifically provided therein, relieve the Company of any of its
liabilities and obligations under the Lease. (Lease, Section 16)
Quiet Enjoyment
The transaction documents provide that, unless a Lease Event
of Default has occurred and is continuing, the Company's use and
possession of Unit 3, including the Undivided Interest, shall not
be interrupted by the Lessor or any person claiming by, through
or under the Lessor. (Lease, Section 6(a))
OTHER AGREEMENTS
The discussion of the Participation Agreements and Tax
Indemnification Agreements below is intended to merely summarize
certain provisions of those agreements as they relate to the
Collateral Bonds and the Transactions; it does not purport to be
complete and is qualified in its entirety by reference to those
agreements, copies of which have been filed as exhibits to the
Registration Statement of which this Prospectus is a part.
Participation Agreement
In each Participation Agreement the Company has agreed, among
other things, that it will at all times maintain its corporate
existence and will not consolidate with or merge into, or sell,
transfer or otherwise dispose of substantially all of its assets
to, any person unless immediately after giving effect to such
transaction a number of conditions are met, including the
requirements that (a) the survivor be a corporation organized
under the laws of the United States of America, a State thereof
or the District of Columbia, (b) the survivor of such transaction
assumes the obligations of the Company under each of the other
documents relating to the Transactions to which the Company was a
party, (c) such transaction does not permit the early termination
of any letter of credit prior to its scheduled expiration date,
(d) all governmental actions and corporate approvals have been
obtained for the transaction, (e) the transaction will not result
in a material violation of any provision of any agreement or
financing arrangement to which the Company is a party, and (f)
the survivor delivers to the Owner Participant, the Owner Trustee
and the Lease Indenture Trustee opinions and officers'
certificates as to, among other things, compliance with the
transfer conditions above. (Participation Agreement, Section
9(b) (3)) Reference is also made to the discussion above under
"Description of the Lease Indentures - Assumption by the Company"
for additional restrictions in respect of certain mergers,
consolidations or sales of assets affecting the Company.
Pursuant to each Participation Agreement, the Company provided
the Owner Participant with financial support to secure the
payment to the Owner Participant of the equity portion of amounts
payable by the Lessee under the Lease and related documents in
the form of a new series of first mortgage bonds issued under the
Company's first mortgage indenture. Upon the occurrence of an
Event of Loss, a Deemed Loss Event, a Financial Event or a Lease
Event of Default under the related Lease, an Owner Participant
would be entitled to demand payment on such first mortgage bonds
in an amount generally not exceeding Casualty Value less the
aggregate principal amount of and accrued interest on the related
Lessor Bonds then outstanding. The Holders of the Lessor Bonds
(including the Trustee, as holder of the Pledged Lessor Bonds)
and Holders of the Collateral Bonds are not entitled to the
benefit of such first mortgage bonds. As an alternative to the
first mortgage bonds, the Company could supply such financial
support in the form of a letter of credit issued by a commercial
bank. Once a letter of credit has been provided to an Owner
Participant, the Company will be required to provide a letter of
credit for such Owner Participant for the remainder of the basic
term of the related Lease. If a letter of credit were about to
expire or be terminated prior to the scheduled expiration
thereof, and the Company does not replace such letter of credit
with another letter of credit issued by an eligible bank, the
Company would have the right to purchase the related Undivided
Interest from the related Lessor, thereby terminating the related
Lease, at a price equal to the higher of fair market sales value
and Casualty Value; provided, however, that if the Company had
assumed all or a portion of the related Lessor Bonds then
outstanding, the purchase price would be reduced by the principal
amount of such Lessor Bonds then outstanding. (Participation
Agreement, Section 16(d))
Subject to certain first refusal rights of the Company, any
Owner Participant may at any time assign, convey or otherwise
transfer its interest in, to and under any transaction document
or its trust estate to a person with a net worth at the time of
such transfer of not less than $50 million or to a person whose
obligations under the transaction documents have been guaranteed
by a person with such a net worth. The transferring Owner
Participant will, with certain limited exceptions, be released
from its obligations under the transaction documents and the
transferee Owner Participant shall succeed to such obligations
and rights of the transferring Owner Participant. (Participation
Agreement, Section 14)
Tax Indemnification Agreement
Pursuant to separate Tax Indemnification Agreements for each
Transaction between the Company and the Owner Participant, the
Company is obligated to pay to the Owner Participant, among other
things, amounts which, on an after-tax basis, equal the amounts
of additional federal income taxes payable by the Owner
Participant with respect to any current or prior taxable year as
a result of a Tax Loss and any interest, penalties or additions
to any tax imposed as a result of such Tax Loss or the contest
thereof. For purposes of each Tax Indemnification Agreement,
"Tax Loss" includes, subject to certain exceptions: (a) loss to
the Owner Participant of depreciation or analogous deductions
with respect to the related Undivided Interest or interest
deductions with respect to the related Lessor Bonds; (b) loss to
the Owner Participant of foreign tax credits due to the treatment
of any item of income, gain, loss or deduction with respect to
the related Transaction as derived from, or allocable to, foreign
sources (in the case of either (a) or (b) as a result of, among
other things, (i) any act or failure to act by the Company, (ii)
any misrepresentation or breach of warranty or covenant in the
transaction documents by the Company, (iii) bankruptcy of the
Company or any disposition of the related Undivided Interest
pursuant to the exercise of remedies under the related Indenture
or (iv) damage to or the taking of the related Undivided
Interest); or (c) unanticipated income of the Owner Participant
with respect to the related Undivided Interest.
PLAN OF DISTRIBUTION
The Prospectus Supplement relating to a series of Collateral
Bonds will set forth the terms of the offering of the Collateral
Bonds, including the names of underwriters, including Morgan
Stanley & Co. Incorporated and Citicorp Securities, Inc., the
proceeds to Funding Corporation from such sale, any items
constituting underwriters' compensation, any initial public
offering price and any discounts or concessions allowed or
reallowed to dealers. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time. The Collateral Bonds will be
acquired by the underwriters for their own account and may be
resold from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of each resale. Unless
otherwise set forth in the Prospectus Supplement, the obligations
of the underwriters to purchase the Collateral Bonds will be
subject to certain conditions precedent, and the underwriters
will be obligated to purchase all such Collateral Bonds if any
are purchased; provided that the agreement between the Company
and the underwriters providing for the sale of the Collateral
Bonds may provide that under certain circumstances involving a
default of underwriters, less than all of the Collateral Bonds
may be purchased.
Each Prospectus Supplement relating to a particular offering of
Collateral Bonds will contain a statement (1) as to whether or
not the existence of a secondary market for such securities can
be predicted and, if such existence is predicted, as to the
extent of such secondary market, and (2) as to whether or not the
underwriter or underwriters intend to make a market in such
securities.
Subject to certain conditions, the Company may agree to
indemnify the underwriter or underwriters and their controlling
persons against certain civil liabilities, including liabilities
under the Securities Act of 1933, as amended.
EXPERTS AND LEGALITY
The Company's balance sheets as of December 31, 1995 and 1994
and the statements of income, retained earnings, and cash flows
and the related financial statement schedule for the two years
ended December 31, 1995, incorporated by reference in this
Prospectus, have been incorporated by reference herein in
reliance on the reports of Coopers & Lybrand L.L.P., independent
accountants, given on the authority of that firm as experts in
accounting and auditing.
The statements of income, retained earnings, and cash flows and
the related financial statement schedule for the year ended
December 31, 1993, incorporated in this Prospectus by reference
to the Company's Annual Report on Form 10-K for the year ended
December 31, 1995, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their reports dated February
11, 1994, also incorporated by reference herein, and have been so
included in reliance upon the reports of such firm given upon
their authority as experts in accounting and auditing.
Legal matters in connection with the issuance of the Collateral
Bonds will be passed upon for the Company by Monroe & Lemann (A
Professional Corporation), New Orleans, Louisiana, and Reid &
Priest LLP, New York, New York, and for the underwriters by
Winthrop, Stimson, Putnam & Roberts, New York, New York.
However, all legal matters pertaining to the organization of the
Company will be passed upon only by Monroe & Lemann (A
Professional Corporation). In rendering such opinions, Reid &
Priest LLP and Winthrop, Stimson, Putnam & Roberts will rely upon
the opinion of Monroe & Lemann (A Professional Corporation) as to
matters of Louisiana law, and Monroe & Lemann (A Professional
Corporation) will rely upon the opinion of Reid & Priest LLP as
to matters of New York law. Certain matters with respect to the
legality of the Lessor Bonds will be passed upon for the Owner
Trustee by Haight, Gardner, Poor & Havens, New York, New York,
and by Liskow & Lewis, New Orleans, Louisiana.
GLOSSARY
Certain capitalized terms used in this Prospectus and the
accompanying Prospectus Supplement have the following meanings
and such meanings shall apply to terms both singular and plural
unless the context clearly requires otherwise:
"Affiliate" means with respect to the Company any other person
directly or indirectly controlling or controlled by, or under
direct or indirect common control with, the Company. For
purposes of this definition, the term "control" (including the
correlative meanings of the terms "controlled by" and "under
common control with"), as used with respect to any person, shall
mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management policies of such
person, whether through the ownership of voting securities or by
contract or otherwise.
"Atomic Energy Act" means the Atomic Energy Act of 1954, as
amended, and regulations from time to time issued, published or
promulgated pursuant thereto.
"Casualty Value" means an amount specified in each Lease which
the Company must pay to the Lessor under such Lease in certain
circumstances, which amount is, in general and among other
things, calculated to preserve the net economic return of the
related Owner Participant.
"Collateral Bonds" mean bonds offered by this Prospectus.
"Company" means Entergy Louisiana, Inc. (formerly Louisiana
Power & Light Company), and its permitted successors and assigns.
"Deemed Loss Event" means any of the events described as a
Deemed Loss Event in each Lease upon the occurrence of which the
Company must (subject to certain conditions) acquire the
beneficial interest of the related Owner Participant and/or
assume the related Lessor Bonds. (See "Description of the Lease
Indentures - Assumption by the Company.")
"Event of Loss" means any of the events described as an Event
of Loss in each Lease upon the occurrence of which the Company
must (subject to certain conditions) acquire the beneficial
interest of the Owner Participant and/or assume the related
Lessor Bonds. (See "Description of the Lease Indentures -
Assumption by the Company.")
"Excepted Payment" means (i) any indemnity payment (including
payments under the Tax Indemnification Agreement) payable to the
Owner Trustee or the Owner Participant, (ii) any amount payable
under any transaction document to reimburse the Lessor or the
Owner Participant for performing or complying with any of the
obligations of the Company under and as permitted by any
transaction document, (iii) any insurance proceeds or other
payments received with respect to an Event of Loss in excess of
amounts then due and owing to reimburse the Lease Indenture
Trustee for any of its expenses and to pay the reasonable
remuneration of the Lease Indenture Trustee plus amounts then due
and owing in respect of the principal of and premium, if any, and
interest on all Lessor Bonds outstanding, (iv) any insurance
proceeds under liability policies, replacement power insurance
policies and insurance policies not required by the Lease,
(v) any payment of the equity portion of Casualty Value or
Special Casualty Value in respect of an Event of Loss, Deemed
Loss Event or Financial Event, (vi) amounts payable to the Owner
Trustee in connection with the exercise by the Company of its
option to purchase the Undivided Interest during the term of the
Lease (subject, in any event, to the condition that the Company
shall have assumed all of the Lessor Bonds then outstanding and
none of such Lessor Bonds are then to be redeemed), (vii) if a
letter of credit has been terminated or has expired, the portion,
if any, of Casualty Value or Special Casualty Value (before
taking into account the effect of certain drawings on such letter
of credit) equal to the amount by which Casualty Value, reduced
by the principal amount of and accrued interest on the
outstanding Lessor Bonds, exceeds the sum of all amounts drawn
under such letter of credit and not reinstated, (viii) any amount
payable to the Owner Participant by any transferee as the
purchase price of the Owner Participant's interest in the trust
estate, (ix) the ongoing fees and expenses of the Owner Trustee
under the transaction documents and (x) any payments in respect
of interest to the extent attributable to payments referred to in
clauses (i) through (vii) above.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Financial Event" means any of the events described as a
Financial Event in each Lease upon the occurrence of which the
Company must (subject to certain conditions) acquire the
beneficial interest of the related Owner Participant and/or
assume the related Lessor Bonds. (See "Description of the Lease
Indentures - Assumption by the Company.")
"Funding Corporation" means W3A Funding Corporation, a Delaware
corporation.
"Holder", as used in "Description of the Collateral Bonds and
the Indenture," means the registered holder of Securities, as
indicated on the Security Register maintained under the
Indenture, and, as used in "Description of the Lease Indentures,"
means the registered holder of Lessor Bonds under a Lease
Indenture, as indicated on the Bond Register maintained under
such Lease Indenture.
"Indenture" means the Collateral Trust Indenture, among Funding
Corporation, the Company and the Trustee, as supplemented and
amended, pursuant to which the Collateral Bonds are issued.
"Initial Lessor Bonds" means Waterford 3 Secured Lease
Obligation Bonds issued in 1989 by the respective Lessors as
three separate issues under three separate Lease Indentures, each
issue comprised of a series maturing in 2005 and a series
maturing in 2017.
"Lease" means each Facility Lease, dated as of September 1,
1989, as supplemented, under which the Company leases an
Undivided Interest in Unit 3 from a Lessor in connection with the
Transactions. "Leases" means each and every Lease.
"Lease Default" means an event or condition which, with the
giving of notice or lapse of time, or both, would constitute a
Lease Event of Default.
"Lease Event of Default" means an Event of Default as such term
is defined under a Lease. (See "Description of the Leases -
Lease Events of Default.")
"Lease Indenture" means each Indenture of Mortgage and Deed of
Trust, dated as of September 1, 1989, as supplemented, between a
Lessor and the Lease Indenture Trustee, pursuant to which the
Lessor Bonds are issued. "Lease Indentures" means each and every
Lease Indenture.
"Lease Indenture Default" means an event or condition which,
with the giving of notice or the lapse of time, or both, would
constitute a Lease Indenture Event of Default.
"Lease Indenture Estate" means the trust estate assigned,
transferred and pledged by a Lessor to the related Lease
Indenture Trustee under its Lease Indenture, for the ratable
benefit of the holders of the Lessor Bonds issued thereunder.
"Lease Indenture Event of Default" means an "Indenture Event of
Default" as defined in a Lease Indenture. (See "Description of
the Lease Indentures - Lease Indenture Events of Default.")
"Lease Indenture Trustee" means each institution and/or
individual acting as an indenture trustee under each of the Lease
Indentures. "Lease Indenture Trustees" means each and every
Lease Indenture Trustee.
"Lessor" means any institution and/or individual acting as
Owner Trustee under a trust agreement with an Owner Participant
and as Lessor under a Lease and which, in such capacity, has
purchased an Undivided Interest in Unit 3 as part of the
Transactions. "Lessors" means each and every Lessor.
"Lessor Bonds" means the non-recourse bonds issued by a Lessor
under its Lease Indenture.
"NRC" means the Nuclear Regulatory Commission of the United
States of America or any successor agency.
"Nuclear Waste Act" means the Nuclear Waste Policy Act of 1982,
as amended, or any comparable successor law.
"Owner Participant" means a corporation which, in connection
with the Transactions, has acquired a beneficial interest in the
owner trust which is the owner and Lessor of an Undivided
Interest.
"Owner Trustee" means each institution and/or individual acting
as owner trustee under a trust agreement with an Owner
Participant in connection with the Transactions.
"Participation Agreement" means each Participation Agreement,
dated as of September 1, 1989, as amended, entered into among the
Company, Funding Corporation, the Owner Participant, a Lessor, a
Lease Indenture Trustee and the Trustee, which relates to a
Transaction and sets forth the terms and conditions upon which a
Transaction will be consummated. "Participation Agreements" mean
each and every Participation Agreement.
"Pledged Lessor Bonds" means the Lessor Bonds which are pledged
by Funding Corporation to Trustee as security for Securities
(including the Collateral Bonds).
"Price-Anderson Act" means the Price-Anderson Act (1957), as
amended.
"Refinancing" means the series of transactions pursuant to
which the Initial Lessor Bonds will be refinanced.
"Responsible Officer" shall mean, with respect to the subject
matter of any covenant, agreement or obligation of any party
contained in any Transaction Document, the President, any Vice
President, Assistant Vice President, Account Officer, Treasurer,
Assistant Treasurer or any other officer who in the normal
performance of his operational responsibility would have
knowledge of such matter and the requirements with respect
thereto.
"SEC" means Securities and Exchange Commission.
"Securities" means bonds, notes or other evidences of
indebtedness which may be issued under the Indenture.
"Special Casualty Value" means an amount specified in each
Lease which the Company must pay to the Lessor under such Lease
in certain circumstances, which amount is, in general and among
other things, calculated to preserve the net economic return of
the related Owner Participant.
"Special Transfer" means the assignment and transfer by an
Owner Participant of its beneficial interest in the related owner
trust to the Company or its designee upon the occurrence of an
Event of Loss, a Deemed Loss Event, Financial Event or a Lease
Event of Default.
"Supplemental Financing" means the issuance of additional
Lessor Bonds under a Lease Indenture to finance the related
Lessor's proportionate share of capital improvements to Unit 3.
"Supplemental Indenture" means a supplemental indenture to the
Indenture, among Funding Corporation, the Company and the
Trustee.
"Tax Indemnification Agreement" means each tax indemnification
agreement dated as of September 1, 1989, as amended, between the
Company and an Owner Participant.
"Transaction" means any of the three transactions pursuant to
which the Company sold the Undivided Interests in Unit 3 to the
Lessors under three separate owner trust agreements and leased
back such interests pursuant to three separate Leases.
"Transactions" refers to all of such transactions.
"Trustee" means Bankers Trust Company, trustee under the
Indenture.
"Undivided Interest" means any of the three undivided interests
in Unit 3, which interests compose in aggregate an approximate
10.5% interest in Unit 3 (as defined) (which is equivalent on a
cost basis to an approximate 9.3% interest in Waterford 3) and
each of which undivided interest was sold by the Company to the
Owner Trustee under three separate owner trust agreements with
the Owner Participant, and then leased back to the Company on a
long-term net lease basis.
"Unit 3" means Waterford 3, exclusive of certain transmission,
pollution control and other facilities, together with certain
capital improvements thereto.
"Waterford 3" means Unit No. 3 (nuclear) of the Waterford Steam
Electric Generating Station.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 16. List of Exhibits*
1(a) - Form of Underwriting Agreement among the
Company, Funding Corporation and the
Underwriters (previously filed).
4(a) - Form of Collateral Trust Indenture among
Funding Corporation, the Company and Bankers
Trust Company, as Trustee (previously filed).
4(b) - Form of Supplemental Indenture No. 1 to
Collateral Trust Indenture (previously filed).
**4(c)-1 - Indenture of Mortgage and Deed of Trust No. 1
among the Owner Trustee, the Company and
Bankers Trust Company and Stanley Burg as
Indenture Trustee ("Indenture No. 1") (filed as
Exhibit 4(a)-1 to Registration Statement No. 33-
30660).
**4(c)-2 - Indenture of Mortgage and Deed of Trust No. 2
among the Owner Trustee, the Company and
Bankers Trust Company of California, National
Association, and Cecil D. Bobey as Indenture
Trustee ("Indenture No. 2") (filed as Exhibit
4(a)-2 to Registration Statement No. 33-30660).
**4(c)-3 - Indenture of Mortgage and Deed of Trust No. 3
among the Owner Trustee, the Company and
Security Pacific National Trust Company (New
York) and Kenneth T. McGraw as Indenture
Trustee ("Indenture No. 3") (filed as Exhibit
4(a)-3 to Registration Statement No. 33-30660).
**4(d)-1 - Supplemental Indenture No. 1 to Indenture No. 1
(filed as Exhibit A-2(b)(1) to Rule 24
Certificate in File No. 70-7653).
**4(d)-2 - Supplemental Indenture No. 1 to Indenture No. 2
(filed as Exhibit A-2(b)(2) to Rule 24
Certificate in File No. 70-7653).
**4(d)-3 - Supplemental Indenture No. 1 to Indenture No. 3
(filed as Exhibit A-2(b)(3) to Rule 24
Certificate in File No. 70-7653).
4(d)-4 - Form of Supplemental Indenture No. 2 to Lease
Indenture (previously filed).
**4(e)-1 - Facility Lease No. 1 between the Owner Trustee,
as Lessor, and the Company, as Lessee (filed as
Exhibit 4(c)-1 to Registration Statement No. 33-
30660).
**4(e)-2 - Facility Lease No. 2 between the Owner Trustee,
as Lessor, and the Company, as Lessee (filed as
Exhibit 4(c)-2 to Registration Statement No. 33-
30660).
**4(e)-3 - Facility Lease No. 3 between the Owner Trustee,
as Lessor, and the Company, as Lessee (filed as
Exhibit 4(c)-3 to Registration Statement No. 33-
30660).
4(e)-4 - Form of Lease Supplement No. 1 to Facility
Lease (previously filed).
**4(f)-1 - Participation Agreement No. 1 among the Owner
Participant, the Owner Trustee, the Company and
Bankers Trust Company and Stanley Burg as
Indenture Trustee (filed as Exhibit 4(d)-1 to
Registration Statement No. 33-30660).
**4(f)-2 - Participation Agreement No. 2 among the Owner
Participant, the Owner Trustee, the Company and
Bankers Trust Company of California, National
Association, and Cecil D. Bobey as Indenture
Trustee (filed as Exhibit 4(d)-2 to
Registration Statement No. 33-30660).
**4(f)-3 - Participation Agreement No. 3 among the Owner
Participant, the Owner Trustee, the Company and
Security Pacific National Trust Company (New
York) and Kenneth T. McGraw as Indenture
Trustee (filed as Exhibit 4(d)-3 to
Registration Statement No. 33-30660).
4(f)-4 - Form of Amendment No. 1 to Participation
Agreement (previously filed).
**4(g)-1 - Facilities Agreement No. 1 between the Company
and the Owner Trustee (filed as Exhibit 4(e)-1
to Registration Statement No. 33-30660).
**4(g)-2 - Facilities Agreement No. 2 between the Company
and the Owner Trustee (filed as Exhibit 4(e)-2
to Registration Statement No. 33-30660).
**4(g)-3 - Facilities Agreement No. 3 between the Company
and the Owner Trustee (filed as Exhibit 4(e)-3
to Registration Statement No. 33-30660)
**4(h)-1 - Ground Lease No. 1 between the Company and the
Owner Trustee (filed as Exhibit 4(f)-1 to
Registration Statement No. 33-30660).
**4(h)-2 - Ground Lease No. 2 between the Company and the
Owner Trustee (filed as Exhibit 4(f)-2 to
Registration Statement No. 33-30660).
**4(h)-3 - Ground Lease No. 3 between the Company and the
Owner Trustee (filed as Exhibit 4(f)-3 to
Registration Statement No. 33-30660).
**4(i)-1 - Tax Indemnification Agreement No. 1 between the
Owner Participant and the Company (filed as
Exhibit 4(g)-1 to Registration Statement No. 33-
30660).
**4(i)-2 - Tax Indemnification Agreement No. 2 between the
Owner Participant and the Company (filed as
Exhibit 4(g)-2 to Registration Statement No. 33-
30660).
**4(i)-3 - Tax Indemnification Agreement No. 3 between the
Owner Participant and the Company (filed as
Exhibit 4(g)-3 to Registration Statement No. 33-
30660).
4(i)-4 - Form of Amendment No. 1 to Tax Indemnification
Agreement (previously filed).
**4(j) - Ownership and Operating Agreement between the
Company and the Owner Trustee (filed as Exhibit
4(h)-1 to Registration Statement No. 33-30660).
4(k) - Form of Refunding Agreement among Owner
Participant, Owner Trustee, Lease Indenture
Trustee and the Company (previously filed).
5(a) - Opinion of Reid & Priest LLP, counsel for the
Company (previously filed).
5(b) - Opinion of Monroe & Lemann (A Professional
Corporation), counsel for the Company
(previously filed).
**12 - Company's Computation of Ratio of Earnings to
Fixed Charges (filed as Exhibit 99(c) to the
Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996).
23(a) - Consent of Reid & Priest LLP (included in
Exhibit 5(a)) (previously filed).
23(b) - Consent of Monroe & Lemann (A Professional
Corporation) (included in Exhibit 5(b))
(previously filed).
23(c) - Consent of Deloitte & Touche LLP (revised and
filed herewith at page II-6).
23(d) - Consent of Coopers & Lybrand L.L.P. (revised
and filed herewith at page II-7).
24 - Power of Attorney (previously filed).
25(a) - Form T-1 Statement of Eligibility under the
Trust Indenture Act of 1939 of Bankers Trust
Company, Trustee (previously filed).
* Reference is made to a duplicate list of exhibits filed as part
of this Pre-Effective Amendment No. 1 to Registration
Statement, which list, prepared in accordance with Item 102 of
Regulation S-T of the SEC, immediately precedes the exhibits
being filed with this Pre-Effective Amendment No. 1 to
Registration Statement. Where it is indicated that certain
exhibits have been previously filed, such exhibits were filed
with the original Registration Statement filed with the SEC on
February 29, 1996.
** Incorporated herein by reference as indicated.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3, and
has duly caused this Pre-Effective Amendment No. 1 to its
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New
Orleans, State of Louisiana, on the 19th day of December, 1996.
ENTERGY LOUISIANA, INC.
By: *
John J. Cordaro
President
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following
persons in the capacities and on the dates indicated.
Signature Title Date
* Chairman of the December , 1996
Edwin Lupberger Board, Chief
Executive Officer
and Director
(Principal
Executive Officer)
* Executive Vice
Gerald D. McInvale President, Chief December , 1996
Financial Officer,
and Director
(Principal
Financial Officer)
* Vice President,
Louis E. Buck, Jr. Chief Accounting December , 1996
Officer and
Assistant Secretary
(Principal
Accounting Officer)
*
Michael B. Bemis
*
John J. Cordaro
* Directors
Donald C. Hintz December , 1996
*
Jerry D. Jackson
*
Jerry L. Maulden
* By /s/ William J. Regan, Jr.
William J. Regan, Jr., as
attorney-in-fact for each
of the persons indicated
by an asterisk
EXHIBIT 23(c)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Pre-
Effective Amendment No. 2 to Registration Statement No. 333-
01329 of Entergy Louisiana, Inc. (formerly Louisiana Power &
Light Company) on Form S-3 of our reports dated February 11,
1994, appearing in the Annual Report on Form 10-K of Entergy
Louisiana, Inc. for the year ended December 31, 1995, and to
the references to us under the heading "Experts and
Legality" in the Prospectus which is part of this
Registration Statement.
/s/ Deloitte & Touche LLP
New Orleans, Louisiana
December 19, 1996
EXHIBIT 23(d)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Post-
Effective Amendment No. 2 to registration statement on Form S-3
(File No. 333-01329) of our reports dated February 14, 1996, on
our audits of the financial statement and financial statement
schedule of Entergy Louisiana, Inc., formerly Louisiana Power &
Light Company, as of and for the years ended December 31, 1995
and 1994, which reports are included in the Company's Annual
Report on Form 10-K. We also consent to the reference to our
firm under the caption "Experts and Legality."
/s/ Coopers & Lybrand L.L.P.
New Orleans, Louisiana
December 19, 1996