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Exhibit 4.12
SECURITY AGREEMENT
dated as of May 14, 1999
Between
AEE 2, L.L.C.
and
CREDIT SUISSE FIRST BOSTON,
as Secured Party
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TABLE OF CONTENTS
Page
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ARTICLE 1
SECURITY INTEREST
Section 1.01 Grant of Security Interest...................................................... 1
Section 1.02 Validity and Priority of Security Interest...................................... 1
Section 1.03 Maintenance of Status of Security Interest, Collateral and Rights............... 1
(a) Required Action........................................................... 1
(b) Authorized Action......................................................... 1
Section 1.04 Evidence of Status of Security Interest......................................... 2
Section 1.05 Pledgor Remains Obligated; Secured Party Not Obligated.......................... 2
Section 1.06 Pledgor's Limited Rights to Proceeds and Other Collateral....................... 2
ARTICLE 2
CERTAIN REPRESENTATIONS, WARRANTIES, AND COVENANTS
Section 2.01 Authorization; Enforceability; Required Consents; Absence of Conflicts.......... 3
Section 2.02 Collateral...................................................................... 3
Section 2.03 Preservation of Existence and Properties, Scope of Business, Compliance
with Law, Payment of Taxes and Claims, Preservation of Enforceability........... 4
Section 2.04 Insurance....................................................................... 4
Section 2.05 Use of Proceeds................................................................. 4
Section 2.06 Liens........................................................................... 4
Section 2.07 Disposition of Assets........................................................... 5
Section 2.08 Incurrence of Debt.............................................................. 5
Section 2.09 Limitations on Investments...................................................... 5
Section 2.10 Transactions with Affiliates.................................................... 5
Section 2.11 (a) Subsidiaries.............................................................. 5
(b) Merger; Consolidation..................................................... 5
Section 2.12 Additional Facilities........................................................... 5
Section 2.13 Limited Liability Company Agreement............................................. 5
Section 2.14 Payment of Operating and Maintenance Costs...................................... 6
Section 2.15 (a) Taxes and Fees............................................................ 6
(b) Accuracy of Questionnaire................................................. 6
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ARTICLE 3
EVENT OF DEFAULT
A. Proceeds........................................................................ 6
Section 3.01 Application of Proceeds......................................................... 6
B. Remedies........................................................................ 7
Section 3.02 ................................................................................ 7
(a) Use of Premises and Intellectual Property................................. 7
(b) Receiver.................................................................. 7
(c) Collection of Collateral Proceeds by Pledgor.............................. 7
(d) Notification.............................................................. 7
(e) Secured Party's Rights with Respect to Proceeds and Other Collateral...... 8
(f) Enforcement by Secured Party.............................................. 8
(g) Adjustments............................................................... 8
(h) Warehousing............................................................... 8
Section 3.03 Instruments and Investment Property Collateral.................................. 8
ARTICLE 4
MISCELLANEOUS
Section 4.01 Expenses of Pledgor's Agreements and Duties..................................... 9
Section 4.02 Secured Party's Right to Perform on Pledgor's Behalf............................ 9
Section 4.03 Secured Party's Right to Use Agents and to Act in Name of Pledgor............... 9
Section 4.04 No Interference, Compensation or Expense........................................ 9
Section 4.05 Limitation of Obligations with Respect to Collateral............................ 9
Section 4.06 Rights of Secured Party Under Uniform Commercial Code and Applicable Law........ 10
Section 4.07 Waivers of Rights Inhibiting Enforcement........................................ 10
Section 4.08 Power of Attorney............................................................... 10
Section 4.09 Termination of Security Interest................................................ 11
Section 4.10 Notices......................................................................... 11
Section 4.11 Governing Law................................................................... 11
Section 4.12 LIMITATION OF LIABILITY......................................................... 12
Section 4.13 Counterparts.................................................................... 12
Section 4.14 Entire Agreement................................................................ 12
Section 4.15 Successors and Assigns.......................................................... 12
Section 4.16 Delivery of Opinions Authorized................................................. 12
ARTICLE 5
INTERPRETATION
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Section 5.01 Definitional Provisions......................................................... 13
(a) Certain Terms Defined by Reference........................................ 13
(b) Other Defined Terms....................................................... 13
Section 5.02 Other Interpretative Provisions................................................. 18
Section 5.03 Representations and Warranties.................................................. 19
Section 5.04 Captions........................................................................ 19
Section 5.05 No Recourse to Affiliates....................................................... 19
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Schedule 1.03 Schedule Of Required Action
Schedule 1.03(a) Standard Form UCC-1 Financing Statement
Annex A to UCC-1 Financing Statement
Schedule 2.01 Schedule of Required Governmental Approvals
Schedule 2.15(b) Security Agreement Questionnaire
Schedule 2.15(c) Schedule Of Required Recording And Other Taxes And
Recording, Filing And Other Fees And Charges
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SECURITY AGREEMENT
Dated as of May 14, 1999
In consideration of the execution and delivery of the Credit Agreement
by the Banks listed on the signature pages thereof and CREDIT SUISSE FIRST
BOSTON, as Agent, AEE 2, L.L.C., a Delaware limited liability company, hereby
agrees with CREDIT SUISSE FIRST BOSTON, as Secured Party, as follows (with
certain terms used herein being defined in Article 5):
ARTICLE 1
SECURITY INTEREST
Section 1.01 Grant of Security Interest.
To secure the payment, observance and performance of the Secured
Obligations, the Pledgor hereby mortgages, pledges and assigns the Collateral to
the Secured Party, and grants to the Secured Party a continuing security
interest in, and a continuing lien upon, the Collateral.
Section 1.02 Validity and Priority of Security Interest.
The Pledgor agrees that (a) the Security Interest shall at all times be
valid, perfected and enforceable against the Pledgor and all third parties, in
accordance with the terms hereof, as security for the Secured Obligations, and
(b) the Collateral shall not at any time be subject to any Lien, other than a
Permitted Lien, that is prior to, on a parity with or junior to such Security
Interest, except that, unless a Termination Event exists, this Section 1.02
shall not require the continuation of the perfection of the Security Interest in
Ordinary Distributions that the Pledgor shall, and does, cause the Depositary
Agent to receive and retain pursuant to Section 1.06(a).
Section 1.03 Maintenance of Status of Security Interest, Collateral and
Rights.
(a) Required Action.
The Pledgor shall take all actions, including the action
specified on Schedule 1.03, that may be necessary or desirable, or that the
Secured Party may request, so as at all times (i) to maintain the validity,
perfection, enforceability and priority of the Security Interest in the
Collateral in conformity with the requirements of Section 1.02, (ii) to protect
and preserve the Collateral and (iii) to protect and preserve, and to enable the
exercise or enforcement of, the rights of the Secured Party therein and
hereunder and under the other Collateral Documents.
(b) Authorized Action.
The Secured Party is hereby authorized to file one or more
financing or continuation statements or amendments thereto without the signature
of or in the name of the Pledgor (and the Secured Party shall give notice to the
Pledgor promptly after taking such actions; provided that
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failure to give such notice shall not affect any rights or remedies hereunder).
A carbon, photographic or other reproduction of this Agreement or of any
financing statement filed in connection with this Agreement shall be sufficient
as a financing statement.
Section 1.04 Evidence of Status of Security Interest.
The Pledgor shall from time to time, upon the reasonable request of the
Secured Party, deliver to the Secured Party (a) such file search reports from
such Uniform Commercial Code and other filing and recording offices and (b) such
opinions of counsel relating to the Collateral, the attachment and perfection of
the Security Interest and otherwise to this Agreement, as the Secured Party may
request.
Section 1.05 Pledgor Remains Obligated; Secured Party Not Obligated.
The grant by the Pledgor to the Secured Party of the Security Interest
shall not (a) relieve the Pledgor of any Liability to any Person under or in
respect of any of the Collateral or (b) impose on the Secured Party any such
Liability or any Liability for any act or omission on the part of the Pledgor
relative thereto.
Section 1.06 Pledgor's Limited Rights to Proceeds and Other Collateral.
(a) The Pledgor shall, unless a Termination Event is continuing, cause
the Depository Agent to receive, and unless a Termination Event is continuing,
retain (A) all Account Proceeds and Ordinary Distributions and (B) proceeds of
insurance required to be maintained pursuant to Section 2.04 that aggregate less
than $1,000,000, but only to the extent such insurance proceeds are to be
applied to restore or replace the property damaged. Proceeds of insurance,
required to be maintained pursuant to Section 2.04, that aggregate at least
$1,000,000, shall be held by the Secured Party as Collateral and, unless a
Termination Event is continuing, shall be paid over to the Pledgor from time to
time to be applied to restore or replace property damaged. Any balance of such
proceeds of insurance not used to restore or replace the property damaged shall
be held by the Secured Party as Collateral. Unless an Event of Default is
continuing all instruments, chattel paper, securities, letters of credit and
documents that are Collateral shall be made available to the Pledgor upon
request for purposes of presentation, collection or renewal.
(b) Subject to the Pledgor's rights under Section 1.06(a) and, prior to
a Termination Event, the rights of the Depository Agent under the Depositary
Agreement, the Secured Party shall be entitled to receive and retain all
proceeds of Collateral, including Extraordinary Distributions. Subject to its
rights under Section 1.06(a), the Pledgor shall cause the Depositary to receive
and hold all proceeds of Collateral in trust for the Secured Party, not
commingle the same with other funds or property and, immediately deliver the
same or cause the same to be delivered in the exact form received, together with
any necessary endorsements, to the Secured Party.
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ARTICLE 2
CERTAIN REPRESENTATIONS, WARRANTIES, AND COVENANTS
The Pledgor represents, warrants and covenants as follows:
Section 2.01 Authorization; Enforceability; Required Consents; Absence
of Conflicts.
The Pledgor has the power, and has taken all necessary action to
authorize it, to execute, deliver and perform in accordance with their
respective terms the Collateral Documents. This Agreement has been duly executed
and delivered by the Pledgor and is, and each of the other Collateral Documents
when delivered to the Secured Party will be, the legal, valid and binding
agreement of the Pledgor, enforceable in accordance with its terms, except as
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally or
general principles of equity. The execution, delivery and performance in
accordance with their respective terms by the Pledgor of the Collateral
Documents does not and ( absent any change in any Applicable Law or applicable
Contract) will not (a) require any Governmental Approval or any other consent or
approval, including any consent or approval of any Subsidiary of the Pledgor or
any consent or approval of the member of the Pledgor or any of its Subsidiaries,
other than Governmental Approvals and other consents and approvals that have
been obtained, are final and not subject to review on appeal or to collateral
attack, are in full force and effect and, in the case of any such required under
any Applicable Law or Contract as in effect on the Agreement Date, are listed on
Schedule 2.01, or (b) violate or conflict with, result in a breach of,
constitute a default under, or result in or require the creation of any Lien
(other than the Security Interest) upon any assets of the Pledgor under, (i) any
Contract to which the Pledgor or any of its Subsidiaries is a party or by which
the Pledgor or any of its Subsidiaries or any of their respective properties may
be bound or (ii) any Applicable Law which could reasonably be expected to have a
Materially Adverse Effect on (x) any Loan Document or (y) the Collateral.
Section 2.02 Collateral.
The Pledgor shall (a) have good title to, and be the sole owner of,
each asset that is Collateral, (b) defend the Collateral against the claims and
demands of all third Persons, (c) maintain its chief executive office and, if
different from its chief executive office, each office where the books and
records relating to any Receivables and General Intangibles are kept, only at
and shall keep all tangible property that is Collateral only at or in transit
to, (i) in the case of such chief executive office or other office, the location
thereof specified in, and in the case of any such tangible property, any of the
respective locations therefor specified in, the Questionnaire, or (ii) in any
case, a location of which the Secured Party has received not less than 60 days
prior written notice and which is located within one of the States of the United
States (other than Louisiana), (d) give the Secured Party prompt notice of (i)
the location of each new place of business opened by the Pledgor, (ii) each new
location of any Collateral and (iii) any substantial loss or depreciation in the
value of any of the Collateral, and (e) provide the Secured Party with such
other information as to the Collateral as the Secured Party may request.
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Section 2.03 Preservation of Existence and Properties, Scope of
Business, Compliance with Law, Payment of Taxes and Claims, Preservation of
Enforceability.
Pledgor shall and shall cause the AEE 2 Entities to (a) preserve and
maintain its legal existence and all of its other franchises, licenses, rights
and privileges, (b) preserve, protect and obtain all Intellectual Property, and
preserve and maintain in good repair, working order and condition all other
properties, required for the conduct of its business, including the observation
of the life extension programs of the Additional Facilities, (c) engage only in
businesses in substantially the same fields as the businesses conducted on the
Agreement Date, (d) comply with Applicable Law, (e) pay or discharge when due
all Taxes and all Liabilities that are or could reasonably be expected to become
Liens on any of its properties and (f) take all action and obtain all consents
and Governmental Approvals and make all Governmental Registrations required so
that Pledgor's obligations under this Agreement will at all time be legal, valid
and binding and enforceable in accordance with their respective terms, except
that this Section 2.03 (other than clauses (a), in so far as it requires Pledgor
to preserve its legal existence and requires Pledgor to cause the AEE 2 Entities
to preserve their legal existence, (c) and (f)) shall not apply in any
circumstance where noncompliance, together with all other noncompliances with
this Section 2.03 will not have a Materially Adverse Effect on (x) Pledgor, (y)
the Collateral or (z) the AEE 2 Entities.
Section 2.04 Insurance.
Pledgor shall and shall cause the AEE 2 Entities to maintain insurance
with responsible insurance companies against at least such risks and in at least
such amounts as is customarily maintained by similar businesses, or as may be
required by Applicable Law or reasonably requested by the Required Banks.
Insurance against such risks and in at least such amounts as is required from
time to time under the Leases shall be deemed to be what is "customarily
maintained by similar businesses" for purposes of this Section 2.04 in regards
to the Additional Facilities.
Section 2.05 Use of Proceeds.
Pledgor shall and shall cause the AEE 2 Entities to use the proceeds of
the Loans only to pay Operating and Maintenance Costs. None of the proceeds of
any of the Loans shall be used to purchase or carry, or to reduce or retire or
refinance any credit incurred to purchase or carry, any margin stock (within the
meaning of Regulations U and X of the Board of Governors of the Federal Reserve
System) or to extend credit to others for the purpose of purchasing or carrying
any margin stock. If requested by any Bank, Pledgor shall and shall cause each
of the AEE 2 Entities to complete and sign Part I of a copy of Federal Reserve
Form U-1 referred to in Regulation U and deliver such copy to such Bank.
Section 2.06 Liens.
Pledgor shall not, and shall cause the AEE 2 Entities not to, directly
or indirectly permit to exist, at any time, any Lien upon any of Pledgor's or
the AEE 2 Entities' properties or assets of any character, whether now owned or
hereafter acquired, or upon any income or profits therefrom, except that this
Section 2.06 shall not apply to Permitted Liens.
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Section 2.07 Disposition of Assets.
Pledgor shall not, and shall cause the AEE 2 Entities not to, sell,
lease, license, transfer or otherwise dispose of any asset or any interest
therein, except that this Section 2.07 shall not apply to any disposition of any
obsolete or retired property not used or useful in its business to the extent
that the aggregate Fair Market Value of any such assets, interests or property
so disposed of in any calendar year does not exceed $1,000,000.
Section 2.08 Incurrence of Debt.
Pledgor shall not, and shall cause the AEE 2 Entities not to, incur any
Indebtedness, except that this Section 2.08 shall not apply to the Pledgor or
any AEE 2 Entity in respect of Indebtedness referred to in clause (a) of the
definition of Permitted Indebtedness or the Additional Facilities Mortgage.
Section 2.09 Limitations on Investments.
Pledgor shall not, and shall cause the AEE 2 Entities not to, make or
authorize any investments other than Permitted Investments as set forth in
Section 3.12 of the Depository Agreement.
Section 2.10 Transactions with Affiliates.
Pledgor shall not, and shall cause the AEE 2 Entities not to, effect
any transaction with any Affiliate that is (a) outside the ordinary course of
business or (b) on a basis less favorable than would at the time be obtainable
for a comparable transaction in arms-length dealing with an unrelated third
party.
Section 2.11
(a) Subsidiaries.
Pledgor shall not create, acquire or permit to exist any
Subsidiary other than AES ▇▇▇▇▇▇▇▇ L.L.C. and AES ▇▇▇▇▇▇▇▇▇ L.L.C.
(b) Merger; Consolidation. Pledgor shall not permit any AEE 2
Entity to merge or consolidate with any Person or to liquidate, wind up or
dissolve.
Section 2.12 Additional Facilities.
Pledgor shall and shall cause the AEE 2 Entities to cause each
Additional Facility to be maintained and operated to the same maintenance and
operating standards as AEE is required to maintain and operate ▇▇▇▇▇▇▇ Station
and ▇▇▇▇▇▇▇▇ Station under each Lease as in effect as of the date hereof.
Section 2.13 Limited Liability Company Agreement.
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(a) Pledgor shall comply in all material respects with all the terms
and limitations contained in Pledgor's Limited Liability Company Agreement or
other governing document. (b) Pledgor shall not amend or repeal its Limited
Liability Company Agreement or other governing document without the written
consent of the Secured Party (such consent not to be unreasonably withheld).
Section 2.14 Payment of Operating and Maintenance Costs.
The Pledgor shall not, and shall not permit any AEE 2 Entity to,
commingle monies transferred to it from the Operating Account with any other
monies. The Pledgor shall, and shall cause each AEE 2 Entity to hold all monies
transferred to it from the Operating Account in a separate deposit account in
which only monies transferred from the Operating Account shall be deposited. The
Pledgor shall not and shall not permit any Person to use monies transferred to
it from the Operating Account for any purpose other than to pay Operating and
Maintenance Costs.
Section 2.15 (a) Taxes and Fees.
Except for those specified on Schedule 2.15(a), no recording or other
taxes or recording, filing or other fees or charges are payable in connection
with, arise out of, or are in any way related to, the execution, delivery,
performance, filing or recordation of any of the Collateral Documents or the
creation or perfection of the Security Interest.
(b) Accuracy of Questionnaire. The Questionnaire is, as of the
Agreement Date, complete and correct in all material respects.
ARTICLE 3
EVENT OF DEFAULT
During an Event of Default, and in each such case:
A. Proceeds.
Section 3.01 Application of Proceeds.
Subject to the rights of the Depository Agent prior to a Termination
Event, all cash proceeds received by the Secured Party upon any sale of,
collection of, or other realization upon, all or any part of the Collateral and
all cash held by the Secured Party as Collateral shall, subject to the Secured
Party's right to continue to hold the same as cash Collateral, be applied as
follows:
First: To the payment of all out-of-pocket costs and expenses
incurred in connection with the sale of or other realization upon
Collateral, including attorneys' fees and disbursements;
Second: To the payment of the Secured Obligations owing to the
Secured Party in such order as the Secured Party may elect (with the
Pledgor remaining liable for any deficiency);
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Third: To the payment of the other Secured Obligations (if
any) in such order as the Required Banks may elect (with the Pledgor
remaining liable for any deficiency); and
Fourth: To the extent of the balance (if any) of such
proceeds, to the payment to the Pledgor, subject to Applicable Law and
to any duty to pay such balance to the holder of any subordinate Lien
in the Collateral.
B. Remedies.
Section 3.02
(a) Use of Premises and Intellectual Property.
The Secured Party may (i) enter the Pledgor's premises and,
until the Secured Party completes the enforcement of its rights in the
Collateral, take exclusive possession of such premises or place custodians in
exclusive control thereof, remain on such premises and use the same and all
machinery and equipment for the purpose of (A) completing any work in process,
preparing Collateral for disposition and disposing thereof and (B) collecting
Collateral Obligations, and (ii) in the exercise of its rights under this
Agreement, use the Pledgor's rights in, to and under all patents, trademarks and
copyrights and licenses and sublicenses thereof, to the extent of the rights of
the Pledgor therein, and the Pledgor hereby grants a license to the Secured
Party for such purpose, subject to the consent, if required, of any licensor,
franchisor or other third Person.
(b) Receiver.
The Secured Party may obtain the appointment of a receiver of
the Collateral and the Pledgor consents to and waives any right to notice of
such appointment.
(c) Collection of Collateral Proceeds by Pledgor.
Subject to the rights of the Depository Agent prior to a
Termination Event, the Secured Party may, by notice to the Pledgor, direct it
to, and thereupon the Pledgor shall, receive all proceeds of Collateral in trust
for the Secured Party, not commingle the same with any other property or funds
of the Pledgor and, unless the Secured Party shall have otherwise instructed the
Pledgor, deliver or cause to be delivered all such proceeds in the exact form
received, together with any necessary endorsements, to the Secured Party or to
such Person or Persons as the Secured Party may designate.
(d) Notification.
Subject to the rights of the Depository Agent prior to a
Termination Event, the Secured Party may notify, or request the Pledgor to
notify, in writing or otherwise, each Collateral Debtor to make payment directly
to the Secured Party. If, notwithstanding the giving of any notice, any such
Person shall make payments to the Pledgor, the Pledgor shall hold all such
payments it receives in trust for the Secured Party, without commingling the
same with other funds or property of the Pledgor or any other Person, and shall
deliver the same to the Secured Party immediately upon receipt by the Pledgor in
the identical form received, together with any necessary
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endorsements, subject in such case, to the rights of the Depository Agent prior
to a Termination Event.
(e) Secured Party's Rights with Respect to Proceeds and Other
Collateral.
All payments and other deliveries received by or for the
account of the Secured Party from time to time pursuant to Section 3.03(a) or
(b), together with the proceeds of all other Collateral from time to time held
by or for the account of the Secured Party may, subject in such case, to the
rights of the Depository Agent prior to a Termination Event, at the election of
the Secured Party, (i) be or continue to be held by the Secured Party, or any
Person designated by the Secured Party to receive or hold the same, as
Collateral, (ii) be applied as provided in Section 3.01 or (iii) be disposed of
in accordance with the provisions of this Agreement and Applicable Law.
(f) Enforcement by Secured Party.
The Secured Party may, without notice to the Pledgor and at
such time or times as the Secured Party in its sole discretion may determine,
exercise any or all of the Pledgor's rights in, to and under, or in any way
connected with or related to, any or all of the Collateral.
(g) Adjustments.
Subject to the rights of the Depositary Agent prior to a
Termination Event, the Secured Party may settle or adjust disputes and claims
directly with Collateral Debtors for amounts and on terms that the Secured Party
considers advisable and in all such cases only the net amounts received by the
Secured Party in payment of such amounts, after deduction of out-of-pocket costs
and expenses of collection, including reasonable attorneys' fees, shall be
subject to the other provisions of this Agreement.
(h) Warehousing.
The Secured Party may cause any or all of the Inventory and
the Machinery and Equipment to be placed in a public or field warehouse.
Section 3.03 Instruments and Investment Property Collateral.
In connection with any sale of any instruments or investment
property that are Collateral, the Secured Party may, at its election, comply
with any limitation or restriction (including any restrictions on the number of
prospective bidders and purchasers or any requirement that they have certain
qualifications or that they represent and agree that they are purchasing for
their own account for investment and not with a view to the distribution or
resale of such instruments or investment property) as it may be advised by
counsel is necessary in order to avoid any violation of Applicable Law or to
obtain any Governmental Approval, and such compliance shall not result in such
sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall any Principal be liable nor accountable to the
Pledgor for any discount allowed by reason of the fact that such instruments or
investment property is sold in compliance with any such limitation or
restriction.
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ARTICLE 4
MISCELLANEOUS
Section 4.01 Expenses of Pledgor's Agreements and Duties.
The terms, conditions, covenants and agreements to be observed or
performed by the Pledgor under the Collateral Documents shall be observed or
performed by it at its sole cost and expense.
Section 4.02 Secured Party's Right to Perform on Pledgor's Behalf.
If the Pledgor shall fail to observe or perform any of the terms,
conditions, covenants and agreements to be observed or performed by it under the
Collateral Documents, the Secured Party may (but shall not be obligated to) do
the same or cause it to be done or performed or observed, either in its name or
in the name and on behalf of the Pledgor, and the Pledgor hereby authorizes the
Secured Party so to do.
Section 4.03 Secured Party's Right to Use Agents and to Act in Name of
Pledgor.
The Secured Party may exercise its rights and remedies under the
Collateral Documents through an agent or other designee and, in the exercise
thereof, the Secured Party or any such other Person may act in its own name or
upon an Event of Default in the name and on behalf of the Pledgor.
Section 4.04 No Interference, Compensation or Expense.
The Secured Party may exercise its rights and remedies under the
Collateral Documents (a) without resistance or interference by the Pledgor, (b)
without payment of any rent, license fee or compensation of any kind to the
Pledgor and (c) for the account, and at the expense, of the Pledgor.
Section 4.05 Limitation of Obligations with Respect to Collateral.
(a) Neither the Secured Party nor any other Principal shall
have any obligation to protect or preserve any Collateral or to preserve rights
pertaining thereto other than the obligation to use reasonable care in the
custody and preservation of any Collateral in its actual possession. The Secured
Party shall be deemed to have exercised reasonable care in the custody and
preservation of any Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which the Secured Party accords its own
property. The Secured Party shall be relieved of all responsibility for any
Collateral in its possession upon surrendering it, or tendering surrender of it,
to the Pledgor.
(b) Nothing contained in the Collateral Documents shall be
construed as requiring or obligating the Secured Party or any other Principal,
and neither the Secured Party nor any other Principal shall be required or
obligated, to (i) make any demand, or to make any inquiry as to the nature or
sufficiency of any payment received by it, or to present or file any claim or
notice or take any action, with respect to any Collateral Obligation or any
other Collateral or the monies due or to
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become due thereunder or in connection therewith, (ii) ascertain or take action
with respect to calls, conversions, exchanges, maturities, tenders, offers or
other matters relating to any Collateral, whether or not the Secured Party or
any other Principal has or is deemed to have knowledge or notice thereof, (iii)
take any necessary steps to preserve rights against any prior parties with
respect to any Collateral or (iv) notify the Pledgor of any decline in the value
of any Collateral.
Section 4.06 Rights of Secured Party Under Uniform Commercial Code and
Applicable Law.
The Secured Party shall have, with respect to the Collateral, in
addition to all of its rights and remedies under the Collateral Documents, (a)
the rights and remedies of a secured party under the Uniform Commercial Code,
whether or not the Uniform Commercial Code would otherwise apply to the
Collateral in question, and (b) the rights and remedies of a secured party under
all other Applicable Law.
Section 4.07 Waivers of Rights Inhibiting Enforcement.
The Pledgor waives (a) any claim that, as to any part of the
Collateral, a public sale, should the Secured Party elect so to proceed, is, in
and of itself, not a commercially reasonable method of sale for such Collateral,
(b) the right to assert in any action or proceeding between it and the Secured
Party any offsets or counterclaims that it may have, (c) except as otherwise
provided in any of the Collateral Documents, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE OR JUDICIAL HEARING IN CONNECTION WITH THE SECURED
PARTY'S TAKING POSSESSION OR DISPOSITION OF ANY OF THE COLLATERAL INCLUDING ANY
AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY
SUCH RIGHT THAT THE PLEDGOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY
STATUTE OF THE UNITED STATES OR OF ANY STATE, AND ALL OTHER REQUIREMENTS AS TO
THE TIME, PLACE AND TERMS OF SALE OR OTHER REQUIREMENTS WITH RESPECT TO THE
ENFORCEMENT OF THE SECURED PARTY'S RIGHTS HEREUNDER, (d) all rights of
redemption, appraisement, valuation, stay and extension or moratorium and (e)
all other rights the exercise of which would, directly or indirectly, prevent,
delay or inhibit the enforcement of any of the rights or remedies under the
Collateral Documents or the absolute sale of the Collateral, now or hereafter in
force under any Applicable Law, and the Pledgor, for itself and all who may
claim under it, insofar as it or they now or hereafter lawfully may, hereby
waive the benefit of all such laws and rights.
Section 4.08 Power of Attorney.
(a) In addition to the other powers granted the Secured Party
by the Pledgor under the Collateral Documents, the Pledgor hereby appoints the
Secured Party, and any other Person that the Secured Party may designate, as the
Pledgor's attorney-in-fact to act, in the name, place and stead of the Pledgor
in any way in which the Pledgor itself could do, with respect to each of the
following: (i) endorsing the Pledgor's name on (A) any checks, notes,
acceptances, money orders, drafts or other forms of payment during an Event of
Default, (B) any proxies, documents, instruments, notices, freight bills, bills
of lading or other documents or agreements relating to the Collateral during an
Event of Default, (C) notices of assignment, financing statements and other
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public records; (ii) during an Event of Default claiming for, adjusting, and
instituting legal proceedings to collect, any amounts payable under insurance,
and applicable loss payable endorsements, required to be maintained under any of
the Collateral Documents; (iii) taking any actions or exercising any rights,
powers or privileges that the Pledgor is entitled to take or exercise and that,
under the terms of any of the Collateral Documents, the Secured Party is
authorized to take or exercise; (iv) doing or causing to be done any or all
things necessary or, in the determination of the Secured Party, desirable to
observe or perform the terms, conditions, covenants and agreements to be
observed or performed by the Pledgor under the Collateral Documents and
otherwise to carry out the provisions of the Collateral Documents; and (v)
during an Event of Default, notifying the post office authorities to change the
address for delivery of the Pledgor's mail to an address designated by the
Secured Party, and receiving, opening and disposing of all mail addressed to the
Pledgor (with all mail not constituting, evidencing or relating to the
Collateral to be forwarded by the Secured Party to the Pledgor). The Pledgor
hereby ratifies and approves all acts of the attorney.
(b) To induce any third Person to act under this Section 4.08,
the Pledgor hereby agrees that any third Person receiving a duly executed copy
or facsimile of this Agreement may act under this Section 4.08, and that the
termination of this Section 4.08 shall be ineffective as to such third Person
unless and until actual notice or knowledge of such termination shall have been
received by such third Person, and the Pledgor, on behalf of itself and its
successors and assigns, hereby agrees to indemnify and hold harmless any such
third Person from and against any and all claims that may arise against such
third Person by reason of such third Person having relied on the provisions of
this Section 4.08.
Section 4.09 Termination of Security Interest.
The Security Interest and all of the Pledgor's obligations under
Articles 1, 2 and 3 shall terminate upon the latest of (a) the repayment, to the
extent due, and, to the extent not due, the satisfaction or securing, in a
manner acceptable to the Secured Party, of the Secured Obligations, (b) the
termination of the Commitments, (c) the execution and delivery to the Secured
Party of a release, in form and substance satisfactory to it, of all Loan
Document Related Claims that the Loan Parties may have against the Indemnified
Persons under the facts existing at such time, whether or not known or knowable,
and (d) the discharge, dismissal with prejudice, settlement, release or other
termination of any other Loan Document Related Claims that may be pending or
threatened against the Indemnified Persons.
Section 4.10 Notices.
No notice shall be effective under Section 2.02(c) or 2.02(d), unless
it is specifically designated, in the case of a notice under Section 2.02(c),
"Notice of Change of Executive Office and Books and Records", in the case of a
notice under Section 2.02(d), unless it is specifically designated "Notice of
New Location of Collateral."
Section 4.11 Governing Law.
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The rights and duties of the Pledgor, the Secured Party and the other
Principals under Collateral Documents (including matters relating to the Maximum
Permissible Rate) shall, pursuant to New York General Obligations Law Section
5-1401, be governed by the law of the State of New York.
Section 4.12 LIMITATION OF LIABILITY.
NEITHER THE SECURED PARTY NOR ANY OTHER PRINCIPAL SHALL HAVE ANY
LIABILITY WITH RESPECT TO, AND THE PLEDGOR HEREBY WAIVES, RELEASES AND AGREES
NOT TO ▇▇▇ FOR:
(a) ANY LOSS OR DAMAGE SUSTAINED BY THE PLEDGOR, OR ANY LOSS,
DAMAGE, DEPRECIATION OR OTHER DIMINUTION IN THE VALUE OF ANY COLLATERAL, THAT
MAY OCCUR AS A RESULT OF, IN CONNECTION WITH, OR THAT IS IN ANY WAY RELATED TO,
ANY EXERCISE OF ANY RIGHT OR REMEDY UNDER THE COLLATERAL DOCUMENTS, EXCEPT FOR
ANY SUCH LOSS, DAMAGE, DEPRECIATION OR DIMINUTION TO THE EXTENT THAT THE SAME IS
DETERMINED BY A JUDGMENT OF A COURT THAT IS BINDING ON THE PLEDGOR AND SUCH
PRINCIPAL, FINAL AND NOT SUBJECT TO REVIEW ON APPEAL, TO BE THE RESULT OF ACTS
OR OMISSIONS ON THE PART OF SUCH PRINCIPAL CONSTITUTING (x) WILLFUL MISCONDUCT,
OR (y) GROSS NEGLIGENCE; OR
(b) ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, AND, TO
THE EXTENT PERMITTED UNDER APPLICABLE LAW, PUNITIVE, SUFFERED BY THE PLEDGOR IN
CONNECTION WITH ANY COLLATERAL DOCUMENT RELATED CLAIM.
Section 4.13 Counterparts.
Each Collateral Document may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto were upon the same instrument.
Section 4.14 Entire Agreement.
This Agreement embodies the entire agreement among the Pledgor, the
Secured Party and the Banks relating to the subject matter hereof and supersedes
all prior agreements, representations and understandings, if any, relating to
the subject matter hereof.
Section 4.15 Successors and Assigns.
All of the provisions of each Collateral Document shall be binding upon
and inure to the benefit of the Pledgor, the Secured Party and the other
Principals and their respective successors and assigns.
Section 4.16 Delivery of Opinions Authorized.
The Pledgor hereby acknowledges and agrees that each Person that has
rendered or may render an opinion, report or similar communication, including
legal opinions and accountant's
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reports, to any Person in connection with the Collateral Documents, has been and
is hereby authorized and directed to so deliver such opinion, report or
communication.
ARTICLE 5
INTERPRETATION
Section 5.01 Definitional Provisions.
(a) Certain Terms Defined by Reference.
Except where the context clearly indicates a different meaning, all
terms defined in Article 1, 8 or 9 of the Uniform Commercial Code, as in effect
on the date of this Agreement, are used herein with the meanings therein
ascribed to them; such terms include "account", "chattel paper", "commodity
account", "commodity contract", "control", "deposit account", "document",
"equipment", "financial asset", "general intangibles", "goods", "instrument",
"inventory", "investment property", "money", "proceeds", "securities account",
"security", "security entitlement" and "security interest". In addition, the
terms "account", "collateral" and "security interest", when capitalized, have
the meanings specified in subsection (b) below and the term "deposit account"
includes an account evidenced by a certificate of deposit.
(i) Except in the case of "Agreement", "Agreement Date",
"Collateral", "Intellectual Property", "Permitted Lien",
"Representation and Warranty" and "Security Interest" and as otherwise
specified herein, all terms defined in the Credit Agreement are used
herein with the meanings therein ascribed to them.
(b) Other Defined Terms.
For purposes of this Agreement:
"Account" means a Receivable that represents the right to
payment for goods sold or leased or for services rendered.
"Account Proceeds" means proceeds of an Account.
"Agreement" means this Agreement, including all schedules,
annexes and exhibits hereto.
"Agreement Date" means the date set forth as such on the last
signature page hereof.
"Bank Account" means (i) a deposit, custody, or other account
(whether, in any case, time or demand or interest or non-interest bearing and
whether maintained at a branch or office located within or without the United
States) of the Pledgor with the Secured Party, any other Principal or any
Affiliate of the Secured Party or any other Principal, (ii) all amounts from
time to time credited to such account, (iii) all cash, financial assets and
other investment property, instruments, documents, chattel paper, general
intangibles, accounts and other property from time to time credited to such
account or representing investments and reinvestments of amounts from time
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to time credited to such account and (iv) all interest, principal payments,
dividends and other distributions payable on or with respect to, and all
proceeds of, (A) all property so credited or representing such investments and
reinvestments and (B) such account.
"Collateral" means the Pledgor's interest (WHATEVER IT MAY BE)
in each of the following, IN EACH CASE WHETHER NOW OR HEREAFTER EXISTING OR NOW
OWNED OR HEREAFTER ACQUIRED BY THE PLEDGOR AND WHETHER OR NOT THE SAME IS NOW
CONTEMPLATED, ANTICIPATED OR FORESEEABLE, is subject to Article 8 or 9 of the
Uniform Commercial Code or is Collateral by reason of one or more than one of
the following clauses, AND WHEREVER THE SAME MAY BE LOCATED:
(i) all Receivables;
(ii) all General Intangibles;
(iii) all Inventory;
(iv) all Machinery and Equipment;
(v) all Instruments;
(vi) all Investment Property Collateral;
(vii) all Designated Material Contracts;
(viii) all Bank Accounts;
(ix) all rights (contractual and otherwise and whether
constituting accounts general intangibles or investment property or
other financial assets) constituting, arising under, connected with, or
in any way related to, any or all Collateral;
(x) all books, records, ledgercards, files,
correspondence, computer programs, tapes, disks and related data
processing software (owned by the Pledgor or in which it has an
interest) that at any time evidence or contain information relating to
any Collateral or are otherwise necessary or helpful in the collection
thereof or realization thereupon;
(xi) all goods and other property, whether or not
delivered, (A) the sale, lease or furnishing of which gives or purports
to give rise to any Receivable, including all merchandise returned or
rejected by or repossessed from customers, or (B) securing any
Receivable, including all of the Pledgor's rights as an unpaid vendor
or lienor, including stoppage in transit, replevin and reclamation with
respect to such goods and other properties;
(xii) all documents of title, policies and certificates of
insurance, securities, chattel paper and other documents or instruments
evidencing or pertaining to any Collateral;
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(xiii) all guaranties, Liens on real or personal
property,leases and other agreements and property that in any way
secure or relate to any Collateral, or are acquired for the purpose of
securing and enforcing any item thereof;
(xiv) all claims (including the right to ▇▇▇ or otherwise
recover on such claims) (A) to items referred to in the definition of
Collateral, (B) under warranties relating to any Collateral and (C)
against third parties for (1)(aa) loss, destruction, requisition,
confiscation, condemnation, seizure, forfeiture or infringement of, or
damage to, any Collateral, (bb) payments due or to become due under
leases, rentals and hires of any Collateral, (cc) proceeds payable
under or unearned premiums with respect to policies of insurance
relating to any Collateral and (2) breach of any Contract constituting
Collateral; and
(xv) all products and proceeds of Collateral in whatever
form. The inclusion of "proceeds" of Collateral in the definition of
"Collateral" shall not be deemed a consent by the Secured Party to any
sale or other disposition of any Collateral not otherwise specifically
permitted by the terms hereof.
"Collateral Debtor" means a Person (including an issuer of any
share of capital stock or other unit of ownership interest constituting
Securities and Instrument Collateral) obligated on, bound by, or subject to, a
Collateral Obligation.
"Collateral Documents" means (i) this Agreement and (ii) all
other agreements, documents and instruments related to, arising out of, or in
any way connected with, (A) this Agreement, (B) any other agreement, document or
instrument referred to in this clause (ii), or (C) any of the transactions
contemplated by this Agreement or any such other agreement, document or
instrument, in each case whether now or hereafter executed.
"Collateral Obligation" means a Liability that is Collateral
and includes any such constituting or arising under any Receivable, General
Intangible, Designated Material Contract Instrument or Investment Property
Collateral.
"Credit Agreement" means the Secured Revolving O&M Costs
Facility, dated as of May 14, 1999, among AES Eastern Energy, L.P., the Banks
listed on the signature pages thereof and Credit Suisse First Boston as Agent.
"Commodity Account" means a commodity account.
"Commodity Contract" means a commodity contract.
"Constituent Collateral" means in the case of Collateral that
is Investment Property, Collateral that consists of commodity accounts,
commodity contracts, securities, securities accounts and security entitlements.
"Control Agreement" means, as applied to any Investment
Property, a Contract, in form and substance acceptable to the Secured Party in
its sole and absolute discretion, pursuant to which the Secured Party is granted
control over such Investment Property.
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"Distributions" means Ordinary Distributions and Extraordinary
Distributions.
"Extraordinary Distributions" means (in each case whether or
not in cash) all dividends, interest, principal payments and other distributions
and other payments (including cash and securities payable in connection with
calls, conversions, redemptions and the like) on or in respect of, and all
proceeds (including cash and securities receivable in connection with tender or
other offers) of, Investment Property Collateral other than Ordinary
Distributions.
"General Intangibles" means general intangibles.
"Instrument" means an instrument.
"Intellectual Property" means (i) (A) patents and patent
rights, (B) trademarks, trademark rights, trade names, trade name rights,
corporate names, business names, trade styles, service marks, logos and general
intangibles of like nature, together with, in the case of each item referred to
in or contemplated by clauses (A), (B) or (C), the goodwill of the business
connected with the use of or symbolized by the same, and (C) copyrights, in each
case whether registered, unregistered or under pending registration and, in the
case of any such that are registered or under pending registration, whether
registered or under pending registration under the laws of the United States or
any other country, (ii) reissues, continuations, continuations-in-part and
extensions of any Intellectual Property referred to in clause (i), and (iii)
rights relating to any Intellectual Property referred to in clause (i) or (ii),
including rights under applications (whether pending under the laws of the
United States or any other country) or licenses relating thereto.
"Inventory" means all inventory.
"Investment Property" means investment property.
"Investment Property Collateral" means: (i) (A) all
Securities; (B) all Securities Accounts; (C) all Security Entitlements; (D) all
Commodity Accounts; (E) all Commodity Contracts; (F) all Investment Property;
(ii) all replacements and substitutions for any Investment Property Collateral
that is (whether by virtue of clause (i) or this clause (ii)) Investment
Property Collateral; and (iii) the certificates, if any, representing any of the
foregoing.
"Jurisdiction" means, in the case of a securities
intermediary, its jurisdiction determined in accordance with Section 8-110(e),
and, in the case of a commodity intermediary, its jurisdiction determined in
accordance with Section 9-103(e), of the Uniform Commercial Code.
"Machinery and Equipment" means all equipment wherever located
and whether or not the same are "fixtures".
"Material Contract" means any Contract, whether now or
hereafter existing, that is material to the financial condition, results of
operations or business prospects of the Pledgor and to which the Pledgor is a
party.
"Ordinary Distributions" means cash dividends to the extent
paid out of retained earnings, and interest paid in cash, in each case with
respect to Investment Property Collateral,
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except to the extent that any such dividend is made in connection with partial
or total liquidation or a reduction of capital, or any such interest is penalty
interest, or, in each case, to the extent the same is not in the ordinary
course.
"Permitted Lien" means (i) a Permitted Lien under the Credit
Agreement or (ii) a Lien created in favor of the Secured Party under the
Collateral Documents.
"Pledgor" means AEE 2, L.L.C., a Delaware limited liability
company.
"Principals" means all Persons that are, or at any time were,
the Secured Party, the Agent, a Bank or any other Indemnified Person.
"Questionnaire" means the Questionnaire in the form attached
hereto as Schedule 2.15(b) executed and delivered by the Pledgor to the Secured
Party in connection with this Agreement.
"Receivables" means (i) all accounts and (ii) all other rights
to the payment of money.
"Representation and Warranty" means each representation or
warranty made pursuant to or under (i) Article 2 or any other provision of this
Agreement, (ii) any of the other Collateral Documents or (iii) any amendment to,
or waiver of rights under, this Agreement or any of the other Collateral
Documents, WHETHER OR NOT, IN THE CASE OF ANY REPRESENTATION OR WARRANTY
REFERRED TO IN CLAUSE (i), (ii) OR (iii) OF THIS DEFINITION (EXCEPT, IN EACH
CASE, TO THE EXTENT OTHERWISE EXPRESSLY PROVIDED), THE INFORMATION THAT IS THE
SUBJECT MATTER THEREOF IS WITHIN THE KNOWLEDGE OF THE PLEDGOR.
"Secured Obligations" means all Liabilities of any Loan Party
owing to, or in favor or for the benefit of, or purporting to be owing to, or in
favor or for the benefit of, the Principals under the Loan Documents to which
the Pledgor is a party, in each case (i) WHETHER NOW EXISTING OR HEREAFTER
ARISING OR ACQUIRED, (ii) whether owing to, or in favor or for the benefit of,
or purporting to be owing to, or in favor or for the benefit of, Persons that
are Principals as of the Agreement Date or that become Principals by reasons of
any succession or assignment at any time thereafter and (iii) WHETHER OR NOT AN
ALLOWABLE CLAIM AGAINST THE BORROWER OR ANY OTHER LOAN PARTY UNDER THE
BANKRUPTCY CODE OR OTHERWISE ENFORCEABLE AGAINST ANY SUCH PERSON, AND INCLUDING,
IN ANY EVENT, INTEREST AND OTHER LIABILITIES ACCRUING OR ARISING AFTER THE
FILING BY OR AGAINST ANY SUCH PERSON OF A PETITION UNDER THE BANKRUPTCY CODE OR
THAT WOULD HAVE SO ACCRUED OR ARISEN BUT FOR THE FILING OF SUCH A PETITION.
"Secured Party" means the Agent, acting both on its own behalf
as Agent and as the agent for and representative (within the meaning of Section
9-105(m) of the Uniform Commercial Code) of the other Principals.
"Securities Account" means a securities account.
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"Security" means a security.
"Security Entitlement" means a security entitlement.
"Security Interest" means the mortgages, pledges and
assignments to the Secured Party of, the continuing security interest of the
Secured Party in, and the continuing lien of the Secured Party upon, the
Collateral intended to be effected by the terms of this Agreement or any of the
other Collateral Documents.
"Termination Event" means (i) the termination of each of the
Leases following the occurrence of a Lease Event of Default or (ii) the Secured
Party notifies the Pledgor that pursuant to Section 7.02 of the Credit Agreement
the Commitments have terminated and the Secured Party has elected to exercise
remedies under the Security Agreement or the Pledge Agreement including, but not
limited to, directing the Pledgor to cease making payments to the Depositary
Agent under the Depositary Agreement.
Section 5.02 Other Interpretative Provisions.
(a) Except as otherwise specified herein, all references
herein (i) to any Person shall be deemed to include such Person's successors and
assigns, (ii) to any Applicable Law defined or referred to herein shall be
deemed references to such Applicable Law or any successor Applicable Law as the
same may have been or may be amended or supplemented from time to time and (iii)
to any Loan Document or Contract defined or referred to herein shall be deemed
references to such Loan Document or Contract (and, in the case of any
instrument, any other instrument issued in substitution therefor) as the terms
thereof may have been or may be amended, supplemented, waived or otherwise
modified from time to time.
(b) When used in this Agreement, the words "herein", "hereof"
and "hereunder" and words of similar import shall refer to this Agreement as a
whole and not to any provision of this Agreement, and the words "Article",
"Section", "Annex", "Schedule" and "Exhibit" shall refer to Articles and
Sections of, and Annexes, Schedules and Exhibits to, this Agreement unless
otherwise specified.
(c) Whenever the context so requires, the neuter gender
includes the masculine or feminine, the masculine gender includes the feminine,
and the singular number includes the plural, and vice versa.
(d) Any item or list of items set forth following the word
"including", "include" or "includes" is set forth only for the purpose of
indicating that, regardless of whatever other items are in the category in which
such item or items are "included", such item or items are in such category, and
shall not be construed as indicating that the items in the category in which
such item or items are "included" are limited to such items or to items similar
to such items.
(e) Each power of attorney, license and other authorization in
favor of the Secured Party or any other Person granted by or pursuant to this
Agreement shall be deemed to be irrevocable and coupled with an interest.
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(f) Except as otherwise indicated, any reference herein to the
"Collateral", the "Secured Obligations", the "Loan Documents", the "Collateral
Documents", the "Principals" or any other collective or plural term shall be
deemed a reference to each and every item included within the category described
by such collective or plural term, so that (i) a reference to the "Collateral",
the "Secured Obligations" or the "Principals" shall be deemed a reference to any
or all of the Collateral, the Secured Obligations or the Principals, as the case
may be, and (ii) a reference to the "obligations" of the Loan Parties under the
"Loan Documents" or the "Collateral Documents" shall be deemed a reference to
each and every obligation under each and every Loan Document or Collateral
Document, as the case may be, whether any such obligation is incurred under one,
some or all of the Loan Documents or the Collateral Documents, as the case may
be.
(g) Except where the context clearly indicates a different
meaning, references in this Agreement to Inventory, Machinery and Equipment,
Patents, Patent Licenses, Trademarks, Trademark Licenses, Copyrights, Copyright
Licenses, and other types of property, means the same to the extent they are
Collateral.
(h) Except as otherwise specified therein, all terms defined
in this Agreement shall have the meanings herein ascribed to them when used in
the other Collateral Documents or any certificate, opinion or other document
delivered pursuant hereto or thereto.
Section 5.03 Representations and Warranties.
All Representations and Warranties shall be deemed made (a) in the case
of any Representation and Warranty contained in this Agreement at the time of
its initial execution and delivery, at and as of the Agreement Date, (b) in the
case of any Representation and Warranty contained in this Agreement or any other
document at the time any Loan is made, at and as of such time and (c) in the
case of any particular Representation and Warranty, wherever contained, at such
other time or times as such Representation and Warranty is made or deemed made
in accordance with the provisions of this Agreement or the document pursuant to,
under or in connection with which such Representation and Warranty is made or
deemed made.
Section 5.04 Captions.
Captions to Articles, Sections and subsections of, and Annexes,
Schedules and Exhibits to, the Collateral Documents are included for convenience
of reference only and shall not constitute a part of the Collateral Documents
for any other purpose or in any way affect the meaning or construction of any
provision of the Collateral Documents.
Section 5.05 No Recourse to Affiliates.
This Agreement is solely and exclusively among the Pledgor and the
Secured Party and any obligations created herein shall be the sole obligations
of the parties hereto. No party shall have recourse to any parent, subsidiary,
affiliate, director or officer, as such, of any other party for performance of
said obligations unless the obligations are assumed in writing by the Person
against whom recourse is sought.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers all as of the Agreement Date.
AEE 2, L. L. C.
By
-----------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON
as Secured Party
By
-----------------------------------
Name:
Title:
By
-----------------------------------
Name:
Title:
Agreement Date: May 14, 1999
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Schedule 1.03
SCHEDULE OF REQUIRED ACTION
Pursuant to, and without thereby limiting, its obligations under Section 1.05,
the Pledgor hereby agrees that it will file UCC-1 financing statements
substantially in the form of Schedule 1.03(a).
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Schedule 1.03(a)
STANDARD FORM UCC-1
FINANCING STATEMENT
1. Debtor: [Insert Pledgor's name and address]
2. Secured Party: [Insert Secured Party's name and address]
3. "Collateral" as defined in Annex A attached hereto, whether now or
hereafter existing or now owned or hereafter acquired, including
certain accounts, contract rights and general intangibles; certain
goods, including certain machinery, fixtures and attachments,
accessories, components and parts installed therein or affixed thereto,
finished goods, work-in-process and raw materials; certain investment
property and financial assets; certain instruments; and proceeds of the
foregoing.
Signature Lines:
Debtor: [Insert Pledgor's name]
Secured Party: [Insert Secured Party's name]
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ANNEX A TO UCC-1 FINANCING STATEMENT
DEBTOR: AEE 2, L.L.C.
SECURED PARTY: CREDIT SUISSE FIRST BOSTON
THE TERMS "RECEIVABLES", "GENERAL INTANGIBLES", "INVENTORY", "MACHINERY AND
EQUIPMENT", "INSTRUMENTS", "INVESTMENT PROPERTY COLLATERAL", AND "DESIGNATED
MATERIAL CONTRACTS", AND TERMS USED IN SUCH TERMS, ARE DEFINED IN THE SECURITY
AGREEMENT DATED AS OF MAY 14, 1999 BETWEEN DEBTOR AND SECURED PARTY, AS AMENDED
FROM TIME TO TIME.
COLLATERAL DESCRIPTION
"Collateral" means the Debtor's interest (whatever it may be) in each
of the following, in each case whether now or hereafter existing or now owned or
hereafter acquired by the Debtor and whether or not the same is now
contemplated, anticipated or foreseeable, or is Collateral by reason of one or
more than one of the following clauses, and wherever the same may be located:
(a) all Receivables;
(b) all General Intangibles;
(c) all Inventory;
(d) all Machinery and Equipment;
(e) all Instruments;
(f) all Investment Property Collateral;
(g) all rights (contractual and otherwise and whether
constituting accounts, general intangibles or investment property or other
financial assets) constituting, arising under, connected with, or in any way
related to, any or all Collateral;
(h) all books, records, ledgercards, files, correspondence,
computer programs, tapes, disks and related data processing software (owned by
the Debtor or in which it has an interest) that at any time evidence or contain
information relating to any Collateral or are otherwise necessary or helpful in
the collection thereof or realization thereupon;
(i) all goods and other property, whether or not delivered, (i)
the sale, lease or furnishing of which gives or purports to give rise to any
Receivable, including all merchandise returned or rejected by or repossessed
from customers, or (ii) securing any Receivable, including all
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of the Debtor's rights as an unpaid vendor or lienor, including stoppage in
transit, replevin and reclamation with respect to such goods and other
properties;
(j) all documents of title, policies and certificates of
insurance, securities, chattel paper and other documents or instruments
evidencing or pertaining to any Collateral;
(k) all guaranties, liens on real or personal property, leases
and other agreements and property that in any way secure or relate to any
Collateral, or are acquired for the purpose of securing and enforcing any item
thereof;
(l) all claims (including the right to ▇▇▇ or otherwise recover
on such claims) (i) to items referred to in the definition of Collateral, (ii)
under warranties relating to any Collateral, (iii) against third parties for (A)
(1) loss, destruction, requisition, confiscation, condemnation, seizure,
forfeiture or infringement of, damage to, (2) payments due or to become due
under leases, rentals or hires of, and (3) proceeds payable under or unearned
premiums with respect to policies of insurance relating to, any Collateral and
(B) breach of any Contract constituting Collateral; and
(m) all products and proceeds of Collateral in whatever form.
Some of the Collateral may be located at: [Insert locations of
Collateral]
2
30
Schedule 2.01
SCHEDULE OF REQUIRED CONSENTS AND GOVERNMENTAL APPROVALS
NONE
31
Schedule 2.15(b)
SECURITY AGREEMENT QUESTIONNAIRE
The undersigned (the "Pledgor") is entering into a Security Agreement with
Credit Suisse First Boston, as Agent. In connection with the Security Agreement
the Pledgor is required to answer the following questions.
1 What is the Pledgor's exact legal name as it appears in its
organizational certificate?
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2 Has the Pledgor ever changed its name? If so, state each other name the
Pledgor has had.
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3a Does the Pledgor do business under any other name? If so, state each
such name.
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b. Does the Pledgor use or has the Pledgor used any trade names or trade
styles? If so, list each of them.
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c. If the Pledgor has at any time during the preceding five years done
business under any name or used any trade name or trade style not
listed under a. or b., list each such name or style.
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32
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4. Attach hereto the forms of all invoices used by the Pledgor at any time
within the immediately preceding 5 years, and indicate which of such
forms are currently being used.
5. Has the Pledgor changed its identity or legal structure in any way
within the past four months? Changes in legal structure would include
incorporation of a partnership or sole proprietorship, reorganization
in a different state, mergers, consolidations and acquisitions. If any
such change has taken place, indicate the nature of such change and
give the names of each corporation or other entity that was
incorporated, merged or consolidated with or acquired by the Pledgor in
such transaction (including each name under which each such corporation
or entity has done business) and the address of each place of business
of each such corporation or entity immediately prior to such
incorporation, merger, consolidation or acquisition and within four
months prior to the date of this Questionnaire.
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6a. State the complete address (including the county) of the Pledgor's
chief executive office and, if different from its chief executive
office, of the office where the Pledgor keeps its books and records
relating to its accounts or contract rights, specifying in each case
whether such location is owned or leased by Pledgor and, if leased,
specifying the name and address of the
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b. If the Pledgor maintains any records relating to any of the Collateral
with an independent computer service firm or the like specify the
address (including the county) of each such Person.
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7.
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33
Has the Pledgor's chief executive office or office where the Pledgor
keeps its books and records relating to its accounts or contract rights
been located at any other address (including that of any independent
computer service firm or the like) during the past four months? If so,
specify each such address (including the county) and whether such
location was owned or leased by Pledgor and, if leased, specifying the
name and address of the landlord.
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8. State the complete address (including the county) of each other place
of business that the Pledgor presently has, specifying in each case
whether such location is owned or leased by Pledgor and, if leased,
specifying the name and address of the landlord.
9. State the complete address (including the county) of each place of
business that the Pledgor has had in the past four months, other than
those listed in the answers to questions 6, 7, and 8, specifying in
each case whether such location was owned or leased by Pledgor and, if
leased, specifying the name and address of the landlord.
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10. State the complete address (including the county) of each location
where the Pledgor keeps any inventory or machinery and equipment,
specifying (a) in each case whether such location is owned or leased by
Pledgor and, if leased, specifying the name and address of the landlord
and (b) the approximate book value of the (i) inventory and (ii)
machinery and equipment maintained at each such location.
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11. Has any of the Pledgor's inventory or machinery and equipment been
located during the past four months at any location other than the
locations listed in the answers to questions 6, 7, 8, 9 and 10? If so,
state the complete address (including the county) of each such
location, specifying in each case whether such location was owned or
leased by Pledgor and, if leased, specifying the name and address of
the landlord.
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3
34
12. Does any person or entity other than the Pledgor have possession of any
of the Pledgor's inventory or machinery and equipment? If so, state the
name and address (including the county) of each such person or entity,
specifying in each case whether such location is owned or leased by
Pledgor and, if leased, specifying the name and address of the
landlord.
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13. When the Pledgor purchases goods, are there any places in which such
goods might in the usual course of the purchase transaction be located,
even temporarily for purposes of transshipment? If so, state the
complete address (including the county) of each such location.
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14. Has the Pledgor acquired any of its inventory or machinery and
equipment otherwise than in the ordinary course of business? (For this
purpose, acquisitions not in the ordinary course of business include,
BUT ARE NOT LIMITED TO, acquisitions from persons other than the
manufacturer.) If so, specify the nature of any such acquisition.
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15a. Does the Pledgor own or have an interest in any goods other than
inventory or machinery and equipment, such as crops, minerals or the
like? If so please describe such goods and state the complete address
(including the county) where such goods are located.
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b. State the respective aggregate book values of so much of the Pledgor's
machinery and equipment as consists of (i) airplanes, (ii) automotive
equipment, (iii) ships and other vessels and (iv) railroad locomotives
and rolling stock.
4
35
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
16a. Are any of the Pledgor's accounts receivables payable by United States
Government or any department or agency thereof? If so, please state the
aggregate amount thereof and the percentage that those accounts
receivables are of all of the Pledgor's accounts receivables, in each
case as of a recent, specified date.
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b. Is any of the Pledgor's inventory subject to a claim under any contract
with the United States Government or any department or agency thereof
that title to such inventory has vested in such person by virtue of
progress payments? If so, please state the aggregate amount thereof and
the percentage that that inventory is of all of the Pledgor's
inventory, in each case as of a recent, specified date.
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c. Does any of the Pledgor's inventory consist of perishable agricultural
commodities and products subject to the trust imposed by the Perishable
Agricultural Commodities Act? If so, please state the aggregate amount
thereof and the percentage that that inventory is of all of the
Pledgor's inventory, in each case as of a recent, specified date.
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d. Does any of the Pledgor's inventory consist of livestock or meat, meat
food products or livestock products derived therefrom subject to the
trust imposed by the Packers and Stockyards Act? If so, please state
the aggregate amount thereof and the percentage that that inventory is
of all of the Pledgor's inventory, in each case as of a recent,
specified date.
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5
36
17a. Please supply the following information with respect to each patent and
patent application in which the Pledgor has any interest (whether as
owner, licensee or otherwise):
Patents
Nature of Interest (e.g., Registered Patent No. Issue Date Country of Issue
owner, licenses)
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-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
Patent Applications
Nature of Interest (e.g., Serial No. Filing Date Country of Issue
owner, licensee)
-------------------------------------------------------------------------------------------------------------------------
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b. If the Pledgor's interest in any of the foregoing is otherwise than as
owner, please describe the nature of such interest.
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18a. Please supply the following information with respect to each registered
trademark and trademark application in which the Pledgor has any
interest (whether as owner, licensee or otherwise):
Registered Trademarks
6
37
Nature of Registered Registration Class Covered Int'l Services Goods or Date Country of
Interest (e.g., Trademark No. Covered Registered Registration
owner, licensee)
-------------------------------------------------------------------------------------------------------------------------
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Trademark Applications
Nature of Interest Trademark Serial No. Int'l Class Goods or Services Country of
(e.g., owner, Application Covered Covered Application
licensee) relates to
following
Trademark
-------------------------------------------------------------------------------------------------------------------------
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b. If the Pledgor's interest in any of the foregoing is otherwise than as
owner, please describe the nature of such interest.
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1a. Please supply the following information with respect to each copyright
and copyright application in which the Pledgor has any interest
(whether as owner, licensee or otherwise):
Copyrights
Nature of Copyright Copyright No. Property Date of Docket No. Country of
Interest (e.g., Covered Copyright Registration
owner, licensee)
-------------------------------------------------------------------------------------------------------------------------
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7
38
b. If the Pledgor's interest in any of the foregoing is otherwise than as
owner, please describe the nature of such interest.
20 Does the Pledgor have any existing lockbox arrangements? If so, please
identify each bank or other entity with which any such arrangement is
maintained.
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21. State the following information, in each case as of the Agreement Date,
with respect to each security that is to be Securities and Instrument
Collateral on the Agreement Date.
Issuer Debt or Equity Certificated or Class or Number of Shares Percent of
Uncertificated Series of Principal Outstanding
Amount Owned Class or Series
8
39
22. State the following information, in each case as of the Agreement Date,
with respect to each instrument that is to be Securities and Instrument
Collateral on the Agreement Date.
Maker or Drawer Certificated or Class or Principal Amount Percent of
Uncertificated Series Owed Outstanding Class
or Series
23. State the following information, in each case as of the Agreement Date,
with respect to each securities account that is to be Securities and
Instrument Collateral on the Agreement Date.
Securities Intermediary's Name and
Jurisdiction (Determined Under Uniform
Account No. Commercial Code Section 8-110(e))
24. State the following information, in each case as of the Agreement Date,
with respect to each security entitlement that is to be Securities and
Instrument Collateral on the Agreement Date.
Securities Intermediary Financial Asset(s)
% on
Agreement
Class No. of Shares Date of
or or Outstanding
Issuer Series Principal Amt. Class or Series
1(a) Name: [Insert here name of applicable
Securities Intermediary]
Security Account(s):
No _____
No _____
(b) Jurisdiction: [Insert here Securities Intermediary's Jurisdiction
(Determined Under Uniform Commercial
9
40
Code Section 8-110(e))]
2(a) Name: [Insert here name of applicable
Securities Intermediary]
Security Account(s):
No _____
No _____
(b) Jurisdiction: [Insert here Securities Intermediary's Jurisdiction
(Determined Under Uniform Commercial
Code Section 8-110(e))]
25. State the following information, in each case as of the Agreement Date,
with respect to each commodity account that is to be Securities and
Instrument Collateral on the Agreement Date.
Commodity Intermediary's Name and Jurisdiction
(Determined Under Uniform Commercial Code Section
Account No. 9-103(e))
26. State the following information, in each case as of the Agreement Date,
with respect to each commodity contract that is to be Securities and
Instrument Collateral on the Agreement Date.
Commodity Intermediary's Name and Jurisdiction
(Determined Under Uniform Commercial Code Section
9-103(e)) If Commodity Contract Is Maintained With
Description of Commodity Contract Such Commodity Intermediary
The Pledgor hereby certifies that its answers to the foregoing
questions are complete and correct and confirms that such answers
constitute representations and warranties under the Security Agreement.
Date: _______________, 19___
Pledgor:
By _________________________
Name:
Title:
10
41
Schedule 2.15(c)
SCHEDULE OF REQUIRED RECORDING AND OTHER TAXES
AND RECORDING, FILING AND OTHER FEES AND CHARGES
UCC filing fees
42
AES EASTERN ENERGY, L.P.
REGISTRATION RIGHTS AGREEMENT
May 11, 1999
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
CIBC World Markets Corp.
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
AES Eastern Energy, L.P., a Delaware limited partnership (the "Company"),
proposes to issue and sell jointly and severally to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated, Credit Suisse First Boston Corporation and CIBC World Markets
Corp. (collectively, the "Initial Purchasers"), on the terms set forth in a
purchase agreement of even date herewith (the "Purchase Agreement"),
$282,000,000 aggregate principal amount of Pass Through Certificates, Series
1999-A and $268,000,000 aggregate principal amount of Pass Through Certificates,
Series 1999-B (collectively, the "Certificates"). The Certificates will be
issued pursuant to two Pass Through Trust Agreements, each dated as of May 1,
1999 (the "Pass Through Trust Agreements") between the Company and Bankers Trust
Company, a New York banking corporation, as Pass Through Trustee (the
"Trustee").
As an inducement to the Initial Purchasers to enter into the Purchase
Agreement and in satisfaction of a condition to the Initial Purchasers'
obligations thereunder, the Company agrees with the Initial Purchasers, for the
benefit of the registered holders of the Certificates (including, without
limitation, the Initial Purchasers) and the Exchange Certificates (as defined
below) (collectively, the "Holders"), as follows:
Registered Exchange Offer.
The Company shall prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement (the "Exchange Offer
Registration Statement") on an appropriate form under the Securities Act of
1933, as amended (the "Securities Act"), with respect to an offer (the
"Registered Exchange Offer") to the Holders of Transfer Restricted Certificates
(as defined in Section 6(d) hereof), who are not prohibited by any law or policy
of the Commission from participating in the Registered Exchange Offer, to issue
and deliver to such Holders, in exchange for the Certificates of each series, a
like aggregate principal amount of pass through trust certificates (the
"Exchange Certificates") of the Company issued under the Pass Through Trust
Agreements and identical in all material respects to the Certificates of that
series and that will be registered under the Securities Act. The Company shall
use its best efforts to cause the Exchange Offer Registration Statement to
become effective under the Securities Act within 150 days after the date of
original issue of the Certificates and shall keep the Exchange
43
Offer Registration Statement effective for not less than 30 days (or longer, if
required by applicable law) after the date on which notice of the Registered
Exchange Offer is mailed to the Holders (that period being called the "Exchange
Offer Registration Period").
If the Company effects the Registered Exchange Offer, the Company will be
entitled to close the Registered Exchange Offer at the close of business on the
30th day after the commencement thereof if the Company has accepted all the
Certificates validly tendered by such 30th day in accordance with the terms of
the Registered Exchange Offer.
Following the declaration of the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Registered
Exchange Offer, it being the objective of the Registered Exchange Offer to
enable each Holder of Transfer Restricted Certificates electing to exchange
those Transfer Restricted Certificates for Exchange Certificates (assuming that
Holder is not an affiliate of the Company within the meaning of the Securities
Act, acquires the Exchange Certificates in the ordinary course of that Holder's
business and has no arrangement with any person to participate in the
distribution of the Exchange Certificates, and is not prohibited by any law or
policy of the Commission from participating in the Registered Exchange Offer) to
trade those Exchange Certificates from and after their receipt without any
limitations or restrictions under the Securities Act and without material
restrictions under the securities laws of the several states of the United
States. In connection with the Registered Exchange Offer, the Company shall use
its best efforts to consummate the Registered Exchange Offer and shall comply
with the applicable requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and other applicable laws and regulations in
connection with the Registered Exchange Offer; provided, however, that if there
are fewer than 300 holders of record of the Certificates at the beginning of the
calendar year 2000, the Company currently contemplates suspending its Exchange
Act reporting obligations early in calendar year 2000 (if such condition is not
met at the beginning of calendar year 2000, the Company would suspend its
reporting obligations at the beginning of the first year in which such condition
is met).
The Company acknowledges that, pursuant to current interpretations by the
Commission's staff of Section 5 of the Securities Act, in the absence of an
applicable exemption therefrom, (a) each Holder that is a broker-dealer electing
to exchange Certificates, acquired for its own account as a result of
market-making activities or other trading activities, for Exchange Certificates
(an "Exchanging Dealer"), is required to deliver a prospectus containing the
information set forth in Annex A hereto on the cover, in Annex B hereto in the
"Exchange Offer Procedures" section and the "Purpose of the Exchange Offer"
section, and in Annex C hereto in the "Plan of Distribution" section, in
connection with a sale of any such Exchange Certificates received by that
Exchanging Dealer pursuant to the Registered Exchange Offer, and (b) if the
Initial Purchasers are permitted to and elect to sell Exchange Certificates
acquired in exchange for Certificates constituting any portion of an unsold
allotment, they are required to deliver a prospectus containing the information
required by Item 507 or 508 of Regulation S-K under the Securities Act, as
applicable, in connection with that sale.
The Company shall include in the prospectus contained in the Exchange
Offer Registration Statement a section titled "Plan of Distribution," reasonably
acceptable to the Initial Purchasers, that contains a summary statement of the
positions taken or policies made by the staff of the
2
44
Commission with respect to the potential "underwriter" status of any
broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) of Exchange Certificates received by that broker-dealer in the
Registered Exchange Offer (a "Participating Broker-Dealer"), whether those
positions or policies have been publicly disseminated by the staff of the
Commission or, in the reasonable judgment of the Initial Purchasers based on
advice of counsel (which may be in-house counsel), represent the prevailing
views of the staff of the Commission.
The Company shall use its best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the prospectus
contained therein, in order to permit that prospectus to be lawfully delivered
by the Initial Purchasers and all Exchanging Dealers subject to the prospectus
delivery requirements of the Securities Act, and shall make that prospectus
available to the Initial Purchasers and those Exchanging Dealers for such period
of time after the consummation of the Registered Exchange Offer as those persons
must comply with those requirements in order to resell the Exchange
Certificates; however, that period shall not exceed 120 days (unless extended
pursuant to Section 3(j) below), and those persons are not authorized by the
Company to deliver and shall not deliver any such prospectus after the
expiration of that period in connection with the resales contemplated by this
paragraph.
The Company shall make available for a period of 120 days after the
consummation of the Registered Exchange Offer a copy of the prospectus, and any
amendment or supplement thereto, forming part of the Exchange Offer Registration
Statement, to any broker-dealer for use in connection with any resale of any
Exchange Certificates. The Certificates and the Exchange Certificates are herein
collectively called the "Securities."
In connection with the Registered Exchange Offer, the Company shall:
mail to each Holder a copy of the prospectus forming part of
the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
keep the Registered Exchange Offer open for not less than 30
days (or longer, if required by applicable law) after the date notice
thereof is mailed to the Holders;
utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan, The City of
New York, which may be the Trustee or an affiliate of the Trustee;
permit Holders to withdraw tendered Certificates at any time
prior to the close of business, New York time, on the last business day on
which the Registered Exchange Offer remains open; and
otherwise comply in all material respects with all
applicable laws.
As soon as practicable after the close of the Registered Exchange
Offer, the Company shall:
3
45
accept for exchange all the Certificates validly tendered
and not withdrawn pursuant to the Registered Exchange Offer;
deliver, or cause to be delivered, to the Trustee for
cancellation all the Certificates so accepted for exchange; and
issue, and cause the Trustee to authenticate and deliver
promptly to each Holder of the Certificates of either series, Exchange
Certificates of the same series, equal in principal amount to the
Certificates of that series of that Holder so accepted for exchange.
The Pass Through Trust Agreements will provide that the Exchange
Certificates will not be subject to the transfer restrictions set forth in the
Pass Through Trust Agreements and that the Certificates and the Exchange
Certificates will vote and consent together on all matters as one class and not
as separate classes on any matter.
Interest on each Exchange Certificate issued pursuant to the Registered
Exchange Offer will accrue from the last interest payment date on which interest
was paid on the Certificates surrendered in exchange therefor or, if no interest
has been paid on those Certificates, from the date of original issue of those
Certificates.
Each Holder participating in the Registered Exchange Offer will be
required to represent to the Company at the time of the consummation of the
Registered Exchange Offer:
(a) that any Exchange Certificate received by that Holder will be
acquired in the ordinary course of business;
(b) that the Holder will have no arrangement or understanding with
any person to participate in the distribution of the Certificates or the
Exchange Certificates within the meaning of the Securities Act;
(c) that the Holder is not an "affiliate," as defined in Rule 405 of
the Securities Act, of the Company or if it is an affiliate, that Holder
will comply with the registration and prospectus delivery requirements of
the Securities Act to the extent applicable;
(d) if that Holder is not a broker-dealer, that it is not engaged
in, and does not intend to engage in, any distribution of the Exchange
Certificates; and
(e) if that Holder is a broker-dealer, that it will receive Exchange
Certificates for its own account in exchange for Certificates that were
acquired as a result of market-making activities or other trading
activities and that it will deliver a prospectus in connection with any
resale of those Exchange Certificates.
Notwithstanding any other provision hereof, the Company will ensure that
(a) any Exchange Offer Registration Statement and any amendment thereto and any
prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations
thereunder, (b) any Exchange Offer Registration Statement and any
4
46
amendment thereto will not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (c) any prospectus
forming part of any Exchange Offer Registration Statement, and any supplement to
that prospectus, at the time of issuance will not include an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that with respect to clauses (b) and (c), the Company will not be liable for
written information relating to any Holder or Initial Purchaser furnished to the
Company by or on behalf of such Holder or Initial Purchaser specifically for
inclusion therein.
Shelf Registration.
If (a) the Company determines that a Registered Exchange Offer, as
contemplated by Section 1 hereof, is not available or may not be consummated as
soon as practicable after the last date the Registered Exchange Offer is open
because it would violate applicable law or the applicable interpretations of the
staff of the Commission, (b) the Registered Exchange Offer is not consummated
within 180 days after the date of original issue of the Transfer Restricted
Certificates, (c) the Initial Purchasers of the Transfer Restricted Certificates
so request with respect to the securities not eligible to be exchanged for
Exchange Certificates in the Registered Exchange Offer and held by them
following consummation of the Registered Exchange Offer, or (d) any Holder
(other than an Exchanging Dealer) is not eligible to participate in the
Registered Exchange Offer, or any Holder (other than an Exchanging Dealer) that
participates in the Registered Exchange Offer does not receive freely tradeable
Exchange Certificates on the date of the exchange for validly tendered (and not
withdrawn) Transfer Restricted Certificates:
The Company shall use its reasonable best efforts to prepare
and file, as promptly as practicable, with the Commission and thereafter
to cause to be declared effective a registration statement (the "Shelf
Registration Statement" and, together with the Exchange Offer Registration
Statement, a "Registration Statement") on an appropriate form under the
Securities Act relating to the offer and sale of the Transfer Restricted
Certificates, by the Holders thereof from time to time in accordance with
the methods of distribution set forth in the Shelf Registration Statement
and Rule 415 under the Securities Act (hereinafter, the "Shelf
Registration"), but no Holder (other than the Initial Purchasers) is
entitled to have any Transfer Restricted Certificates held by it covered
by that Shelf Registration Statement unless that Holder agrees in writing
to be bound by all the provisions of this Agreement applicable to that
Holder; and provided, however, that with respect to Exchange Certificates
which are attributable to Certificates constituting any portion of an
unsold allotment held by an Initial Purchaser, the Company may, if
permitted by current interpretations of the Commission's staff and, in the
opinion of the Company's counsel, sufficient to cause the Exchange
Certificates to be freely tradeable by such Initial Purchaser, file a
post-effective amendment to the Exchange Offer Registration Statement
containing the information required by Items 507 and 508 of Regulation
S-K, as applicable, in satisfaction of its obligations under this
subsection with respect thereto, and any such Exchange Offer Registration
Statement, as so amended, shall be referred to
5
47
herein as, and governed by the provisions herein applicable to, a Shelf
Registration Statement.
The Company shall use all reasonable efforts to keep the
Shelf Registration Statement continuously effective in order to permit the
prospectus included therein to be lawfully delivered by the Holders of the
relevant Securities, until the earlier of (A) the end of the period
referred to in Rule 144(k) under the Securities Act after the original
issue date of the Certificates expires (or the end of such longer period
as may result from an extension pursuant to Section 3(j) below), provided
that, if this clause (A) is relied upon, counsel to the Company shall have
delivered to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Co. Incorporated, an opinion to the effect
that the Certificates included in such Shelf Registration Statement will
thereafter be freely tradeable by the Holders thereof without restriction,
and (B) the date on which all the Securities covered by the Shelf
Registration Statement have been sold pursuant thereto. Such period is
hereinafter referred to as the "Shelf Registration Period."
Notwithstanding any provision of this Agreement to the
contrary, the Company shall cause the Shelf Registration Statement and the
related prospectus and any amendment or supplement thereto, as of the
effective date of the Shelf Registration Statement, amendment or
supplement, (A) to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission and (B) not to contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that with respect to clause (B), the Company will not be liable
for written information relating to any Holder or Initial Purchaser
furnished to the Company by or on behalf of such Holder or Initial
Purchaser specifically for inclusion therein.
Registration Procedures.
In connection with any Shelf Registration contemplated by Section 2 hereof
and, to the extent applicable, any Registered Exchange Offer contemplated by
Section 1 hereof, the following provisions shall apply:
The Company shall (i) furnish to the Initial Purchasers, prior
to the filing thereof with the Commission, a copy of the Registration Statement
and each amendment thereof and each supplement, if any, to the prospectus
included therein and shall not file any such Registration Statement or amendment
thereto or any prospectus or any supplement thereto (including any document
that, upon filing, would be incorporated or deemed to be incorporated by
reference therein and any amendment to any such document other than documents
required to be filed pursuant to the Exchange Act) to which the Initial
Purchasers shall reasonably object, except for any Registration Statement or
amendment thereto or prospectus or supplement thereto (a copy of which has been
previously furnished to the Initial Purchasers and their counsel (and, in the
case of a Shelf Registration Statement, the Holders and their counsel)) which
counsel to the Company has advised the Company in writing is required to be
filed, notwithstanding any such objection, in order to comply with applicable
law, (ii) include information substantially to the
6
48
effect set forth (A) in Annex A hereto on the cover, (B) in Annex B hereto in
the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer"
section, (C) in Annex C hereto in the "Plan of Distribution" section, of the
prospectus forming a part of the Exchange Offer Registration Statement, and (D)
include the information set forth in Annex D hereto in the Letter of Transmittal
delivered in connection with the Registered Exchange Offer, (iii) to the extent
required by law or interpretation of the staff of the Commission, if requested
by the Initial Purchasers, include the information required by Item 507 or 508
of Regulation S-K under the Securities Act, as applicable, in the prospectus
forming a part of the Exchange Offer Registration Statement, and (iv) to the
extent required by law or interpretation of the staff of the Commission, in the
case of a Shelf Registration Statement, include the names of the Holders who
propose to sell Securities pursuant to the Shelf Registration Statement as
selling securityholders.
The Company shall notify promptly the Initial Purchasers, the
Holders and any Participating Broker-Dealer from whom the Company has received
prior written notice stating that it will be a Participating Broker-Dealer in
the Registered Exchange Offer (which notice pursuant to clauses (ii) through (v)
hereof shall be accompanied by an instruction to suspend the use of the
prospectus until the requisite changes have been made) and, if requested by the
Initial Purchasers, the Holders or any such Participating Broker-Dealer, confirm
such notice in writing:
when the Registration Statement or any amendment thereto has
been filed with the Commission and when the Registration Statement or any
post-effective amendment thereto has become effective;
of any request by the Commission for an amendment or
supplement to the Registration Statement or the prospectus included
therein or for additional information;
of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceeding for that purpose;
of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening
of any proceeding for that purpose;
of the happening of any event that requires the Company to
make changes in the Registration Statement or the prospectus in order that
the Registration Statement or the prospectus does not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; and
of any determination by the Company that a post-effective
amendment to a Registration Statement would be appropriate.
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49
The Company shall make every reasonable effort to prevent the
issuance, and if issued to obtain the withdrawal at the earliest possible time,
of any order suspending the effectiveness of the Registration Statement and
shall provide prompt written notice to the Initial Purchasers and each Holder of
the withdrawal of any such order.
The Company shall furnish to each Holder of Securities included
in the Shelf Registration, without charge, at least one conformed copy of the
Shelf Registration Statement and any post-effective amendment thereto, including
financial statements and schedules (without documents incorporated therein by
reference or exhibits thereto, unless a Holder so requests in writing).
The Company shall deliver to the Initial Purchasers, and to any
other Holder that so requests, without charge, at least one conformed copy of
the Exchange Offer Registration Statement and any post-effective amendment
thereto, including financial statements and schedules (without documents
incorporated therein by reference or exhibits thereto, unless any such Holder or
the Initial Purchasers so request in writing).
The Company shall deliver to each Holder of Securities included
in the Shelf Registration, without charge, as many copies of the prospectus
(including each preliminary prospectus) included in the Shelf Registration
Statement and any amendment or supplement thereto as that Holder may reasonably
request during the Shelf Registration Period. The Company consents, subject to
the provisions of this Agreement, to the use of the prospectus or any amendment
or supplement thereto by each of the selling Holders of the Securities in
connection with the offering and sale of the Securities covered by, and as
contemplated by, the prospectus, or any amendment or supplement thereto,
included in the Shelf Registration Statement.
The Company shall deliver to each Initial Purchaser, any
Participating Broker-Dealer and any Exchanging Dealer, without charge, as many
copies of the final prospectus included in the Exchange Offer Registration
Statement and any amendment or supplement thereto as that person or entity may
reasonably request, during a period not exceeding 120 days following the
consummation of the Registered Exchange Offer. The Company consents, subject to
the provisions of this Agreement, to the use of the prospectus or any amendment
or supplement thereto by the Initial Purchasers, if necessary, any Participating
Broker-Dealer and any Exchanging Dealer and such other persons as may be
required to deliver a prospectus following the Registered Exchange Offer in
connection with the offering and sale of the Exchange Certificates covered by
the prospectus, or any amendment or supplement thereto, included in the Exchange
Offer Registration Statement, but no such person or entity is authorized by the
Company to deliver and no such person or entity shall deliver any such
prospectus after the expiration of the period referred to in the immediately
preceding sentence, in connection with any resale contemplated by this
paragraph.
Prior to any public offering of Securities pursuant to any
Registration Statement, the Company shall use its reasonable best efforts to
register or qualify or cooperate with the Holders of the Securities included
therein and their respective counsel in connection with the registration or
qualification of the Securities for offer and sale under the securities or Blue
Sky
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50
laws of such states of the United States as any Holder of the Securities
reasonably requests in writing and shall do any and all other acts or things
necessary or advisable to enable that Holder to offer and sell in such
jurisdictions the Securities covered by that Registration Statement owned by
that Holder, but the Company is not required to (i) qualify generally or as a
foreign corporation to do business in any jurisdiction where it is not then so
qualified or (ii) take any action which would subject it to general service of
process or to taxation in any jurisdiction where it is not then so subject.
The Company shall cooperate with the Holders of the Securities
to facilitate the timely preparation and delivery of certificates representing
the Securities to be sold pursuant to any Shelf Registration Statement free of
any restrictive legend and in such denominations (consistent with the provisions
of the Pass Through Trust Agreements) and registered in such names as the
Holders may request at least two business days prior to closing of any sale of
the Securities pursuant to such Shelf Registration Statement.
If any event contemplated by paragraphs (ii) through (vi) of
Section 3(b) above occurs during the period in which the Company is required to
maintain an effective Registration Statement, the Company shall promptly prepare
and file a post-effective amendment to the Registration Statement or a
supplement to the related prospectus and any other required document so that, as
thereafter delivered to Holders of the Certificates or purchasers of Securities,
the prospectus will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. If the Company notifies the Initial Purchasers, the
Holders of the Securities and any known Participating Broker-Dealer in
accordance with paragraphs (ii) through (vi) of Section 3(b) above to suspend
the use of the prospectus until the requisite changes to the prospectus have
been made, then the Initial Purchasers, the Holders of the Securities and any
such Participating Broker-Dealer shall suspend use of that prospectus until the
Company has amended or supplemented the prospectus to correct that misstatement
or omission, and the period of effectiveness of the Shelf Registration Statement
provided for in Section 2(b) above and the Exchange Offer Registration Statement
provided for in Section 1 above shall each be extended by the number of days
from and including the date of the giving of that notice to and including the
date when the Initial Purchasers, the Holders of the Securities and any known
Participating Broker-Dealer shall have received that amended or supplemented
prospectus pursuant to this Section 3(j), but the minimum time period before the
Company is entitled to close the Registered Exchange Offer will be extended only
to the extent required by the Commission. Each Initial Purchaser, Holder and
Participating Broker-Dealer agrees that on receipt of any such notice from the
Company it will not distribute copies of the prospectus that are the subject of
that notice and will retain those copies in its files.
Not later than the effective date of the applicable Registration
Statement, the Company will obtain a CUSIP number for each series of the
Transfer Restricted Certificates or the Exchange Certificates, as the case may
be, and provide the Trustee with printed certificates for the Certificates or
the Exchange Certificates, as the case may be, in a form eligible for deposit
with The Depository Trust Company.
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51
The Company will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the Registered
Exchange Offer or the Shelf Registration and will make generally available to
its security holders (or otherwise provide in accordance with Section 11(a) of
the Securities Act) an earnings statement satisfying the provisions of Section
11(a) of the Securities Act, no later than 45 days after the end of the 12-month
period (or 90 days, if that period is a fiscal year) that begins with the first
month of the Company's first fiscal quarter commencing after the effective date
of the Registration Statement, which statement will cover that 12-month period.
The Company shall cause the Pass Through Trust Agreements (and,
if necessary, the Lease Indentures (as defined pursuant to Section 1.1 of the
Pass Through Trust Agreements)) to be qualified under the Trust Indenture Act of
1939, as amended, in a timely manner and to contain any changes that are
necessary for that qualification. If that qualification would require the
appointment of a new trustee under either Pass Through Trust Agreement or any of
the Lease Indentures, the Company shall appoint a new trustee thereunder
pursuant to the applicable provisions thereof. If required by the Commission,
the Company will also register the Lessor Notes issued pursuant to the Lease
Indentures.
The Company will require each Holder of Securities to be sold
pursuant to any Shelf Registration Statement to furnish to the Company such
information regarding that Holder and the distribution of the Securities as the
Company may from time to time reasonably request for inclusion in the Shelf
Registration Statement, and to provide comments on the Shelf Registration
Statement, and the Company may exclude from that registration the Securities of
any Holder that unreasonably fails to furnish that information and those
comments within a reasonable time after receiving that request.
In the case of any Shelf Registration, the Company shall enter
into such customary agreements (including, if requested, an underwriting
agreement in customary form) and take all such other action, if any, as the
Holders of a majority of the Securities being sold shall reasonably request in
order to facilitate the disposition of the Securities pursuant to that Shelf
Registration.
In the case of any Shelf Registration, the Company shall make
available for inspection by a representative of the Holders of Securities being
sold, their counsel and an accountant retained by those Holders, in a manner
designed to permit underwriters to satisfy their due diligence investigation
under the Securities Act, all financial and other records, pertinent corporate
documents and properties of the Company customarily inspected by underwriters in
primary underwritten offerings and shall cause the officers, directors and
employees of the Company and its subsidiaries to supply all information
reasonably requested by, and customarily supplied in connection with primary
underwritten offerings to, any such representative, attorney or accountant in
connection with that registration, but any records, information or documents
that are designated by the Company as confidential at the time of delivery
thereof shall be kept confidential by those persons, unless (i) those records,
information or documents are in the public domain or otherwise publicly
available, (ii) disclosure of those records, information or documents is
required by a court or administrative order or (iii) disclosure of those
records, information or
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52
documents, in the written opinion of counsel to those persons, is otherwise
required by law (including, without limitation, pursuant to the Securities Act).
In the case of any Shelf Registration, the Company, if requested
by any Holder of Securities covered thereby, shall: (i) cause its counsel to
deliver an opinion and updates thereof relating to the Securities in customary
form addressed to the selling Holder and the managing underwriters, if any,
covering matters customarily covered in opinions requested in underwritten
offerings; (ii) cause its officers to execute and deliver such documents and
certificates and updates thereof as may be reasonably requested by any
underwriter of the applicable Securities, and which are customarily delivered in
underwritten offerings, to evidence the continued validity of the
representations and warranties of the Company made pursuant to, and to evidence
compliance with any customary conditions contained in, an underwriting
agreement; and (iii) cause its independent public accountants to provide to the
selling Holders of the applicable Securities (and any underwriter therefor) a
comfort letter in customary form and covering matters of the type customarily
covered in comfort letters in connection with primary underwritten offerings,
subject to receipt of appropriate documentation as contemplated, and only if
permitted, by Statement of Auditing Standards No. 72.
If a Registered Exchange Offer is to be consummated, upon
delivery of the Certificates by Holders to the Company (or to any other Person
designated by the Company) in exchange for the Exchange Certificates, the
Company shall ▇▇▇▇, or caused to be marked, on the Certificates so exchanged
that those Certificates are being canceled in exchange for the Exchange
Certificates, and in no event shall the Certificates be marked as paid or
otherwise satisfied.
If any broker-dealer registered under the Exchange Act
underwrites any Securities or participates as a member of an underwriting
syndicate or selling group or "assists in the distribution" (within the meaning
of the Conduct Rules of the National Association of Securities Dealers, Inc.
("NASD")) thereof, whether as a Holder of those Securities or as an underwriter,
a placement or sales agent or a broker or dealer in respect thereof, or
otherwise, the Company shall assist such broker-dealer in complying with the
requirements of those Rules and By-Laws, including by (i) if those Rules,
including Rule 2720, shall so require, engaging a "qualified independent
underwriter" (as defined in Rule 2720) to participate in the preparation of the
Registration Statement relating to those Securities, to exercise usual standards
of due diligence in respect thereto and, if any portion of the offering
contemplated by that Registration Statement is an underwritten offering or is
made through a placement or sales agent, to recommend the yield of such
Securities, (ii) indemnifying any such qualified independent underwriter to the
extent of the indemnification of underwriters provided in Section 5 hereof, and
(iii) providing such information to that broker-dealer as may be required in
order for that broker-dealer to comply with the requirements of the Conduct
Rules of the NASD.
Registration Expenses.
The Company shall pay all fees and expenses incident to the performance of
or compliance with this Agreement by the Company including, without limitation:
(a) all Commission, stock exchange or NASD registration and filing fees; (b) all
fees and expenses incurred in connection with compliance with state securities
or Blue Sky laws (including reasonable fees and
11
53
disbursements of counsel for any underwriters or holders in connection with Blue
Sky qualification of any of the Securities); (c) all out of pocket expenses of
any persons in preparing or assisting in preparing, word processing, printing
and distributing any Registration Statement, any prospectus, any amendment or
supplement to either thereof, any underwriting agreement, securities sales
agreement or other document relating to the performance of and compliance with
this Agreement; (d) all rating agency fees; and (e) the fees and disbursements
of counsel for the Company and, in the event of a Shelf Registration, the
reasonable fees and disbursements of one firm of counsel designated by the
Holders of a majority in principal amount of the Securities covered thereby and
of the independent public accountants of the Company, including the expense of
any special audit or "cold comfort" letter required by or incident to that
performance and compliance, but excluding fees and expenses of counsel to the
underwriters and underwriting discounts and commissions and transfer taxes, if
any, relating to the sale or disposition of Securities by a Holder.
Indemnification.
The Company agrees to indemnify and hold harmless each Holder of
Securities, any Participating Broker-Dealer, and each person, if any, who
controls that Holder or Participating Broker-Dealer within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, or is under
common control with, or is controlled by, that Holder or Participating
Broker-Dealer, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement or the related prospectus
(as amended or supplemented if the Company shall have furnished any amendment or
supplement thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except insofar as such losses, claims, damages or liabilities
are caused by any such untrue statement or omission or alleged untrue statement
or omission based on information relating to that Holder or Participating
Broker-Dealer furnished to the Company in writing by that Holder or
Participating Broker-Dealer expressly for use therein, but the foregoing
indemnity in respect of any prospectus will not inure to the benefit of any
Holder or Participating Broker-Dealer from whom the person asserting any such
losses, claims, damages or liabilities purchased Securities, or any person
controlling or affiliated with that Holder or Participating Broker-Dealer, if a
copy of an amendment or supplement to the prospectus (furnished by the Company
on a timely basis) was not sent or given by or on behalf of that Holder or
Participating Broker-Dealer to that person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the Securities
to that person, and if such amendment or supplement would have cured the defect
giving rise to that loss, claim, damage or liability.
Each Participating Broker-Dealer and Holder of Securities,
severally and not jointly, agrees to indemnify and hold harmless the Company,
other selling Holders and Participating Broker-Dealers, directors of the
Company, the officers of the Company who sign a Registration Statement and each
person, if any, who controls the Company or any selling Holder or Participating
Broker-Dealer, within the meaning of either Section 15 of the Securities Act or
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54
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company to that Holder or Participating Broker-Dealer, but only with
reference to information relating to that Holder furnished to the Company in
writing by that Holder or Participating Broker-Dealer expressly for use in a
Registration Statement, any preliminary prospectus, prospectus or any amendment
or supplement to any thereof.
If any proceeding (including any governmental investigation) is
instituted involving any person in respect of which indemnity may be sought
pursuant to either paragraph (a) or (b) above, that person (the "indemnified
party") shall promptly notify the person against whom that indemnity may be
sought (the "indemnifying party") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in that proceeding and shall pay the fees and
expenses of that counsel related to that proceeding. In any such proceeding, any
indemnified party may retain its own counsel, but the fees and expenses of that
counsel will be at the expense of that indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of that counsel, or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate because of actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all such indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. If an indemnified party includes (x) the
Initial Purchasers or such controlling persons of the Initial Purchasers, that
firm will be designated in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated; or (y)
Holders of Securities (other than the Initial Purchasers) or controlling persons
of those Holders, that firm will be designated in writing by the Holders of a
majority in aggregate principal amount of those Securities. In all other cases,
the Company will designate that firm. The indemnifying party will not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with that consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of that settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party has
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by the second and third sentences of this
paragraph, the indemnifying party agrees that it will be liable for any
settlement of any proceeding effected without its written consent if (i) that
settlement is entered into more than 45 days after receipt by the indemnifying
party of the aforesaid request and (ii) the indemnifying party shall not have
reimbursed the indemnified party in accordance with that request prior to the
date of that settlement. No indemnifying party may, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by that indemnified
party, unless that settlement includes an unconditional release of that
indemnified party from all liability on claims that are the subject matter of
that proceeding.
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55
To the extent the indemnification provided for in paragraph (a)
or (b) of this Section 5 is unavailable to an indemnified party or insufficient
in respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party under that paragraph, in lieu of indemnifying that
indemnified party thereunder, shall contribute to the amount paid or payable by
that indemnified party as a result of those losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault
of the indemnifying party or parties, on the one hand, and the indemnified party
or parties, on the other hand, in connection with the statements or omissions
that resulted in those losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative fault of the parties shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by that
Holder, Participating Broker-Dealer or other party and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
that statement or omission. The Holders' and Participating Broker-Dealers'
respective obligations to contribute pursuant to this Section 5 are several in
proportion to the respective amount of Certificates they have purchased, not
joint.
The Company, each Participating Broker-Dealer and each Holder
agree that it would not be just or equitable if contribution pursuant to this
Section 5 were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in subsection (d) of this Section 5. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities
referred to in subsection (d) above is deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
that indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 5, no Holder of
Securities is required to contribute any amount in excess of the amount by which
the total price at which the Securities sold by that Holder pursuant to a
Registration Statement were sold exceeds the amount of any damages that Holder
has otherwise been required to pay by reason of that untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) is
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
The indemnity and contribution provisions contained in this
Section 5 will remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Holder or Participating Broker-Dealer or any person controlling that
Holder or Participating Broker-Dealer or by or on behalf of the Company, its
officers or directors or any person controlling the Company, and (iii) the sale
of the Securities. The remedies provided for in this Section 5 are not exclusive
and do not limit any rights or remedies that may otherwise be available to any
indemnified party at law or in equity.
Additional Interest Under Certain Circumstances.
Additional interest (the "Additional Interest") with respect to the
Securities will be assessed as follows if any of the following events occurs
(each event identified in clause (i) or (ii) below, a "Failure to Register"):
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56
(i) If the Registered Exchange Offer is not consummated or a
Shelf Registration Statement is not declared effective by the Commission
on or prior to 180 days after the original issue date of the Certificates;
or
(ii) If, after the 180th day after the Closing Date, and after
any Shelf Registration Statement is declared effective, (A) such Shelf
Registration Statement thereafter ceases to be effective during the Shelf
Registration Period; or (B) such Shelf Registration Statement or the
related prospectus ceases to be usable in connection with resales of
Transfer Restricted Notes during the Shelf Registration Period (except as
permitted in paragraph (b) of this Section 6) because either (1) any event
occurs as a result of which the related prospectus forming part of such
Shelf Registration Statement would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were
made not misleading, or (2) it shall be necessary to amend such Shelf
Registration Statement, or supplement the related prospectus, to comply
with the Securities Act or the Exchange Act or the respective rules
thereunder.
Additional Interest shall accrue on the Transfer Restricted
Certificates of each series over and above the interest set forth in the title
of the Certificates of that series from and including the date on which any such
Failure to Register shall occur to but excluding the date on which all such
Failures to Register have been cured, at a rate of 0.50% per annum.
A Failure to Register referred to in Section 6(a)(ii) is deemed
not to be continuing in relation to a Shelf Registration Statement or the
related prospectus if (i) that Failure to Register has occurred solely as a
result of (x) the filing of a post-effective amendment to such Shelf
Registration Statement to incorporate annual audited financial information with
respect to the Company, when such post-effective amendment is not yet effective
and needs to be declared effective to permit Holders to use the related
prospectus or (y) the occurrence of other material events or developments with
respect to the Company or its Affiliates that would need to be described in such
Shelf Registration Statement or the related prospectus, and (ii) in the case of
clause (y), the Company is proceeding promptly and in good faith to amend or
supplement such Shelf Registration Statement and related prospectus to describe
those events or, in the case of material developments that the Company
determines in good faith must remain confidential for business reasons, the
Company is proceeding promptly and in good faith to take such steps as are
necessary so that those developments need no longer remain confidential, but in
any case, if any Failure to Register (including any referred to in clause (x) or
(y), above) continues for a period in excess of 45 days, Additional Interest
will be payable in accordance with the above paragraph from the day following
the last day of that 45-day period until the date on which that Failure to
Register is cured.
Any Additional Interest payable will be payable on the regular
interest payment dates with respect to the Certificates, in the same manner as
the manner in which regular interest is payable. The amount of Additional
Interest for any period will be determined by multiplying the applicable
Additional Interest rate by the principal amount of the applicable Certificates,
multiplied by a fraction, the numerator of which is the number of days that
Additional
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57
Interest rate was applicable during that period (determined on the basis of a
360-day year comprised of twelve 30-day months), and the denominator of which is
360.
"Transfer Restricted Certificate" means each Certificate until:
(i) the date on which that Certificate has been exchanged by a person other than
a broker-dealer for a freely transferable Exchange Certificate in the Registered
Exchange Offer; (ii) following the exchange by a broker-dealer in the Registered
Exchange Offer of a Transfer Restricted Certificate for an Exchange Certificate,
the date on which that Exchange Certificate is sold to a purchaser who receives
from that broker-dealer on or prior to the date of that sale a copy of the
prospectus constituting part of the Exchange Offer Registration Statement; (iii)
the date on which that Certificate has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement; or (iv) the date on which that Certificate is distributed to the
public pursuant to Rule 144 under the Securities Act or becomes freely tradeable
pursuant to Rule 144(k) under the Securities Act.
Rules 144 and 144A.
Subject to the proviso to the last sentence of the third paragraph of
Section 1, the Company shall use its best efforts to file the reports required
to be filed by it under the Securities Act and the Exchange Act in a timely
manner. If at any time the Company is not required to file those reports, it
will, upon the request of any Holder of Transfer Restricted Certificates, make
publicly available other information so long as is necessary to permit sales of
Securities pursuant to Rules 144 and 144A and otherwise as required by the Pass
Through Trust Agreements. The Company covenants that it will take such further
action as any Holder of Transfer Restricted Certificates may reasonably request,
all to the extent required from time to time to enable that Holder to sell
Transfer Restricted Certificates without registration under the Securities Act
within the limitation of the exemptions provided by Rules 144 and 144A
(including the requirements of Rule 144A(d)(4)). Upon request by an Initial
Purchaser, the Company will provide a copy of this Agreement to prospective
purchasers of Certificates identified to the Company by that Initial Purchaser.
Upon the request of any Holder of Transfer Restricted Certificates, the Company
shall deliver to that Holder a written statement as to whether it has complied
with those requirements. Notwithstanding the foregoing, nothing in this Section
7 requires the Company to register any of its securities under the Exchange Act.
Underwritten Registrations.
If any of the Transfer Restricted Certificates covered by any Shelf
Registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or managers that will administer the offering
("Managing Underwriters") will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Certificates included in
that offering, but the Managing Underwriters must be reasonably satisfactory to
the Company.
No person may participate in any underwritten registration hereunder
unless that person (a) agrees to sell that person's Transfer Restricted
Certificates on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve those
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58
arrangements, and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of those underwriting arrangements.
Miscellaneous.
Amendments and Waivers.
The provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, except by the Company and the written consent of the Holders
of a majority in principal amount of the Securities affected thereby.
Notices.
All statements, requests, notices and agreements hereunder shall be
made in writing, and:
if to the Initial Purchasers, shall be delivered or sent
by mail, telex or facsimile transmission to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy to Winthrop,
Stimson, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq. (Fax: ▇▇▇-▇▇▇-▇▇▇▇); and
if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to AES Eastern Energy, L.P., ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy to ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇▇, Esq. (Fax: ▇▇▇-▇▇▇-▇▇▇▇).
All such notices and communications will be deemed to have been duly given: (A)
at the time delivered by hand, if personally delivered; (B) three business days
after being deposited in the mail, postage prepaid, if mailed; (C) when receipt
is acknowledged by the recipient's facsimile machine operator, if sent by
facsimile transmission; or (D) on the day delivered, if sent by overnight air
courier guaranteeing next day delivery.
No Inconsistent Agreements.
The Company has not, as of the date hereof, entered into, nor will
it, on or after the date hereof, enter into, any agreement with respect to the
Securities that is inconsistent with the rights granted to the Holders herein or
that otherwise conflicts with this Agreement.
Successors and Assigns.
This Agreement is binding on the Company and its successors and
assigns.
Counterparts.
17
59
This Agreement may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed will
constitute an original and all of which taken together will constitute one and
the same agreement.
Governing Law.
This Agreement is governed by, and is to be construed in accordance
with, the laws of the State of New York without regard to principles of
conflicts of law.
Severability.
If any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein is not
affected or impaired thereby.
Securities Held by the Company.
Whenever the consent or approval of Holders of a specified
percentage of principal amount of Securities is required hereunder, Securities
held by the Company or its affiliates will not be counted in determining whether
that consent or approval was given by the Holders of that required percentage.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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60
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Initial Purchasers and the Company in accordance with its terms.
Very truly yours,
AES EASTERN ENERGY, L.P.
By: AES NY, LLC
Its General Partner
By:_____________________________
Name:
Title:
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
CIBC World Markets Corp.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By:________________________
Name:
Title:
19
61
ANNEX A
Each broker-dealer that receives Exchange Certificates for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Certificates. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Certificates received in exchange for
Existing Certificates where such Existing Certificates were acquired by such
broker-dealer as a result of market-making activities or other trading
activities. The Company has agreed that, for a period of 120 days after the
consummation of the Exchange Offer, it will make this Prospectus available to
any broker-dealer for use in connection with any such resale. See "Plan of
Distribution".
62
ANNEX B
Each broker-dealer that receives Exchange Certificates for its own account
in exchange for Certificates, that were acquired by that broker-dealer as a
result of market-making activities or other trading activities, must acknowledge
that it will deliver a prospectus in connection with any resale of those
Exchange Certificates. See "Plan of Distribution."
63
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Certificates for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of those Exchange Certificates. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Certificates received
in exchange for Certificates when those Certificates were acquired as a result
of market making activities or other trading activities. The Company has agreed
that, for a period of 120 days after the consummation of the Exchange Offer, it
will make this prospectus, as amended or supplemented, available to any
broker-dealer for use in connection with any such resale. In addition, until
_____________, all dealers effecting transactions in the Exchange Certificates
may be required to deliver a prospectus.(1)
The Company will not receive any proceeds from any sale of Exchange
Certificates by broker-dealers. Exchange Certificates received by any
broker-dealer for its own account pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange
Certificates or a combination of those methods of resale, at market prices
prevailing at the time of resale or at prices related to those prevailing market
prices or negotiated prices. Any such resale may be made directly to purchasers
or to or through brokers or dealers who may receive compensation in the form of
commissions or concessions from any such broker-dealer or the purchasers of any
such Exchange Certificates. Any broker-dealer that resells Exchange Certificates
that were received by it for its own account pursuant to the Exchange Offer and
any broker or dealer that participates in a distribution of those Exchange
Certificates may be deemed to be an "underwriter" within the meaning of the
Securities Act and any profit on any such resale of Exchange Certificates and
any commission or concessions received by any such person may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that, by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 120 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus, and any amendment or
supplement to this Prospectus, to any broker-dealer that requests those
documents in the Letter of Transmittal. The Company has agreed to pay all
expenses incident to the Exchange Offer other than commissions or concessions of
any broker or dealer and transfer taxes, if any, and will indemnify the Holders
of the Securities (including any broker-dealer) against certain liabilities,
including liabilities under the Securities Act.
(1) In addition, the legend required by Item 502(b) of Regulation S-K will
appear on the back cover page of the Exchange Offer prospectus.
64
ANNEX D
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE
10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENT OR SUPPLEMENT THERETO.
Name:
Address:
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Certificates. If the undersigned is a broker-dealer that will receive Exchange
Certificates for its own account in exchange for Certificates that were acquired
as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Certificates; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.