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EXHIBIT 4.13
THE AES CORPORATION
GUARANTEE AGREEMENT
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Dated as of __________, 199_
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TABLE OF CONTENTS
Page
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ARTICLE I
SECTION 1.1 Definitions.................................................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application............................... 5
SECTION 2.2 Lists of Holders of Preferred Securities....................... 5
SECTION 2.3 Reports by the Guarantee Trustee............................... 5
SECTION 2.4 Periodic Reports to Guarantee Trustee.......................... 5
SECTION 2.5 Evidence of Compliance with Conditions Precedent............... 6
SECTION 2.6 Events of Default; Waiver...................................... 6
SECTION 2.7 Disclosure of Information...................................... 6
SECTION 2.8 Conflicting Interest........................................... 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee..................... 7
SECTION 3.2 Certain Rights and Duties of the Guarantee Trustee............. 8
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee......... 10
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Qualifications................................................ 10
SECTION 4.2 Appointment, Removal and Resignation of Guarantee Trustee..... 11
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee..................................................... 12
SECTION 5.2 Waiver of Notice.............................................. 12
SECTION 5.3 Obligations Not Affected...................................... 12
SECTION 5.4 Enforcement of Guarantee...................................... 13
SECTION 5.5 Guarantee of Payment.......................................... 14
SECTION 5.6 Subrogation................................................... 14
SECTION 5.7 Independent Obligations....................................... 14
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.................................... 14
SECTION 6.2 Subordination................................................. 15
ARTICLE VII
TERMINATION
SECTION 7.1 Termination................................................... 15
ARTICLE VIII
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 8.1 Exculpation................................................... 16
SECTION 8.2 Indemnification............................................... 16
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns........................................ 17
SECTION 9.2 Amendments.................................................... 17
SECTION 9.3 Notices....................................................... 17
SECTION 9.4 Genders....................................................... 18
SECTION 9.5 Benefit....................................................... 18
SECTION 9.6 Governing Law................................................. 18
SECTION 9.7 Counterparts.................................................. 18
SECTION 9.8 Exercise of Overallotment Option.............................. 19
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of , 199 , is executed and
delivered by The AES Corporation, a Delaware corporation (the "Guarantor"),
and The First National Bank of Chicago, a national banking association, as
the initial Guarantee Trustee (as defined herein) for the benefit of the
Holders (as defined herein) from time to time of the Preferred Securities
(as defined herein) of AES Trust , a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of , 199 among the trustees of the Issuer
named therein, The AES Corporation, as Sponsor, and the Holders from time
to time of undivided beneficial interests in the assets of the Issuer, the
Issuer may issue up to aggregate liquidation amount of its % Preferred
Trust Securities (the "Preferred Securities") representing undivided
beneficial interests in the assets of the Issuer and having the terms set
forth in Exhibit B to the Declaration, of which $ liquidation amount of
Preferred Securities are being issued as of the date hereof. Up to the
remaining $ liquidation amount of Preferred Securities may be issued by the
Issuer if and to the extent that the over-allotment option granted by the
Guarantor and the Issuer pursuant to the Underwriting Agreement (as defined
in the Declaration) is exercised by the Underwriters named in the
Underwriting Agreement.
WHEREAS, as incentive for the Holders to purchase Preferred Securities,
the Guarantor desires to irrevocably and unconditionally agree, to the
extent set forth herein, to pay to the Holders of the Preferred Securities
the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by the initial
purchasers thereof of Preferred Securities, which purchase the Guarantor
hereby agrees shall benefit the Guarantor, the Guarantor executes and
delivers this Guarantee Agreement for the benefit of the Holders from time
to time of the Preferred Securities.
ARTICLE I
SECTION 1.1 Definitions.
(a) Capitalized terms used in this Guarantee Agreement but not defined
in the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or
amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Commission" means the Securities and Exchange Commission.
"Common Securities" means the securities representing undivided
beneficial interests in the assets of the Issuer, having the terms set
forth in Exhibit C to the Declaration.
"Covered Person" means any Holder of Preferred Securities.
"Debentures" means the series of Junior Subordinated Debentures issued
by the Guarantor under the Indenture to the Property Trustee and entitled
the " % Junior Subordinated Debentures due ".
"Distributions" means the periodic distributions and other payments
payable to Holders of Preferred Securities in accordance with the terms of
the Preferred Securities set forth in Exhibit B to the Declaration.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Preferred
Securities, to the extent not paid or made by the Issuer: (i) any accrued
and unpaid Distributions and the redemption price, including all accrued
and unpaid Distributions to the date of redemption (the "Redemption
Price"), with respect to the Preferred Securities called for redemption by
the Issuer but only if and to the extent that in each case the Guarantor
has made a payment to the Property Trustee of interest or principal on the
Debentures and (ii) upon a voluntary or involuntary dissolution, winding-up
or termination of the Issuer (other than in connection with the
distribution of Debentures to Holders or the redemption of all the
Preferred Securities upon the maturity or redemption of the Debentures as
provided in the Declaration), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment, to the extent the Issuer has
funds available therefor, or (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The First National Bank of Chicago, a
national banking association, until a Successor Guarantee Trustee has been
appointed and accepted such appointment pursuant to the terms of this
Guarantee Agreement and thereafter means each such Successor Guarantee
Trustee.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any entity directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Guarantor.
"Indemnified Person" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, and any officers, directors, shareholders, members,
partners, employees, representatives or agents of the Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as of
, 1996 between the Guarantor and [NAME OF TRUSTEE] as trustee, as
supplemented by the [ ] Supplemental Indenture thereto dated as of 199 ,
pursuant to which the Debentures are to be issued.
"Majority in liquidation amount of the Preferred Securities" means,
except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class, who are
the record owners of Preferred Securities whose liquidation amount
(including the stated amount that would be paid on redemption, liquidation
or otherwise, plus accrued and unpaid Distributions to the date upon which
the voting percentages are determined) represents more than 50% of the
liquidation amount of all outstanding Preferred Securities.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company,
limited liability company, trust, unincorporated association, or government
or any agency or political subdivision thereof, or any other entity of
whatever nature.
"Preferred Securities" has the meaning set forth in the first WHEREAS
clause above.
"Property Trustee" means the Person acting as Property Trustee under
the Declaration.
"Redemption Price" means the amount payable on redemption of the
Preferred Securities in accordance with the terms of the Preferred Securities.
"Responsible Officer" means, with respect to the Guarantee Trustee, the
chairman of the board of directors, the president, any vice-president, any
assistant vice-president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, any trust officer or assistant trust
officer or any other officer of the Guarantee Trustee customarily
performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of
that officer's knowledge of and familiarity with the particular subject.
"66-2/3% in liquidation amount of the Preferred Securities" means,
except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class who are
the record owners of Preferred Securities whose liquidation amount
(including the stated amount that would be paid on redemption, liquidation
or otherwise, plus accrued and unpaid Distributions to the date upon which
the voting percentages are determined) represents 66-2/3% or more of the
liquidation amount of all Preferred Securities.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as a Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions;
(b) if and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Section Section
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control; and
(c) the application of the Trust Indenture Act to this Guarantee
Agreement shall not affect the nature of the Preferred Securities as equity
securities representing undivided beneficial interests in the assets of the
Issuer.
SECTION 2.2 Lists of Holders of Preferred Securities.
(a) The Guarantor shall provide the Guarantee Trustee with such
information as is required under Section 312(a) of the Trust Indenture Act
at the times and in the manner provided in Section 312(a); and
(b) the Guarantee Trustee shall comply with its obligations under
Section Section 310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Guarantee Trustee.
Within 60 days after May 15 of each year, the Guarantee Trustee shall
provide to the Holders of the Preferred Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form, in
the manner and at the times provided by Section 313 of the Trust Indenture
Act. The Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, the Commission
and the Holders of the Preferred Securities, as applicable, such documents,
reports and information as required by Section 314(a)(1)-(3) (if any) of
the Trust Indenture Act and the compliance certificates required by Section
314(a)(4) and (c) of the Trust Indenture Act, any such certificates to be
provided in the form, in the manner and at the times required by Section
314(a)(4) and (c) of the Trust Indenture Act (provided that any certificate
to be provided pursuant to Section 314(a)(4) of the Trust Indenture Act
shall be provided within 120 days of the end of each fiscal year of the
Issuer).
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this
Guarantee Agreement which relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to
be given pursuant to Section 314(c) shall comply with Section 314(e) of the
Trust Indenture Act.
SECTION 2.6 Events of Default; Waiver.
(a) Subject to Section 2.6(b), Holders of Preferred Securities may by
vote of at least a Majority in liquidation amount of the Preferred
Securities, (A) direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee, or exercising
any trust or power conferred upon by the Guarantee Trustee or (B) on behalf
of the Holders of all Preferred Securities waive any past Event of Default
and its consequences. Upon such waiver, any such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have
been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon.
(b) The right of any Holder of Preferred Securities to receive payment
of the Guarantee Payments in accordance with this Guarantee Agreement, or
to institute suit for the enforcement of any such payment, shall not be
impaired without the consent of each such Holder.
SECTION 2.7 Disclosure of Information.
The disclosure of information as to the names and addresses of the
Holders of the Preferred Securities in accordance with Section 312 of the
Trust Indenture Act, regardless of the source from which such information
was derived, shall not be deemed to be a violation of any existing law, or
any law hereafter enacted which does not specifically refer to Section 312
of the Trust Indenture Act, nor shall the Guarantee Trustee be held
accountable by reason of mailing any material pursuant to a request made
under Section 312(b) of the Trust Indenture Act.
SECTION 2.8 Conflicting Interest.
The Declaration shall be deemed to be specifically described in this
Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee
in trust for the benefit of the Holders of the Preferred Securities. The
Guarantee Trustee shall not transfer its right, title and interest in the
Guarantee Agreement to any Person except a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Guarantee Trustee or to a Holder of Preferred Securities exercising his or
her rights pursuant to Section 5.4. The right, title and interest of the
Guarantee Trustee to the Guarantee Agreement shall vest automatically in
each Person who may hereafter be appointed as Guarantee Trustee in
accordance with Article IV. Such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and
delivered.
(b) If an Event of Default occurs and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders of the Preferred Securities.
(c) This Guarantee Agreement and all moneys received by the Property
Trustee hereunder in respect of the Guarantee Payments will not be subject
to any right, charge, security interest, lien or claim of any kind in favor
of, or for the benefit of that Guarantee Trustee or its agents or their
creditors.
(d) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to
the holders of the Preferred Securities, as their names and addresses
appear upon the register, notice of all Events of Default known to the
Guarantee Trustee, unless such defaults shall have been cured before the
giving of such notice; provided, that, the Guarantee Trustee shall be
protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors
and/or Responsible Officers, of the Guarantee Trustee in good faith
determine that the withholding of such notice is in the interests of the
Holders of the Preferred Securities. The Guarantee Trustee shall not be
deemed to have knowledge of any default except any default as to which the
Guarantee Trustee shall have received written notice or a Responsible
Officer charged with the administration of this Guarantee Agreement shall
have obtained written notice.
(e) The Guarantee Trustee shall not resign as a Trustee unless a
Successor Guarantee Trustee has been appointed and accepted that
appointment in accordance with Article IV.
SECTION 3.2 Certain Rights and Duties of the Guarantee Trustee.
(a) The Guarantee Trustee, before the occurrence of an Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.6(a)), the Guarantee Trustee shall exercise such of the rights and powers
vested in it by this Guarantee Agreement, and use the same degree of care
and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(b) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action,
its own negligent failure to act or its own willful misconduct, except
that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee Trustee
shall be determined solely by the express provisions of this
Guarantee Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee
Agreement, and no implied covenants or obligations shall be
read into this Guarantee Agreement against the Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Guarantee Trustee and conforming to the
requirements of this Guarantee Agreement; but in the case of
any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Guarantee
Trustee, the Guarantee Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Preferred Securities
as provided herein relating to the time, method and place of
conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if it shall have
reasonable ground for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity against such risk or
liability is not reasonably assured to it.
(c) Subject to the provisions of Section 3.2(a) and (b):
(i) whenever in the administration of this Guarantee Agreement,
the Guarantee Trustee shall deem it desirable that a matter be
proved or established prior to taking, suffering or omitting any
action hereunder, the Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on
its part, request and rely upon a certificate, which shall comply
with the provisions of Section 314(e) of the Trust Indenture Act,
signed by any authorized officer of the Guarantor;
(ii) the Guarantee Trustee (A) may consult with counsel (which
may be counsel to the Guarantor or any of its Affiliates and may
include any of its employees) selected by it in good faith and with
due care and the written advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon and in
accordance with such advice and opinion and (B) shall have the right
at any time to seek instructions concerning the administration of
this Guarantee Agreement from any court of competent jurisdiction;
(iii) the Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or
by or through agents or attorneys and the Guarantee Trustee shall
not be responsible for any misconduct or negligence on the part of
any agent or attorney appointed by it in good faith and with due
care;
(iv) the Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holders of Preferred
Securities, unless such Holders shall have offered to the Guarantee
Trustee reasonable security and indemnity against the costs,
expenses (including its attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such
request or direction; provided that nothing contained in this clause
(iv) shall relieve the Guarantee Trustee of the obligation, upon the
occurrence of an Event of Default (which has not been cured or
waived) to exercise such of the rights and powers vested in it by
this Guarantee Agreement, and to use the same degree of care and
skill in this exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs;
and
(v) any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities and the
signature of the Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action; and no third
party shall be required to inquire as to the authority of the
Guarantee Trustee to so act, or as to its compliance with any of the
terms and provisions of this Guarantee Agreement, both of which
shall be conclusively evidenced by the Guarantee Trustee's or its
agent's taking such action.
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee.
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representations as to the validity or sufficiency of this Guarantee
Agreement.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Qualifications.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted
by the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000,
and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or
to the requirements of the supervising or examining authority referred
to above, then for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent
report of condition so published.
If at any time the Guarantee Trustee shall cease to satisfy the
requirements of clauses (i)-(ii) above, the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section
4.2. If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act,
the Guarantee Trustee and the Guarantor shall in all respects comply with
the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Guarantee Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 4.2(a) until a Successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 4.1(a)
has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and
delivered to the Guarantor and the Guarantee Trustee being
removed.
(c) The Guarantee Trustee appointed to office shall hold office until
his successor shall have been appointed or until its removal or
resignation.
(d) The Guarantee Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument (a "Resignation
Request") in writing signed by the Guarantee Trustee and delivered
to the Guarantor, which resignation shall take effect upon such
delivery or upon such later date as is specified therein;
provided, however, that no such resignation of the Guarantee
Trustee shall be effective until a Successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under
Section 4.1(a) has been appointed and has accepted such
appointment by instrument executed by such Successor Guarantee
Trustee and delivered to Guarantor and the resigning Guarantee
Trustee.
(e) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of a Resignation Request, the
resigning Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Guarantee Trustee.
Such court may thereupon after such notice, if any, as it may deem
proper and prescribe, appoint a Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer) regardless of any defense, right of set-off
or counterclaim which the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment
of the required amounts by the Guarantor to the Holders or by causing the
Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice.
The Guarantor hereby waives notice of acceptance of this Guarantee
Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor under
this Guarantee Agreement shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the
Preferred Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions (other than an extension of time
for payment of Distributions that results from the extension of any
interest payment period on the Debentures), Redemption Price,
Liquidation Distribution (as defined in the Declaration) or any
other sums payable under the terms of the Preferred Securities or
the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred
Securities;
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Holders pursuant to the terms of
the Preferred Securities, or any action on the part of the Issuer
granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, arrangement, composition
or readjustment of debt of, or other similar proceedings affecting,
the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 5.3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any
and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4 Enforcement of Guarantee.
The Guarantor and the Guarantee Trustee expressly acknowledge that (i)
this Guarantee Agreement will be deposited with the Guarantee Trustee to be
held for the benefit of the Holders; (ii) the Guarantee Trustee has the
right to enforce this Guarantee Agreement on behalf of the Holders; (iii)
Holders representing not less than a Majority in liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available in respect of this
Guarantee Agreement including the giving of directions to the Guarantee
Trustee, or exercising any trust or other power conferred upon the
Guarantee Trustee under this Guarantee Agreement, and (iv) notwithstanding
the foregoing, any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Guarantee Agreement, without first instituting a legal proceeding against
the Issuer, the Guarantee Trustee, or any other Person.
SECTION 5.5 Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not merely
of collection. This Guarantee Agreement will not be discharged except by
payment of the Guarantee Payments in full (without duplication of amounts
theretofore paid by the Issuer).
SECTION 5.6 Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any rights which it may acquire
by way of subrogation or any indemnity, reimbursement or other agreement,
in all cases as a result of payment under this Guarantee Agreement, if, at
the time of any such payment, any amounts are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the Guarantor in
violation of the preceding sentence, the Guarantor agrees to hold such
amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities and that the Guarantor shall be liable as principal and as
debtor hereunder to make Guarantee Payments pursuant to the terms of this
Guarantee Agreement notwithstanding the occurrence of any event referred to
in subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.
So long as any Preferred Securities remain outstanding, the Guarantor
will not declare or pay dividends on, or redeem, purchase, acquire or make
a distribution or liquidation payment with respect to, any of its common
stock or preferred stock or make any guarantee payment with respect thereto
if at such time (i) the Guarantor shall be in default with respect to its
Guarantee Payments or other payment obligations hereunder, (ii) there shall
have occurred any event of default under the Declaration or (iii) the
Guarantor shall have given notice of its selection of an Extension Period
(as defined in the Indenture) and such period, or any extension thereof, is
continuing; provided that (a) the Guarantor will be permitted to pay
accrued dividends (and cash in lieu of fractional shares) upon the
conversion of any preferred stock of the Guarantor as may be outstanding
from time to time, in each case in accordance with the terms of such stock
and (b) the foregoing will not apply to any stock dividends paid by the
Guarantor. In addition, so long as any Preferred Securities remain
outstanding, the Guarantor (i) will remain the sole direct or indirect
owner of all of the outstanding Common Securities and shall not cause or
permit the Common Securities to be transferred except to the extent such
transfer is permitted under Section 9.1(c) of the Declaration; provided
that any permitted successor of the Guarantor under the Indenture may
succeed to the Guarantor's ownership of the Common Securities and (ii) will
use reasonable efforts to cause the Issuer to continue to be treated as a
grantor trust for United States federal income tax purposes except in
connection with a distribution of Debentures as provided in the
Declaration.
SECTION 6.2 Subordination.
This Guarantee Agreement will constitute an unsecured obligation of the
Guarantor and will rank (i) subordinate and junior in right of payment to
all other liabilities of the Guarantor, including the Debentures, except
those made pari passu or subordinate by their terms, and (ii) senior to all
capital stock now or hereafter issued by the Guarantor and to any guarantee
now or hereafter entered into by the Guarantor in respect of any of its
capital stock. The Guarantor's obligations under this Guarantee Agreement
will rank pari passu with respect to obligations under other guarantee
agreements which it may enter into from time to time to the extent that
such agreements shall be entered into in substantially the form hereof and
provide for comparable guarantees by the Guarantor of payment on preferred
securities issued by other DLJ Capital Trusts.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.
This Guarantee Agreement shall terminate and be of no further force and
effect upon full payment of the Redemption Price of all Preferred
Securities, or upon the distribution of Debentures to Holders of Preferred
Securities and Common Securities in exchange for all of the Preferred
Securities and Common Securities, or upon full payment of the amounts
payable in accordance with the Declaration upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any
Holder must restore payment of any sums paid with respect to the Preferred
Securities or this Guarantee Agreement.
ARTICLE VIII
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 8.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith and in a manner such
Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Guarantee Agreement
or by law, except that an Indemnified Person shall be liable for any such
loss, damage or claim incurred by reason of such Indemnified Person's
negligence or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as
to matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence
and amount of assets from which Distributions to Holders of Preferred
Securities might properly be paid.
SECTION 8.2 Indemnification.
(a) To the fullest extent permitted by applicable law, the Guarantor
shall indemnify and hold harmless each Indemnified Person from and against
any loss, damage or claim incurred by such Indemnified Person by reason of
any act or omission performed or omitted by such Indemnified Person in good
faith and in a manner such Indemnified Person reasonably believed to be
within the scope of authority conferred on such Indemnified Person by this
Guarantee Agreement, except that no Indemnified Person shall be entitled to
be indemnified in respect of any loss, damage or claim incurred by such
Indemnified Person by reason of negligence or willful misconduct with
respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Guarantor prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Guarantor of an
undertaking by or on behalf of the Indemnified Person to repay such amount
if it shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 8.2(a).
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assignees, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the
Holders of the Preferred Securities then outstanding. Except in connection
with a consolidation, merger or sale involving the Guarantor that is
permitted under Article Ten of the Indenture, the Guarantor shall not
assign its obligations hereunder.
SECTION 9.2 Amendments.
Except with respect to any changes which do not adversely affect the
rights of Holders (in which case no consent of Holders will be required),
this Guarantee Agreement may only be amended with the prior approval of the
Holders of not less than 66-2/3% in liquidation amount of the Preferred
Securities. The provisions of Section 12.2 of the Declaration concerning
meetings of Holders shall apply to the giving of such approval.
SECTION 9.3 Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address as the Guarantor may give notice of to the Holders:
The AES Corporation
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Facsimile No.:
Attention: General Counsel and Secretary
(b) if given to the Guarantee Trustee, to the address set forth below
or such other address as the Guarantee Trustee may give notice to the
Holders:
The First National Bank of Chicago
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Attention: Corporate Trust Administration
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if given to any Holder of Preferred Securities, at the address
set forth on the books and records of the Issuer.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no
notice was given, such notice or other document shall be deemed to have
been delivered on the date of such refusal or inability to deliver.
SECTION 9.4 Genders.
The masculine, feminine and neuter genders used herein shall include
the masculine, feminine and neuter genders.
SECTION 9.5 Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and
subject to Section 3.1(a) is not separately transferable from the Preferred
Securities.
SECTION 9.6 Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).
SECTION 9.7 Counterparts.
This Guarantee Agreement may be executed in counterparts, each of which
shall be an original; but such counterparts shall together constitute one
and the same instrument.
SECTION 9.8 Exercise of Overallotment Option.
If and to the extent that Preferred Securities are issued by the Issuer
upon exercise of the overallotment option referred to the second WHEREAS
clause, the Guarantor agrees to give prompt notice thereof to the Guarantee
Trustee but the failure to give such notice shall not relieve the Guarantor
of any of its obligations hereunder.
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
The AES Corporation
By:
Name:
Title:
The First National Bank of Chicago
As Guarantee Trustee
By:
Name:
Title:
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, on this day of , 199 ,
personally appeared of The AES Corporation known to me (or proved to me by
introduction upon the oath of a person known to me) to be the person and
officer whose name is subscribed to the foregoing instrument, and
acknowledged to me that he/she executed the same as the act of such trust
for the purposes and consideration herein expressed and in the capacity
therein stated.
GIVEN UNDER MY HAND AND SEAL THIS DAY OF
, 199 .
[SEAL]
________________________________
NOTARY PUBLIC, STATE OF NEW YORK
Print Name: ____________________
Commission Expires:_____________
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, on this day of , 199 ,
personally appeared of The First National Bank of Chicago, known to me (or
proved to me by introduction upon the oath of a person known to me) to be
the person and officer whose name is subscribed to the foregoing
instrument, and acknowledged to me that he/she executed the same as the act
of such trust for the purposes and consideration herein expressed and in the
capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS DAY OF
, 199 .
[SEAL]
________________________________
NOTARY PUBLIC, STATE OF NEW YORK
Print Name:_____________________
Commission Expires: ____________