Exhibit 4.1
CONFORMED COPY
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AES CHINA GENERATING CO. LTD.
AND
BANKERS TRUST COMPANY,
AS TRUSTEE
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INDENTURE
DATED AS OF DECEMBER 19, 1996
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$180,000,000
10 1/8% NOTES DUE 2006
TABLE OF CONTENTS
PAGE
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS .................................................. 1
SECTION 1.02. OTHER DEFINITIONS ............................................ 18
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT............. 19
SECTION 1.04. RULES OF CONSTRUCTION......................................... 19
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING............................................... 20
SECTION 2.02. EXECUTION AND AUTHENTICATION.................................. 20
SECTION 2.03. REGISTRAR AND PAYING AGENT.................................... 21
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST........................... 21
SECTION 2.05. NOTEHOLDER LISTS.............................................. 22
SECTION 2.06. TRANSFER AND EXCHANGE; DEFINITIVE NOTE........................ 22
SECTION 2.07. REPLACEMENT NOTES............................................. 24
SECTION 2.08. OUTSTANDING NOTES............................................. 24
SECTION 2.09. DETERMINATION OF HOLDERS' ACTION.............................. 25
SECTION 2.10. TEMPORARY NOTES............................................... 25
SECTION 2.11. CANCELLATION.................................................. 25
SECTION 2.12. DEFAULTED INTEREST............................................ 25
ARTICLE 3
COVENANTS
SECTION 3.01. PAYMENT OF NOTES.............................................. 25
SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY............................... 26
SECTION 3.03. LIMITATION ON RESTRICTED PAYMENTS............................. 27
SECTION 3.04. LIMITATION ON INCURRENCE OF INDEBTEDNESS...................... 29
SECTION 3.05 LIMITATION ON PAYMENT RESTRICTIONS AFFECTING PROJECT COMPANIES 31
SECTION 3.06. PAYMENT OF ADDITIONAL AMOUNTS................................. 32
SECTION 3.07. LIMITATION ON LIENS........................................... 33
SECTION 3.08. CHANGE OF CONTROL............................................. 35
SECTION 3.09. COMPLIANCE CERTIFICATE........................................ 37
SECTION 3.10. COMMISSION REPORTS............................................ 37
SECTION 3.11. LIMITATION ON TRANSACTIONS WITH AFFILIATES.................... 38
SECTION 3.12. LIMITATIONS ON SALES OF ASSETS AND REFINANCINGS............... 39
SECTION 3.13. MAINTENANCE OF CERTAIN CASH PROCEEDS.......................... 42
SECTION 3.14. PAYMENT OF STAMP DUTY AND OTHER TAXES......................... 42
SECTION 3.15. PAYMENT OF TAXES AND OTHER CLAIMS............................. 42
SECTION 3.16. NOTICE OF DEFAULTS AND OTHER EVENTS........................... 42
SECTION 3.17. MAINTENANCE OF INSURANCE...................................... 42
SECTION 3.18. LIMITATION ON ISSUANCE OF SUBSIDIARY CAPITAL STOCK............ 43
SECTION 3.19. LIMITATION ON CHANGES IN THE NATURE OF THE BUSINESS........... 43
SECTION 3.20. LIMITATION ON CERTAIN SUBSIDIARY INVESTMENTS.................. 43
SECTION 3.21. GOVERNMENT APPROVALS.......................................... 43
SECTION 3.22. COMPLIANCE WITH LAWS.......................................... 44
SECTION 3.23. OPERATIONS AND MAINTENANCE.................................... 44
ARTICLE 4
CONSOLIDATION AND MERGER
SECTION 4.01. MERGER AND CONSOLIDATION...................................... 44
SECTION 4.02. SUCCESSOR SUBSTITUTED......................................... 45
ARTICLE 5
DEFAULTS AND REMEDIES
SECTION 5.01. EVENTS OF DEFAULT............................................. 46
SECTION 5.02. ACCELERATION.................................................. 48
SECTION 5.03. OTHER REMEDIES................................................ 48
SECTION 5.04. WAIVER OF PAST DEFAULTS....................................... 48
SECTION 5.05. CONTROL BY MAJORITY........................................... 49
SECTION 5.06. LIMITATION ON SUITS........................................... 49
SECTION 5.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.......................... 49
SECTION 5.08. COLLECTION SUIT BY TRUSTEE.................................... 50
SECTION 5.09. TRUSTEE MAY FILE PROOFS OF CLAIM.............................. 50
SECTION 5.10. PRIORITIES.................................................... 50
SECTION 5.11. UNDERTAKING FOR COSTS......................................... 51
SECTION 5.12. WAIVER OF STAY OR EXTENSION LAWS.............................. 51
ARTICLE 6
TRUSTEE
SECTION 6.01. DUTIES OF TRUSTEE............................................. 51
SECTION 6.02. RIGHTS OF TRUSTEE............................................. 52
SECTION 6.03. INDIVIDUAL RIGHTS OF TRUSTEE.................................. 53
SECTION 6.04. TRUSTEES DISCLAIMER........................................... 53
SECTION 6.05. NOTICE OF DEFAULTS............................................ 53
SECTION 6.06. REPORTS BY TRUSTEE TO HOLDERS................................. 53
SECTION 6.07. COMPENSATION AND INDEMNITY.................................... 53
SECTION 6.08. REPLACEMENT OF TRUSTEE........................................ 54
SECTION 6.09. SUCCESSOR TRUSTEE BY MERGER, ETC.............................. 55
ii
SECTION 6.10. ELIGIBILITY; DISQUALIFICATION................................. 55
SECTION 6.11. PREFERENTIAL COLLECTIONS OF CLAIMS AGAINST COMPANY............ 55
ARTICLE 7
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 7.01. DISCHARGE OF LIABILITY ON NOTES; DEFEASANCE................... 56
SECTION 7.02. DEFEASANCE AND DISCHARGE OF INDENTURE......................... 56
SECTION 7.03. DEFEASANCE OF CERTAIN OBLIGATIONS............................. 58
SECTION 7.04. APPLICATION OF TRUST MONEY.................................... 59
SECTION 7.05. REPAYMENT TO COMPANY.......................................... 59
SECTION 7.06. REINSTATEMENT................................................. 60
ARTICLE 8
AMENDMENTS AND SUPPLEMENTS
SECTION 8.01. WITHOUT CONSENT OF HOLDERS.................................... 60
SECTION 8.02. WITH CONSENT OF HOLDERS....................................... 61
SECTION 8.03. SUPPLEMENTAL INDENTURES....................................... 62
SECTION 8.04. REVOCATION AND EFFECT OF CONSENTS............................. 62
SECTION 8.05. NOTATION ON OR EXCHANGE OF NOTES.............................. 62
SECTION 8.06. TRUSTEE TO SIGN AMENDMENTS.................................... 63
SECTION 8.07. FIXING OF RECORD DATES........................................ 63
ARTICLE 9
SECURITY AGREEMENT
SECTION 9.01. SECURITY AGREEMENT............................................ 63
SECTION 9.02. HOLDERS' CONSENT.............................................. 64
SECTION 9.03. TRUST INDENTURE ACT OF 1939 REQUIREMENTS...................... 64
SECTION 9.04. RELEASE UPON TERMINATION OF THE COMPANY'S OBLIGATIONS......... 64
SECTION 9.05. RETIREMENT OF NOTES........................................... 64
ARTICLE 10
REDEMPTION
SECTION 10.01. NOTICE TO TRUSTEE............................................ 65
SECTION 10.02. SELECTION OF NOTES TO BE REDEEMED............................ 66
SECTION 10.03. NOTICE OF REDEMPTION......................................... 66
SECTION 10.04. EFFECT OF NOTICE OF REDEMPTION............................... 67
SECTION 10.05. DEPOSIT OF REDEMPTION PRICE.................................. 67
SECTION 10.06. NOTES REDEEMED IN PART....................................... 67
SECTION 10.07. OPTIONAL REDEMPTION FOR CHANGES IN WITHHOLDING TAXES......... 67
iii
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS................................. 68
SECTION 11.02. NOTICES...................................................... 68
SECTION 11.03. COMMUNICATION BY HOLDERS WITIH OTHER HOLDERS................. 69
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT........... 69
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION................ 69
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.................................. 69
SECTION 11.07. SUCCESSORS; NO RECOURSE AGAINST OTHERS....................... 70
SECTION 11.08. DUPLICATE ORIGINALS.......................................... 70
SECTION 11.09. OTHER PROVISIONS............................................. 70
SECTION 11.10. GOVERNING LAW................................................ 70
SECTION 11.11. CONSENT TO JURISDICTION...................................... 70
SECTION 11.12. JUDGMENT CURRENCY............................................ 71
SECTION 11.13. EFFECT OF HEADINGS........................................... 71
SECTION 11.14. WAIVER OF IMMUNITY........................................... 71
SECTION 11.15. TAX CONSIDERATIONS........................................... 72
EXHIBIT A - FORM OF NOTE
iv
INDENTURE dated as of December 19, 1996, between AES China Generating
Co. Ltd., a corporation established under the laws of Bermuda (the "Company")
and Bankers Trust Company, a New York banking corporation, as trustee (the
"Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the holders of the Company's 10 1/8 % Notes
Due 2006:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person existing at the
time at which such Person became a Subsidiary and not incurred in connection
with, or in contemplation of, such Person becoming a Subsidiary. Acquired
Indebtedness shall be deemed to be Incurred on the date the acquired Person
becomes a Project Company.
"ADDITIONAL AMOUNTS" has the meaning set forth in Section 3.06 hereof.
Any reference in this Indenture to principal or interest in respect of the Notes
shall be deemed also to refer to any Additional Amounts that may be payable as
set forth herein and under the Notes.
"ADDITIONAL ASSETS" means (i) any property or assets related to the
Line of Business which will be owned and used by the Company or a Project
Company, (ii) the Capital Stock of a Person that becomes a Project Company as a
result of the acquisition of such Capital Stock by the Company or another
Project Company, or (iii) Capital Stock in any Person that at the time of
acquisition of such Capital Stock is a Project Company.
"ADJUSTED CASH FLOW" means, for any period, the excess of (A) the
aggregate amount (without duplication ) of (i) dividends, distributions,
payments of interest and scheduled repayments of loans or advances, in each
case, that are received by the Company and its Wholly Owned Subsidiaries from
the Project Companies during such period, (ii) 50% of the dividends,
distributions, payments of interest and scheduled repayments of loans or
advances, in each case, that are received by the Company and its Wholly Owned
Subsidiaries from any Person other than a Project Company during such period,
(iii) all payments received by the Company and its Wholly Owned Subsidiaries
during such period from any Person with respect to agreements to provide
development, construction or operations management and the provision of
consulting or advisory services; (iv) 50% of the combined interest income of the
Company and its Wholly Owned Subsidiaries for such period from cash, cash
equivalents and investments in marketable securities; (v) the interest income
(net of interest expense) of the Company and its Wholly Owned Subsidiaries from
the transactions referred to in clause (viii) of the definition of Permitted
Investments over (B) the aggregate amount (without duplication) of (i) the
combined selling, general and administrative expenses of the Company and its
Wholly Owned Subsidiaries for such period determined in accordance with GAAP and
(ii) the Company Designated Costs for such period and (iii) the total income
taxes paid by the Company and its Wholly Owned Subsidiaries during such period.
"ADJUSTED INTEREST EXPENSE" means, for any period, the sum of (without
duplication) (a) the combined interest expense of the Company and its Wholly
Owned Subsidiaries for such period as determined in accordance with GAAP,
including, without limitation or duplication, (i) amortization of debt issuance
costs or of original issue discount on any Indebtedness and the interest portion
of any deferred payment obligation, calculated in accordance with the effective
interest method of accounting, (ii) accrued interest, (iii) noncash interest
payments, (iv) commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing, (v) interest
actually paid by the Company or any Wholly Owned Subsidiary under any guarantee
of Indebtedness or other obligation of any other Person and (vi) net costs
associated with Interest Rate Agreements (including amortization of discounts)
and Currency Agreements of the Company or any Wholly Owned Subsidiary relating
to Indebtedness, plus (b) all but the principal component of rentals in respect
of Capitalized Lease Obligations paid, accrued, or scheduled to be paid or
accrued by the Company or any Wholly Owned Subsidiary, plus (c) capitalized
interest, plus (d) dividends paid in respect of Preferred Stock of the Company
or any Wholly Owned Subsidiary held by Persons other than the Company or any
Wholly Owned Subsidiary, plus (e) cash contributions to any employee stock
ownership plan to the extent such contributions are used by such employee stock
ownership plan to pay interest or fees to any person (other than the Company) in
connection with loans Incurred by such employee stock ownership plan to purchase
Capital Stock of the Company, plus (f) the interest expense of any Project
Company to the extent attributable to any Indebtedness of such Project Company
to the extent guaranteed by the Company or any Wholly Owned Subsidiary, minus
(g) interest expense of the Company or any Wholly Owned Subsidiary attributable
to Indebtedness referred to in clause (viii) of the definition of "Permitted
Investments."
"AES" means The AES Corporation, a Delaware corporation, its
successors, and any Subsidiary thereof.
"AFFILIATE" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Section 3.11 only, "Affiliate" shall also mean any beneficial owner
of 5% or more of the total Voting Shares (on a fully Diluted Basis) of the
Company or of rights or warrants to purchase such stock (whether or not
currently exercisable) and any Person who would be an Affiliate of any such
beneficial owner pursuant to the first sentence hereof.
"AGENT" means any Registrar, Paying Agent, authenticating agent,
co-registrar or additional paying agent.
"ASSET SALE" means any sale, transfer or other disposition (including
by way of merger, consolidation or sale leaseback transactions, but excluding
(except as provided for in the provisions described in the last paragraph of
Section 3.12(b)) those permitted by Article 4 hereof and those permitted by
Section 3.03 hereof) in one or a series of transactions by the Company or any
Project Company to any Person other than the Company or any Wholly Owned
Subsidiary, of (i) all or any of the Capital Stock of the Project Company, (ii)
all or substantially all of the assets of any operating unit, Facility or
division of the Company or any Project Company or (iii) any other property or
assets or rights to acquire property or assets of the Company or any Project
Company outside of the ordinary course of business of the Company or such
Project Company.
"ATTRIBUTABLE COSTS" means, for any period, the Company Designated
Costs for such period to the extent that such amount does not exceed an amount
calculated for such period at a rate equal to $10 million per annum (which shall
increase by 5% for each fiscal year beginning on or after December 1, 1997).
"AUTHORIZED OFFICERS" means with respect to the Company, the President,
the Chief Financial Officer and any vice president.
"AVERAGE LIFE" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the products of (A) the numbers of years from the date of determination
to the dates of each successive scheduled principal payment of such Indebtedness
or scheduled redemption or similar payment with respect to such Indebtedness or
Preferred Stock multiplied by (B) the amount of such payment by (ii) the sum of
all such payments.
"BANKRUPTCY CUSTODIAN" means any receiver, trustee, assignee,
liquidator, custodian or similar official under any Bankruptcy Law.
"BANKRUPTCY LAW" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or any similar
federal or state law or laws of Bermuda for the relief of debtors or the
administration, reorganization or liquidation of debtors' estates for the
benefit of their creditors.
"BERMUDA" means the British colony of Bermuda.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or any
authorized committee thereof.
"BOARD RESOLUTION" means a copy of a resolution certified by a director
of the Company to have been duly adopted by the Board of Directors to be in full
force and effect on the date of such certification, and delivered to the
Trustee.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York are authorized by law to close or
are otherwise not open for business. If any payment date hereunder or under the
Notes is not a Business Day, payment may be made at that place on the next
succeeding day that is a Business Day, and no interest shall accrue for the
intervening period. If a regular record date hereunder or under the Notes is not
a Business Day, the regular record date shall not be affected.
"CAPITAL STOCK" means any and all shares, interests (including joint
venture interests), participations or other equivalents (however designated) of
capital stock of a corporation or any and all equivalent ownership interests in
a Person (other than a corporation).
"CAPITALIZED LEASE" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person; the Stated
Maturity thereof shall be the date of the last payment of rent or any other
amount due under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty; and "Capitalized Lease
Obligations" means the rental obligations, as aforesaid, under such lease.
"CHANGE OF CONTROL" means the occurrence of any of the following
events: (i) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than AES or an underwriter engaged in a firm commitment
underwriting on behalf of the Company, is or becomes the beneficial owner (as
such term is used in Rules 13d-3 and 13d-5 under the Exchange Act, except that
for purposes of this clause (i) a person shall be deemed to have beneficial
ownership of all shares that such person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time), directly or
indirectly, of more than 35% of the total outstanding shares of Class A Common
Stock; (ii) AES is no longer entitled to elect at least one half of the members
of the Board of Directors; (iii) AES ceases to be the beneficial owner (as such
term is used in Rules 13d-3 and 13d-5 under the Exchange Act) of at least
6,000,000 Voting Shares of the Company (as adjusted from time to time for any
stock dividends, splits or recombinations after the Issue Date); or (iv) during
any period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors (together with any new directors whose
election by the Board of Directors or whose nomination for election by the
stockholders was approved by a vote of 66-2/3% of the directors of the Company
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of Directors then in
office.
"CHANGE OF CONTROL TRIGGERING EVENT" means either (x) the occurrence of
both an event specified in clause (i) or (iv) of the definition of Change of
Control and a Rating Decline or (y) the occurrence of an event specified in
clause (ii) or (iii) of the definition of Change of Control.
"CLASS A COMMON STOCK" means the Class A Common Stock, par value $0.01
per share, of the Company.
"CLASS B COMMON STOCK" means the Class B Common Stock, par value $0.01
per share, of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" has the meaning set forth in the Security Agreement.
"COLLATERAL ACCOUNT" has the meaning set forth in the Security
Agreement.
"COLLATERAL AGENT" means Bankers Trust Company as collateral agent, and
any successor thereof, under the Security Agreement.
"COMMISSION" means the Securities and Exchange Commission.
"COMPANY" means AES China Generating Co. Ltd., a Bermuda corporation,
until a successor replaces it pursuant to the terms and conditions of this
Indenture and thereafter means the successor.
"COMPANY DESIGNATED COSTS" means the total costs of development,
construction or operations management and the provision of consulting or
advisory services incurred by the Company and its Wholly Owned Subsidiaries (net
of any amounts received in reimbursement of such costs to the extent not in
excess of such costs).
"CONSOLIDATED CURRENT LIABILITIES," as of the date of determination,
means the aggregate amount of liabilities of the Company and its Consolidated
Restricted Subsidiaries which may properly be classified as current liabilities
(including taxes accrued as estimated), after eliminating (i) all inter-company
items between the Company and any Consolidated Subsidiary and (ii) deducting all
current maturities of long-term Indebtedness, all as determined in accordance
with GAAP.
"CONSOLIDATED NET INCOME (LOSS)" means, for any period, as applied to
the Company, the consolidated net income (loss) of the Company and its
Consolidated Restricted Subsidiaries for such period, determined in accordance
with GAAP, adjusted by excluding (without duplication), to the extent included
in such net income (loss), the following: (i) all extraordinary gains or losses;
(ii) any net income of any Person (other than the Company and its Consolidated
Restricted Subsidiaries), except that (A) the Company's equity in the net income
of any such Person for such period shall be included in Consolidated Net Income
(Loss) up to the aggregate amount of cash actually distributed by such Person
during such period to the Company or a Restricted Subsidiary as a dividend or
other distribution and (B) the equity of the Company or a Restricted Subsidiary
in a net loss of any such Person for such period shall be included in
determining Consolidated Net Income (Loss); (iii) the net income of any
Restricted Subsidiary to the extent that the declaration or payment of dividends
or similar distributions by such Restricted Subsidiary of such income is not at
the time thereof permitted, directly or indirectly, by operation of the terms of
its charter or bye-laws or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Restricted
Subsidiary or its stockholders; (iv) any net income (or loss) of any Person
combined with the Company or any of its Restricted Subsidiaries on a "pooling of
interests" basis attributable to any period prior to the date of such
combination; and (v) any gain (but not loss) realized upon the sale or other
disposition of any property, plant or equipment of the Company or its Restricted
Subsidiaries (including pursuant to any sale-and-leaseback arrangement) which is
not sold or otherwise disposed of in the ordinary course of business and any
gain (but not loss) realized upon the sale or other disposition by the Company
or any Restricted Subsidiary of any Capital Stock of any Person, provided that
losses shall be included on an after-tax basis; and further adjusted by
subtracting from such net income the tax liability of any parent of the Company
to the extent of payments made to such parent by the Company pursuant to any tax
sharing agreement or other arrangement for such period.
"CONSOLIDATED NET TANGIBLE ASSETS" means, as of any date of
determination, as applied to the Company, the total amount of assets (less
accumulated depreciation or amortization, allowances for doubtful receivables,
other applicable reserves and other properly deductible items) as set forth on
the most recently available quarterly or annual consolidated balance sheet of
the Company and its Consolidated Restricted Subsidiaries, determined in
accordance with GAAP, and after giving effect to purchase accounting and after
deducting therefrom, to the extent otherwise included, the amounts of: (i)
Consolidated Current Liabilities; (ii) minority interests in Consolidated
Subsidiaries held by Persons other than the Company or a Restricted Subsidiary;
(iii) excess of cost over fair value of assets of businesses acquired, as
determined in good faith by the Board of Directors as evidenced by a Board
Resolution; (iv) any revaluation or other write-up in value of assets subsequent
to December 31, 1995 as a result of a change in the method of valuation in
accordance with GAAP; (v) unamortized debt discount and expenses and other
unamortized deferred charges, goodwill, patents, trademarks, service marks,
trade names, copyrights, licenses, organization or developmental expenses and
other intangible items; (vi) treasury stock; (vii) any cash set apart and held
in a sinking or other analogous fund established for the purpose of redemption
or other retirement of Capital Stock to the extent such obligation is not
reflected in Consolidated Current Liabilities; and (viii) any Indebtedness of
the Company or a Restricted Subsidiary referred to in clause (viii) of the
definition of Permitted Investments.
"CONSOLIDATED NET WORTH" means, at any date of determination, as
applied to the Company, stockholders' equity as set forth on the most recently
available quarterly or annual consolidated balance sheet of the Company and its
Consolidated Restricted Subsidiaries, less any amounts attributable to
Redeemable Stock or Exchangeable Stock, the cost of treasury stock and the
principal amount of any promissory notes receivable from the sale of Capital
Stock of the Company or any Subsidiary.
"CONSOLIDATION" means, with respect to any Person, the consolidation of
accounts of such Person and each of its subsidiaries if and to the extent the
accounts of such Person and such subsidiaries are consolidated in accordance
with GAAP. The term "Consolidated" shall have a correlative meaning.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any Project Company against fluctuations in currency values to or
under which the Company or any Project Company is a party on the Issue Date or
becomes a party thereafter.
"DEBT SERVICE RESERVE ACCOUNT" has the meaning set forth in the
Security Agreement.
"DEFAULT" means any event which is, or, after notice or passage of time
or both, would be, an Event of Default.
"DEFAULTED INTEREST" means any interest on any Note which is payable,
but is not punctually paid or duly provided for on any Interest Payment Date.
"DEPOSITARY" means The Depository Trust Company, its nominees, and
their respective successors until a successor Depositary shall have become such
pursuant to the applicable provisions of this Indenture and thereafter
"Depositary" shall mean or include each Person who is then a Depositary
hereunder.
"DESIGNATED FINANCING" means any Incurrence of Indebtedness by an
Existing Subsidiary or Existing Joint Venture that refinances Shareholder Loans
in whole or in part.
"DOLLAR PERMITTED INVESTMENTS" means investments which are denominated
and payable in US dollars in any one or more of the following: (i)(a) direct,
interest-bearing obligations of the United States in certificated form; (b)
direct, interest-bearing obligations of, and guaranteed as to timely payment of
principal and interest by, the United States, but only if such obligations are
issued in the form of any entry made on the records of the Federal Reserve Bank
of New York; and (c) direct interest bearing obligations of, and interest
bearing obligations guaranteed as to timely payment of principal and interest
by, the Federal National Mortgage Association, the Government National Mortgage
Association, the Federal Home Loan Mortgage Corporation or the Student Loan
Marketing Association, but only if (A) at the time of investment, such
obligations are assigned the highest credit rating by the Rating Agency and (B)
such obligations have been deposited with The Depository Trust Company and its
successors, or are issued in the form of an entry made on the records of the
Federal Reserve Bank of New York; (ii) certificates of deposit with an original
term to maturity (x) of not more than 180 days or (y) with respect to the
amounts representing the interest payment amounts due on June 15, 1997 or
December 15, 1997, not exceeding the second Business Day prior to such date,
issued by any U.S. depositary institution or trust company whose principal
offices are located in the Borough of Manhattan, City and State of New York, New
York (including the Trustee acting in its individual capacity); provided that
the short-term unsecured debt obligations of such depositary institution or
trust company at the time of such investment are assigned a rating of "A-1" by
S&P and "P1" by ▇▇▇▇▇'▇ or the long-term unsecured debt obligations of such
depositary institution or trust company at the time of such investment, are
assigned a rating of "A-" or higher by S&P and "A3" or higher by ▇▇▇▇▇'▇; (iii)
repurchase obligations pursuant to a written agreement (a) with respect to any
obligation described in clause (i) above, where (in each case) the Trustee has
taken delivery of such obligation and (b) by a U.S. depositary institution or
trust company whose principal offices are located in the Borough of Manhattan,
City and State of New York, New York the short-term unsecured debt obligations
of which are rated "A-1" by S&P and "P-1" by ▇▇▇▇▇'▇ at the time of such
investment or the long-term unsecured debt obligations of which are rated "A-"
or higher by S&P and "A3" or higher by ▇▇▇▇▇'▇ (including, if applicable, the
Trustee acting in its individual capacity) at time of such investment; or (iv)
commercial paper that (a) is assigned a rating of "A-1" by S&P and "P-1" by
▇▇▇▇▇'▇ at the time of such investment and (b) had an original term to maturity
of not more than 180 days.
"DOLLARS," "$" AND "US DOLLARS" mean United States dollars.
"ELIGIBLE JOINT VENTURE" means a Joint Venture (other than a
Subsidiary) (i) that is formed with respect to the construction, development,
acquisition, servicing, ownership, improvement, operation or management of a
single Facility; (ii) in which the Company, directly or indirectly, owns at
least 25% of the Capital Stock therein and (iii) in respect of which the
Company, directly or indirectly, either (a) controls, by voting power,
membership on the board of directors or management committee or other similar
governing body, or through the provisions of any applicable partnership, joint
venture, shareholder or other similar agreement or under an operating,
maintenance or management agreement or otherwise, the management and operation
of the Joint Venture and any Facility of such Joint Venture or (b) otherwise has
the right to control or veto material acts and decisions with respect to the
management or operation of the Joint Venture that, taken as a whole, are
substantially similar to the rights of the Company with respect to the Existing
Joint Ventures as of the Issue Date.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EXCHANGEABLE STOCK" means any Capital Stock which by its terms is
exchangeable or convertible at the option of any Person other than the Company
into another security (other than Capital Stock of the Company which is neither
Exchangeable Stock nor Redeemable Stock).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXISTING JOINT VENTURE" means any of Chengdu-AES-Kaihua Gas Turbine
Power Co. Ltd., Wuhu Shaoda Electric Power Company Ltd. and Yangchun Fuyang
Diesel Engine Power Co. Ltd., and their respective successors, in each case, so
long as such Person is a Project Company.
"EXISTING PROJECT COMPANY NET CASH FLOW" means, for any period, (A) the
aggregate amount (without duplication) of dividends, distributions, payments of
interest and scheduled repayments of loans or advances (excluding any of such
amounts that constitute Special Proceeds), in each case, that are received by
the Company and its Wholly Owned Subsidiaries from Existing Joint Ventures and
Existing Subsidiaries during such period less (B) the sum of (i) Attributable
Costs for such period, (ii) the aggregate interest expense accrued with respect
to the Notes after June 15, 1998 and (iii) the aggregate principal amount of
Notes purchased from time to time by the Company (other than pursuant to an
Offer or a Change of Control Offer).
"EXISTING SUBSIDIARY" means any of Sichuan Fuling Aixi Power Company
Ltd., Hunan Xiangci-AES Hydro Power Company Ltd., Anhui Liyuan AES Power Company
Limited, the Hefei Zhongli Energy Company Ltd., Jiaozuo ▇▇▇ ▇▇▇▇ Power Ltd.,
Wuxi-AES-CAREC Gas Turbine Power Company Ltd. and Wuxi-AES-Zhonghang Power
Company Ltd., and their respective successors, in each case, so long as such
Person is a Project Company.
"FACILITY" means a power or steam generation facility or energy
producing facility and related assets (including without limitation electric
power transmission facilities or lines).
"FIXED CHARGE COVERAGE RATIO" as of any date of determination means the
ratio of (i) Adjusted Cash Flow for the period of the most recent four
consecutive fiscal quarters for which financial information is available to (ii)
the Adjusted Interest Expense for such period plus the Adjusted Interest Expense
for such period with respect to any Indebtedness proposed to be Incurred by the
Company and its Wholly Owned Subsidiaries; PROVIDED, HOWEVER, that, in making
such computation, the Adjusted Interest Expense attributable to interest on any
Indebtedness bearing a floating interest rate shall be computed on a pro forma
basis as if the rate in effect on the date of computation had been the
applicable rate for the entire period; and provided further, that in the event
(A) of the designation of any Restricted Subsidiary or Restricted Joint Venture
to be an Unrestricted Company during or after such period, or (B) the Company or
any Wholly Owned Subsidiary has made any Asset Sales, Designated Financings or
acquisitions of assets not in the ordinary course of business (including
acquisitions of other Persons by merger, consolidation or purchase of Capital
Stock), or has Incurred or repaid any Indebtedness (or any guarantee thereof has
terminated), during or after such period, or any Project Company has been
designated to be an Unrestricted Company (or redesignated as a Project Company)
during or after such period, such computation shall be made on a pro forma basis
as if such event had taken place on the first day of such period; and provided
further that the Adjusted Cash Flow with respect to any acquisitions shall not
exceed the net income attributable to the acquired assets for such period.
"FULLY DILUTED BASIS" means after giving effect to the exercise of any
outstanding options, warrants or rights to purchase Voting Shares and the
conversion or exchange of any securities convertible into or exchangeable for
Voting Shares.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect and, to the extent optional, adopted by the
Company on the Issue Date, consistently applied, including, without limitation,
those set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board.
"GUARANTEE" means, as applied to any obligation, contingent or
otherwise, of any Person, (i) a guarantee, direct or indirect, in any manner, of
any part or all of such obligation, (other than by endorsement of negotiable
instruments for collection in the ordinary course of business) and (ii) an
agreement, direct or indirect, contingent or otherwise, the practical effect of
which is to ensure in any way the payment or performance (or payment of damages
in the event of nonperformance) of any part or all of such obligation, including
the payment of amounts drawn down under letters of credit.
"HOLDER" OR "NOTEHOLDER" means the Person in whose name a Note is
registered on the Registrar's books.
"INCUR" means, as applied to any obligation, to create, incur, issue,
assume, guarantee or in any other manner become liable with respect to,
contingently or otherwise, such obligation, and "INCURRED," "INCURRENCE," and
"INCURRING" shall each have a correlative meaning; PROVIDED, HOWEVER, that any
Indebtedness or Capital Stock of a Person existing at the time such Person
becomes (after the Issue Date) a Project Company (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Project Company at the time it becomes a Project Company, and PROVIDED, FURTHER,
that any amendment, modification or waiver of any provision of any document
pursuant to which Indebtedness was previously Incurred shall not be deemed to be
an Incurrence of Indebtedness as long as (i) such amendment, modification or
waiver does not (A) increase the principal or premium thereof or interest rate
thereon, (B) change to an earlier date the Stated Maturity thereof or the date
of any scheduled or required principal payment thereon or the time or
circumstances under which such Indebtedness may or shall be redeemed, (C) if
such Indebtedness is contractually subordinated in right of payment to the
Notes, modify or affect, in any manner adverse to the Holders, such
subordination, (D) if the Company is the obligor thereon, provide that a Project
Company shall be an obligor, (E) if such Indebtedness is Non-Recourse Debt,
cause such Indebtedness to no longer constitute Non-Recourse Debt or (F)
violate, or cause the Indebtedness to violate, the provisions of Section 3.05 or
3.07 and (ii) such Indebtedness would, after giving effect to such amendment,
modification or waiver as if it were an Incurrence, comply with clause (i) of
the first proviso to the definition of "Refinancing Indebtedness."
"INDEBTEDNESS" of any Person means, without duplication, (i) the
principal of and premium (if any such premium is then due and owing) in respect
of (A) indebtedness of such Person for money borrowed and (B) indebtedness
evidenced by notes, debentures, bonds or other similar instruments for the
payment of which such Person is responsible or liable; (ii) all Capitalized
Lease Obligations of such Person; (iii) all obligations of such Person Incurred
as the deferred purchase price of property, all conditional sale obligations of
such Person and all obligations of such Person under any title retention
agreement; (iv) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction (other than obligations with respect to letters of credit securing
obligations (other than obligations described in (i) through (iii) above)
entered into in the ordinary course of business of such Person to the extent
such letters of credit are not drawn upon or, if and to the extent drawn upon,
such drawing is reimbursed no later than the tenth Business Day following
receipt by such Person of a demand for reimbursement following payment on the
letter of credit); (v) Redeemable Stock of such Person and, in the case of any
Subsidiary, any other Preferred Stock not owned by the Company or a Wholly Owned
Subsidiary, in either case valued at, in the case of Redeemable Stock, the
greater of its voluntary or involuntary maximum fixed repurchase price exclusive
of accrued and unpaid dividends or, in the case of Preferred Stock that is not
Redeemable Stock, its liquidation preference exclusive of accrued and unpaid
dividends; (vi) all obligations of such Person in respect of Interest Rate
Agreements and Currency Agreements; (vii) all obligations of the type referred
to in clauses (i) through (vi) of other Persons and all dividends of other
Persons for the payment of which, in either case, such Person is responsible or
liable, directly or indirectly, as obligor, guarantor or otherwise, including by
means of any guarantee; and (viii) all obligations of the type referred to in
clauses (i) through (vii) of other Persons secured by any Lien on any property
or asset of such Person (whether or not such obligation is assumed by such
Person), the amount of such obligation being deemed to be the lesser of the
value of such property or assets or the amount of the obligation so secured;
PROVIDED, HOWEVER, that Indebtedness shall not include trade accounts payable
arising in the ordinary course of business. For purposes hereof, the "maximum
fixed repurchase price" of any Redeemable Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Stock as if such Redeemable Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to this Indenture, and
if such price is based upon, or measured by, the fair market value of such
Redeemable Stock, such fair market value to be determined in good faith by the
Board of Directors as evidenced by a Board Resolution. The amount of
Indebtedness of any Person at any date shall be, with respect to unconditional
obligations, the outstanding balance at such date of all such obligations as
described above and, with respect to any contingent obligations at such date,
the maximum liability determined by such Person's board of directors, in good
faith, as, in light of the facts and circumstances existing at the time,
reasonably likely to be Incurred upon the occurrence of the contingency giving
rise to such obligation; provided that the amount outstanding at any time of any
Indebtedness issued with original issue discount is the face amount of such
Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness as determined in accordance with GAAP.
"INTEREST PAYMENT DATE" means the stated maturity of an installment of
interest on the Notes.
"INTEREST RATE AGREEMENT" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement or other similar agreement or arrangement designed
to protect against fluctuations in interest rates to or under which the Company
or any Project Company is a party on the Issue Date or becomes a party
thereunder.
"INVESTMENT" means, with respect to any Person, any direct or indirect
advance, loan or other extension of credit or capital contribution to (by means
of any transfer of cash or other property to others or any payment for property
or services for the account or use of others), or any other investment in any
other Person, or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or assets issued or owned by
any other Person (whether by merger, consolidation, amalgamation, sale of assets
or otherwise). For purposes of the provisions set forth in Section , (i)
"Investment" shall include the portion (proportionate to the Company's Equity
Interest in such Project Company) of the fair market value of the net assets of
any Project Company at the time such Project Company is designated an
Unrestricted Company and shall exclude the fair market value of the net assets
of any Unrestricted Company at the time that such Unrestricted Company is
designated a Project Company, as the case may be, and (ii) any property
transferred to or from an Unrestricted Company shall be valued at its fair
market value at the time of such transfer, in each case as determined by the
Board of Directors in good faith as evidenced by a Board Resolution.
"ISSUE DATE" means the date on which the Notes are originally issued
under this Indenture.
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether corporation, partnership or other legal form.
"LIEN" means any mortgage, lien, pledge, charge, or other security
interest or encumbrance of any kind (including any conditional sale or other
title retention agreement and any lease in the nature thereof).
"LINE OF BUSINESS" means the direct or indirect construction,
development, acquisition, servicing, ownership, improvement, operation and
management of Facilities and consulting or advisory activities related thereto.
"▇▇▇▇▇'▇" means ▇▇▇▇▇'▇ Investors Service, Inc. and its successors.
"NET AVAILABLE CASH" means, (A) with respect to any Designated
Financing, the aggregate amount of cash received by the Company or a Restricted
Subsidiary in repayment of Shareholder Loans in connection therewith; (B) with
respect to any Restricted Designation Event, an amount equal to the fair market
value of an Existing Subsidiary or Existing Joint Venture that is designated an
Unrestricted Company; and (C) with respect to any Asset Sale, the cash or cash
equivalent payments received by the Company or a Project Company in connection
with such Asset Sale (including any cash received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
or when received and also including the proceeds of other property received when
converted to cash or cash equivalents) net of the sum of, without duplication,
(i) all reasonable legal, title and recording tax expenses, reasonable
commissions, and other reasonable fees and expenses incurred directly relating
to such Asset Sale, (ii) all local, state, federal and foreign taxes required to
be paid or accrued as a liability by the Company or any Project Company as a
consequence of such Asset Sale, (iii) payments made to repay Indebtedness which
is secured by any assets subject to such Asset Sale in accordance with the terms
of any Lien upon or other security agreement of any kind with respect to such
assets, or which must by its terms, or by applicable law, be repaid out of the
proceeds from such Asset Sale and (iv) all distributions required by any
contract entered into other than in contemplation of such Asset Sale to be paid
to any holder of an Equity Interest in such Project Company as a result of such
Asset Sale, so long as such distributions do not exceed such holder's pro rata
portion (based on such holder's proportionate Equity Interest) of the cash or
cash equivalent payments described above, net of the amounts set forth in
clauses (i)-(iii) above.
"NET CASH PROCEEDS" means, with respect to any issuance or sale of
Capital Stock by any Person, the cash proceeds to such Person of such issuance
or sale net of attorneys' fees, accountants' fees, underwriters' or placement
agents' fees, discounts or commissions and brokerage, consultancy and other fees
actually incurred by such Person in connection with such issuance or sale and
net of taxes paid or payable by such Person as a result thereof.
"NON-CONVERTIBLE CAPITAL STOCK" means, with respect to any Person, any
Capital Stock of such Person which is not convertible into another security
other than non-convertible common stock of such Person; PROVIDED, HOWEVER, that
Non-Convertible Capital Stock shall not include any Redeemable Stock or
Exchangeable Stock.
"NON-RECOURSE DEBT" means Indebtedness of any Project Company (or of
any other Person that directly or indirectly owns the Capital Stock of such
Project Company as its sole assets) that is Incurred to acquire, develop,
improve, construct or to provide working capital for a Facility owned by such
Project Company, PROVIDED that such Indebtedness is without recourse to any
assets of the Company or any Project Company other than the assets or Capital
Stock of the Project Company Incurring such Indebtedness (or any other Person
that, directly or indirectly owns such Capital Stock as its sole assets) and the
income and proceeds therefrom. Indebtedness that does not comply with the
foregoing sentence because of a guarantee provided by the Company or another
Project Company will nevertheless qualify as Non-Recourse Debt so long as such
guarantee complies with the restrictions set forth under Section 3.04.
"NOTES" means all series of the 10 1/8 % Notes Due 2006 that are issued
under and pursuant to the terms of this Indenture, as amended or supplemented
from time to time.
"OFFERING" means the public offering and sale of the Notes.
"OFFICERS' CERTIFICATE" means a certificate signed by two Authorized
Officers of the Company, one of whom must be the President or Chief Financial
Officer of the Company. Each Officers' Certificate (other than certificates
provided pursuant to TIA Section 314(a)(4)) shall include the statements
provided for in TIA Section 314(e).
"OPERATING LEASE OBLIGATIONS" means any obligation of the Company and
its Restricted Subsidiaries on a Consolidated basis incurred or assumed under or
in connection with any lease of real or personal property which, in accordance
with GAAP, is not required to be classified and accounted for as a capital
lease.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel, if so acceptable, may be an employee of
or counsel to the Company or the Trustee. Each such Opinion of Counsel shall
include the statements provided for in TIA Section 314(e).
"PERMITTED INVESTMENTS" means (i) any Investment in any Restricted
Subsidiary (or any Person that would become a Restricted Subsidiary as a result
of such Investment) by the Company or any other Restricted Subsidiary or in the
Company by any Restricted Subsidiary; (ii) any Restricted Joint Venture
Investment; (iii) Investments in existence on the date of this Indenture and
Investments pursuant to letters of intent or legally binding commitments in
existence on the date of this Indenture; (iv) loans and advances made to
employees of the Company in the ordinary course of business consistent with past
practices; (v) loans and advances made by a Project Company to any Person in
connection with the provision of services by such Person to such Project
Company, the construction by such Person of fuel transportation facilities for
such Project Company or the construction by such Person of transmission
facilities or lines interconnecting such Project Company's Facility with an
electric power grid; (vi) any Investment in (a) obligations of the U.S.
government and its agencies or instrumentalities; (b) bank deposits and bank
obligations (including certificates of deposit, time deposits and bankers'
acceptances); (c) floating rate securities and other instruments issued by
governments or international development agencies; (d) commercial paper and
other short-term corporate debt obligations; (e) money market funds; and (f)
repurchase agreements with banks and broker-dealers with respect to securities
described in clauses (a) through (d) above; (vii) Dollar Permitted Investments;
and (viii) any loan made to or deposit made with any commercial banking
institution rated "A-" or higher by S&P and "A3" or higher by ▇▇▇▇▇'▇ in
connection with a substantially similar loan made by an affiliate of such
commercial banking institution to the Company or a Wholly Owned Subsidiary.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"PREFERRED STOCK," as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"PRINCIPAL" of a Note means the principal of the Note plus, if
applicable, the premium on the Note.
"PROJECT COMPANIES" means the Restricted Subsidiaries and Restricted
Joint Ventures and "Project Company" means any of them.
"RATING AGENCIES" means (i) S&P and ▇▇▇▇▇'▇ or (ii) if S&P or ▇▇▇▇▇'▇
or both shall not make a rating of the Notes publicly available, an
internationally recognized securities rating agency or agencies, as the case may
be, selected by the Company which shall be substituted for S&P or ▇▇▇▇▇'▇ or
both, as the case may be.
"RATING CATEGORY" means (i) with respect to S&P, any of the following
categories: AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor
categories, (ii) with respect to ▇▇▇▇▇'▇, any of the following categories: Aaa,
Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories) and
(iii) the equivalent of any such category used by another Rating Agency). In
determining whether the rating of the Notes has decreased by one or more
gradations, gradations within Rating Categories (+ and - for S&P; 1, 2 and 3 for
▇▇▇▇▇'▇) shall be taken into account (e.g., with respect to S&P, a decline in a
rating from BB+ to BB, as well as from BB- to B+, will constitute a decrease of
one gradation).
"RATING DECLINE" means the occurrence of (i) or (ii) below on, or
within 90 days after, the earliest of (A) the Company having become aware that a
Change of Control has occurred, (B) the date of public notice of the occurrence
of a Change of Control or (C) the date of public notice of the intention by AES
or the Company to approve, recommend or enter into, any transaction which, if
consummated, would result in a Change of Control (which period shall be extended
so long as the rating of the Notes is under publicly announced consideration or
possible downgrade by either of the Rating Agencies), (i) a decrease of the
rating of the Notes by either Rating Agency by one or more rating gradations or
(ii) the failure by the Company to advise the Rating Agencies, in writing, of
such occurrence or any subsequent material developments or to use its best
efforts to obtain, from at least one Rating Agency, a written, publicly
announced affirmation of its rating of the Notes, stating that it is not
downgrading and is not considering downgrading the Notes.
"REDEEMABLE STOCK" means any class or series of Capital Stock of any
Person that (a) by its terms, by the terms of any security into which it is
convertible or exchangeable or otherwise is, or upon the happening of an event
or passage of time would be, required to be redeemed (in whole or in part) on or
prior to the first anniversary of the Stated Maturity of the Notes, (b) is
redeemable at the option of the holder thereof at any time on or prior to the
first anniversary of the Stated Maturity of the Notes (other than on a Change of
Control or Asset Sale, provided that such Change of Control or Asset Sale shall
not yet have occurred) or (c) is convertible into or exchangeable for Capital
Stock referred to in clause (a) or clause (b) above or debt securities at any
time prior to the first anniversary of the Stated Maturity of the Notes.
"REFINANCING INDEBTEDNESS" means Indebtedness that refunds, refinances,
replaces, renews, repays or extends (including pursuant to any defeasance or
discharge mechanism) (collectively, "refinances," and "refinanced" shall have a
correlative meaning) any Indebtedness of the Company or a Project Company
existing on the Issue Date or Incurred in compliance with this Indenture
(including Indebtedness of the Company that refinances Indebtedness of any
Project Company and Indebtedness of any Project Company that refinances
Indebtedness of another Project Company) including Indebtedness that refinances
Refinancing Indebtedness; PROVIDED, HOWEVER, that (i) if the Indebtedness being
refinanced is contractually subordinated in right of payment to the Notes, the
Refinancing Indebtedness shall be contractually subordinated in right of payment
to the Notes to at least the same extent as the Indebtedness being refinanced,
(ii) if the Indebtedness being refinanced is Non-Recourse Debt, such Refinancing
Indebtedness shall be Non-Recourse Debt, (iii) the Refinancing Indebtedness is
scheduled to mature either (a) no earlier than the Indebtedness being refinanced
or (b) after the Stated Maturity of the Notes, (iv) the Refinancing Indebtedness
has an Average Life at the time such Refinancing Indebtedness is Incurred that
is equal to or greater than the Average Life of the Indebtedness being
refinanced and (v) such Refinancing Indebtedness is in an aggregate principal
amount (or if issued with original issue discount, an aggregate issue price)
that is equal to or less than the aggregate principal amount (or if issued with
original issue discount, the aggregate accreted value) then outstanding (plus
fees and expenses, including any premium, swap breakage and defeasance costs)
under the Indebtedness being refinanced; and PROVIDED, FURTHER, that (x)
Refinancing Indebtedness shall not include Indebtedness of a Project Company
that refinances Indebtedness of the Company; (y) the provisions of clauses (iii)
and (iv) above shall not be applicable with respect to any Refinancing
Indebtedness that refinances Shareholder Loans; and (z) Refinancing Indebtedness
that refinances Shareholder Loans of any Person other than the Company or any of
its Subsidiaries shall be PARI PASSU or subordinated to the Shareholder Loans
being refinanced.
"RESTRICTED DESIGNATION EVENT" means the designation by the Board of
Directors of the Company of any Existing Subsidiary or Existing Joint Venture to
be an Unrestricted Company.
"RESTRICTED JOINT VENTURE" means any Eligible Joint Venture of the
Company that is not designated an Unrestricted Joint Venture by the Board of
Directors.
"RESTRICTED JOINT VENTURE INVESTMENT" means any Investment which is
made by the Company or a Restricted Subsidiary in a Restricted Joint Venture;
PROVIDED that (i) at the time such Investment is made, no Default or Event of
Default shall have occurred and be continuing (or would result therefrom); (ii)
the aggregate Investment in one or more Restricted Joint Ventures operating the
same Facility does not exceed 15% of Consolidated Net Tangible Assets; PROVIDED
THAT such restriction shall not apply to any Investment in (A) Yangcheng
International Power Generating Company Ltd., or its successors and (B) Tianjin
TEDA-AES Power Co. Ltd. or its successors, and PROVIDED, FURTHER, that such
restriction shall not apply to a single additional Investment of up to $100
million in the event that the Company does not make either of the Investments
described in clauses (A) and (B); and (iii) any encumbrance or restriction on
the ability of the Person in which the Investment is made to make the payments,
distributions, loans, advances or transfers referred to in clauses (i) through
(iii) under Section that would apply immediately following the making of the
Investment could be created or permitted to exist pursuant to clause (d), (g) or
(h) under Section 3.05 or in the written opinion of the President or Chief
Financial Officer of the Company (x) are not materially more restrictive, taken
as a whole, than encumbrances and restrictions customarily accepted (or, in the
absence of any industry custom, reasonably acceptable) in substantially
non-recourse project financings and (y) apply only to the assets of the Person
in whom the Investment is made, the Capital Stock of such Person (or any other
Person that, directly or indirectly owns such Capital Stock as its sole assets)
and the income and proceeds therefrom.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company that is not
designated an Unrestricted Subsidiary by the Board of Directors.
"S&P" means Standard and Poor's Corporation and its successors.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time.
"SECURITY AGREEMENT" means the security agreement dated as of the date
hereof among the Company, the Trustee and the Collateral Agent.
"SERVICES AGREEMENT" means the Services Agreement dated as of December
29, 1993 between the Company and ------------------ AES.
"SHAREHOLDER LOAN" means Indebtedness of a Project Company that is
payable to a holder of Equity Interests in such Project Company.
"SPECIAL PROCEEDS EVENT" means (i) any Asset Sale of the assets,
property or Capital Stock of any Existing Subsidiary or Existing Joint Venture
(or any other Person that, directly or indirectly, owns such Capital Stock as
its sole assets), (ii) any Designated Financing or (iii) any Restricted
Designation Event.
"SPECIAL PROCEEDS" means, with respect to any Special Proceeds Event,
the Net Available Cash from such Special Proceeds Event; PROVIDED that the Net
Available Cash from a Special Proceeds Event relating to an Existing Subsidiary
shall not constitute Special Proceeds if and to the extent that: (A) the
aggregate amount of Net Available Cash from all Special Proceeds Events excluded
from the definition of Special Proceeds under this proviso after the Issue Date
does not exceed $30 million; (B) at the date of such Special Proceeds Event, the
Fixed Charge Coverage Ratio is greater than 2.25:1.0; and (C) with respect to
any Asset Sale, the Facilities owned by each of the Existing Subsidiaries and
each of the Existing Joint Ventures have commenced commercial operation; and
PROVIDED FURTHER, that the Net Available Cash from any Special Proceeds Event
relating to an Existing Joint Venture shall not constitute Special Proceeds if
and to the extent that (A) at the date thereof, the Fixed Charge Coverage Ratio
is greater than 2.25:1.0 and (B) with respect to any Asset Sale, the Facilities
owned by each of the Existing Subsidiaries and each of the Existing Joint
Ventures have commenced commercial operation.
"STATED MATURITY" means, with respect to any security, the date
specified in such security as the fixed date on which the principal is due and
payable, including pursuant to any mandatory redemption provision (but excluding
any provision providing for the repurchase of such security at the option of the
holder thereof upon the happening of any contingency).
"SUBORDINATED INDEBTEDNESS" means any Indebtedness of the Company
(whether outstanding on the Issue Date or thereafter Incurred) which is
contractually subordinated or junior in right of payment to the Notes or any
other Indebtedness of the Company.
"SUBSIDIARY" means, as applied to any Person, any corporation or other
entity of which a majority of the outstanding Voting Shares is, at the time,
directly or indirectly, owned by such Person.
"TAX" means any tax, duty, levy, impost, assessment or other
governmental charge of a similar nature (including penalties, interest and any
other liabilities related thereto.
"TAXING AUTHORITY" means any government or political subdivision or
territory or possession of any government or any authority or agency therein or
thereof having power to tax.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ▇▇.▇▇.
77aaa-77bbbb) as in effect on the date first above written.
"TRUSTEE" means the party named as such above until a successor
replaced it and thereafter means the successor.
"TRUST OFFICER" means any officer of the Trustee within its Corporate
Trust and Agency Group assigned by the Trustee to administer its corporate trust
matters or to whom any corporate trust matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"UNIFORM COMMERCIAL CODE" means the New York Uniform Commercial Code as
in effect from time to time.
"UNRELATED BUSINESS" means any business other than the Line of
Business.
"UNRESTRICTED COMPANIES" means the Unrestricted Subsidiaries and
Unrestricted Joint Ventures and "Unrestricted Company" means any of them.
"UNRESTRICTED JOINT VENTURE" means: (i) any Eligible Joint Venture that
at the time of determination shall be designated an Unrestricted Joint Venture
by the Board of Directors in the manner provided below; (ii) any Joint Venture
of an Unrestricted Subsidiary; or (iii) any Joint Venture of the Company that is
not an Eligible Joint Venture. The Board of Directors may designate any Eligible
Joint Venture (including any newly acquired or newly formed Eligible Joint
Venture) to be an Unrestricted Joint Venture unless such Eligible Joint Venture
owns any Capital Stock of, or owns or holds any Lien on any property of, the
Company or any other Restricted Joint Venture; provided, that either (A) the
Eligible Joint Venture to be so designated has total assets of $1,000 or less or
(B) if such Eligible Joint Venture has assets greater than $1,000, that such
designation would be an investment permitted pursuant to the provisions under
Section 3.03. The Board of Directors may designate any Unrestricted Joint
Venture to be a Restricted Joint Venture; PROVIDED, HOWEVER, that immediately
after giving effect to such designation (x) the Company could Incur $1.00 of
additional Indebtedness pursuant to Subsection 3.04(a) and no Default or Event
of Default shall have occurred and be continuing. Any such designation by the
Board of Directors shall be evidenced to the Trustee by promptly filing with the
Trustee a copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions; PROVIDED, HOWEVER, that the failure to so file such
resolution and/or Officers' Certificate with the Trustee shall not impair or
affect the validity of such designation.
"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds
any Lien on any property of, the Company or any Project Company that is not a
Subsidiary or Joint Venture of the Subsidiary to be so designated; provided,
that either (A) the Subsidiary to be so designated has total assets of $1,000 or
less or (B) if such Subsidiary has assets greater than $1,000, that such
designation would be permitted pursuant to Section 3.03. The Board of Directors
may designate any Unrestricted Subsidiary to be a Restricted Subsidiary of the
Company; PROVIDED, HOWEVER, that immediately after giving effect to such
designation (x) the Company could Incur $1.00 of additional Indebtedness
pursuant to Section 3.04(a) and (y) no Default or Event of Default shall have
occurred and be continuing. Any such designation by the Board of Directors shall
be evidenced to the Trustee by promptly filing with the Trustee a copy of the
Board Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing provisions;
PROVIDED, HOWEVER, that the failure to so file such resolution and/or Officers'
Certificate with the Trustee shall not impair or affect the validity of such
designation.
"U.S. GOVERNMENT OBLIGATIONS" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America which, in either case under
clauses (i) or (ii) are not callable or redeemable before the maturity thereof.
"VOTING SHARES," with respect to any Person, means the Capital Stock
having the general voting power under ordinary circumstances to vote on the
election of the members of the board of directors or other governing body of
such Person (irrespective of whether or not at the time stock of any other class
or classes shall have or might have voting power by reason of the happening of
any contingency) and, with respect to the Company, shall include the Class A
Common Stock and the Class B Common Stock and any other Voting Shares of the
Company.
"WHOLLY OWNED SUBSIDIARY" means a Subsidiary (other than an
Unrestricted Subsidiary) all the Capital Stock of which (other than directors'
qualifying shares) is owned by the Company or another Wholly Owned Subsidiary.
SECTION 1.02. OTHER DEFINITIONS.
TERM DEFINED IN SECTION
---- ------------------
"Additional Amounts"............................... 3.06
"Change of Control Offer".......................... 3.08
"Change of Control Purchase Date".................. 3.08
"Event of Default"................................. 5.01
"Excess Proceeds".................................. 3.12(b)
"Excess Proceeds Offer"............................ 3.12(b)
"Global Note"...................................... 2.01
"Intermediate Holding Company"..................... 3.20
"Notice of Default"................................ 5.01
"Offer"............................................ 3.12(d)
"Offer Amount"..................................... 3.12(d)
"Paying Agent"..................................... 2.03
"Purchase Date".................................... 3.12(d)
"Registrar"........................................ 2.03
"Restricted Payment"............................... 3.03(a)
"Successor Corporation"............................ 4.01
"Special Proceeds Offer"........................... 3.12(d)
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder or Noteholder;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and
"OBLIGOR" on the indenture securities means the Company.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule under
the TIA have the meanings assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means, and any
accounting term not otherwise defined has the meaning assigned to it and shall
be construed in accordance with, GAAP;
(c) "OR" is not exclusive
(d) words in the singular include the plural, and in the plural include
the singular;
(e) provisions apply to successive events and transactions;
(f) "INCLUDING" means including, without limitation; (g) unsecured debt
shall not be deemed to be subordinate or junior to secured debt merely by virtue
of its nature as unsecured debt;
(h) the principal amount of any non-interest bearing or other discount
security at any date shall be the principal amount thereof that would be shown
on a balance sheet of the issuer dated such date prepared in accordance with
generally accepted accounting principles and accretion of principal on such
security shall be deemed to be the Incurrence of Indebtedness; and
(i) the principal amount (if any) of any Preferred Stock shall be the
greatest of (i) the stated value, (ii) the redemption price or (iii) the
liquidation preference of such Preferred Stock.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication, shall be
substantially in the form of Exhibit A annexed hereto, which is part of this
Indenture. The Notes may have notation, legends or endorsements required by law,
stock exchange rule or usage. Each Note shall be dated the date of its
authentication.
The terms and provisions contained in the form of Note annexed hereto
as Exhibit A shall constitute, and are expressly made, a part of this Indenture.
To the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.
The Notes shall be issued initially in the form of a single permanent
global note in fully registered form without interest coupons substantially in
the form of Exhibit A with such legends as may be applicable thereto, only in
denominations of $1,000 and integral multiples thereof (the "Global Note"),
deposited with the Trustee as custodian for the Depositary and registered in the
name of Cede & Co., as nominee of the Depositary, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The Global Note shall
bear such legend as may be required or reasonably requested by the Depositary.
The definitive Notes shall be typed, printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes may
be listed, all as determined by the officers executing such Notes, as evidenced
by their execution of such Notes.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
An Authorized Officer shall sign the Notes for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Notes.
If an Authorized Officer whose signature is on a Note no longer holds
that office at the time the Note is authenticated, the Note shall nevertheless
be valid.
A Note shall not be valid until authenticated by the manual signature
of an authorized signatory of the Trustee. The signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.
The Trustee shall authenticate Notes for original issue up to the
aggregate principal amount stated in paragraph 1 of Exhibit A upon a written
order of the Company signed by two Authorized Officers (except as otherwise
provided in Section 2.07). Such order shall specify the amount of the Notes to
be authenticated and the date on which the original issue of Notes is to be
authenticated. The aggregate principal amount of Notes outstanding at any time
may not exceed that amount except as provided in Section 2.07.
The Trustee shall initially act as authenticating agent and may
subsequently appoint another Person acceptable to the Company as authenticating
agent to authenticate Notes. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company or an Affiliate of the Company. Provided that the
authenticating agent has entered into an agreement with the Company concerning
authentication agent's duties, the Trustee shall not be liable for any act or
any failure of the authenticating agent to perform any duty either required
herein or authorized herein to be performed by such person in accordance with
this Indenture.
Typographical and other minor errors or defects in any such
reproduction of the seal or any such signature shall not affect the validity or
enforceability of any Note which has been duly authenticated and delivered by
the Trustee.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("REGISTRAR") and an
office or agency where Notes may be presented for payment ("PAYING AGENT"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "PAYING AGENT" includes any additional paying agent and
the term "REGISTRAR" includes any co-registrar.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture. The
agreement shall implement the provisions of this Indenture that relate to such
agent. The Company shall promptly notify the Trustee of the name and address of
any such agent and change in the address of such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 6.07. The
Company or any Subsidiary or Affiliate of the Company may act as Paying Agent,
Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
On or prior to 11:00 a.m., eastern standard time, on each due date of
the principal and interest on any Note (including any redemption date fixed
under the terms of such Note or this Indenture) the Company shall deposit with
the Paying Agent a sum of money, in immediately available funds, sufficient to
pay such principal and interest in funds available when such becomes due. The
Company shall require each Paying Agent (other than the Trustee) to agree in
writing that the Paying Agent shall hold in trust for the benefit of Noteholders
or the Trustee all money held by the Paying Agent for the payment of principal
of or interest on the Notes (whether such money has been paid to it by the
Company or any other obligor on the Notes) and shall notify the Trustee of any
default by the Company (or any other obligor on the Notes) in making any such
payment. If the Company or a Subsidiary or an affiliate of the Company acts as
Paying Agent, it shall segregate the money held by it as Paying Agent and hold
it as a separate trust fund for the benefit of the Noteholders. If the Company
defaults in its obligation to deposit funds for the payment of principal and
interest the Trustee may, during the continuation of such default, require a
Paying Agent to pay all money held by it to the Trustee. The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed by it. Upon doing so, the Paying Agent (other
than the Company or a Subsidiary or Affiliate of the Company) shall have no
further liability for the money delivered to the Trustee.
SECTION 2.05. NOTEHOLDER LISTS.
The Trustee shall preserve in as current a form as reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders. If the Trustee is not the Registrar, the Company shall furnish to
the Trustee at least five Business Days before each Interest Payment Date and at
such other times as the Trustee may request in writing a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Noteholders and the Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE; DEFINITIVE NOTE.
(a) The Notes shall be transferable only upon the surrender of a Note
for registration of transfer. When a Note is presented to the Registrar or a
co-registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of Section 8-401(1) of the Uniform
Commercial Code are met (and the Registrar shall be entitled to assume such
requirements have been met unless it receives written notice to the contrary)
and, if so required by the Trustee or the Company, if the Note presented is
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Company, duly executed by the registered owner or by his or her
attorney duly authorized in writing. When Notes are presented to the Registrar
or a co-registrar with a request to exchange them for an equal principal amount
of Notes of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit registration of transfers
and exchanges, the Company shall execute and the Trustee shall authenticate
Notes at the Registrar's or co-registrar's request. No service charge shall be
made for any registration of transfer or exchange of the Notes, but the Company
may require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchange pursuant to
Section 2.10 or 8.05 of this Indenture). The Company shall not be required to
make and the Registrar need not register transfers or exchanges of Notes
selected for redemption (except, in the case of Notes to be redeemed in part,
the portion thereof not to be redeemed) or for a period of 15 days before a
selection of Notes to be redeemed or 15 days before an interest payment date.
(b) Prior to the due presentation for registration of transfer of any
Note, the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Note is registered as
the absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Note and for all other purposes whatsoever,
whether or not such Note is overdue, and none of the Company, the Trustee, the
Paying Agent, the Registrar or any co-registrar shall be affected by notice to
the contrary.
(c) Notwithstanding any other provisions of this Section 2.06, unless
and until it is exchanged in whole or in part for Notes in definitive registered
form, the Global Note representing all or a portion of the Notes may not be
transferred except as a whole by the Depositary to a nominee of such Depositary
or by a nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary.
(d) If the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for the Global Notes or if at any time the
Depositary shall no longer be registered under the next sentence of this
paragraph, the Company shall appoint a successor Depositary with respect to the
Notes. Each Depositary appointed pursuant to this Section 2.06 must, at the time
of its appointment and at all times while it serves as Depositary, be a clearing
agency registered under the Exchange Act and any other applicable statute or
regulation. The Company will execute, and the Trustee will authenticate and
deliver upon a written order of the Company signed by two Authorized Officers,
Notes in definitive registered form in any authorized denominations representing
such Notes in exchange for the Global Note if (i) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for the Global
Note or if at any time the Depositary ceases to be a clearing agency registered
under the Exchange Act at any time when it is required to be and, in either
case, a successor Depositary for the Notes is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware that the
Depositary is no longer so registered, (ii) the Company determines in accordance
with the next paragraph of this subsection (d) that the Global Note shall be
exchanged or exchangeable for Notes in definitive registered form or (iii) an
Event of Default has occurred and is continuing.
The Company may at any time and in its sole discretion determine that
the Notes shall no longer be represented by the Global Note. In such event the
Company will execute, and the Trustee will authenticate and deliver upon a
written order of the Company signed by two Authorized Officers, Notes in
definitive registered form in any authorized denominations representing such
Notes in exchange for such Global Note.
(e) Upon the exchange of the Global Note for Notes in definitive
registered form without coupons, in authorized denominations, such Global Note
shall be canceled by the Trustee. Notes in definitive registered form issued in
exchange for the Global Note pursuant to this Section 2.06 shall be registered
in such names and in such authorized denominations as the Depositary for the
Global Note pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver such Notes to
or as directed by the Persons in whose names such Notes are so registered.
All Notes issued upon any transfer or exchange pursuant to the terms of
this Indenture will evidence the same debt and will be entitled to the same
benefits under this Indenture as the Notes surrendered upon such transfer or
exchange.
SECTION 2.07. REPLACEMENT NOTES.
If a mutilated security is surrendered to the Registrar or if the
Holder of a Note claims that the Note has been lost, destroyed or wrongfully
taken and the Holder furnishes to the Company and the Trustee evidence to their
satisfaction of such loss, destruction or wrongful taking, the Company shall
issue and the Trustee shall, in the absence of notice to the Company or the
Trustee that such Note has been acquired by a bona fide purchaser, authenticate
a replacement Note if the requirements of Section 8-405 of the Uniform
Commercial Code are met (and the Registrar shall be entitled to assume such
requirements have been met unless it receives written notice to the contrary)
and if there is delivered to the Company and the Trustee such security or
indemnity as may be required to save each of them harmless, satisfactory to the
Company or the Trustee, as the case may be. The Company and the Trustee may
charge the Holder for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to the benefits of (but shall be subject to all the
limitations of rights set forth in) this Indenture.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, and those described in this section as not outstanding.
If a Note is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Note is held by a bona fide purchaser.
If all the principal and interest on any Notes are considered paid
under Section 3.01, such Notes cease to be outstanding under this Indenture and
interest on such Notes shall cease to accrue. If the Paying Agent (other than
the Company or a Subsidiary or an Affiliate of the Company) holds in accordance
with this Indenture on a redemption date or maturity date money sufficient to
pay all principal and interest due on that date then on and after that date such
Notes cease to be outstanding and interest on them ceases to accrue (unless
there shall be a default in such payment).
If a Note is called for redemption, the Company and the Trustee need
not treat the Note as outstanding in determining whether Holders of the required
principal amount of Notes have concurred in any direction, waiver or consent.
Subject to Section 2.09, a Note does not cease to be outstanding
because the Company or an Affiliate thereof holds the Note.
SECTION 2.09. DETERMINATION OF HOLDERS' ACTION.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, amendment, waiver or consent, Notes owned
by or pledged to the Company, any other obligor upon the Notes or any Affiliate
of the Company or such other obligor shall be disregarded and deemed not to be
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which the Trustee knows are so owned or pledged shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes. Without unreasonable delay,
the Company shall prepare and the Trustee, upon the written order of the Company
signed by two Authorized Officers, shall authenticate definitive Notes in
exchange for temporary Notes. Until such exchange, temporary Notes shall be
entitled to the same rights, benefits and privileges as definitive Notes.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee shall cancel all Notes surrendered for registration of transfer,
exchange, payment or cancellation and shall destroy the same or otherwise
dispose of canceled Notes as the Company directors by written order signed by
two Authorized Officers. The Company may not issue new Notes to replace Notes
that it has paid or delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it shall
pay defaulted interest, plus any interest payable on the defaulted interest to
the extent permitted by law, in any lawful manner. The Company may pay the
defaulted interest to the Persons who are Noteholders on a subsequent special
record date which date shall be at least five Business Days prior to the payment
date. The Company shall fix the special record date and payment date. At least
15 days before the special record date, the Company (or the Trustee, in the name
of and at the expense of the Company) shall mail to Noteholders a notice that
states the special record date, payment date and amount of interest to be paid.
ARTICLE 3
COVENANTS
SECTION 3.01. PAYMENT OF NOTES.
(a) The Company shall pay the principal of and interest on the Notes on
the dates and in the manner provided in the Notes. The Company shall pay
interest on overdue principal at the rate borne by the Notes; it shall pay
interest on overdue installments of interest at the rate borne by the Notes to
the extent lawful. Principal and interest shall be considered paid on the date
due (including a redemption date) if the Trustee or the Paying Agent (other than
the Company or a Subsidiary or an Affiliate of the Company) has received from or
on behalf of the Company on or prior to 11:00 a.m., eastern standard time, on
that date, in immediately available funds, money sufficient to pay all principal
and interest then due. To the extent that the Trustee or the Paying Agent shall
not have received all or any part of such money at such time, the Trustee shall
request the Collateral Agent to transfer to the Trustee from the Debt Service
Reserve Account an amount equal to any such defficiency.
(b) At least five Business Days prior to the first interest payment
date and, if there has been any change with respect to the matters set forth in
the below-mentioned certificate, at least five Business Days prior to each
interest payment date thereafter, the Company shall furnish the Trustee with an
Officers' Certificate instructing the Trustee as to any circumstances in which
payments of principal of or interest on the Notes due on such date shall be
subject to deduction or withholding for or on account of any taxes described in
Section 3.06 and the rate of any such deduction or withholding. If any such
deduction or withholding shall be required and if the Company therefore becomes
liable to pay Additional Amounts, if any, pursuant to Section 3.06, then, at
least five Business Days prior to each interest payment date, the Company will
furnish the Trustee with a certificate which specifies the amount required to be
withheld on such payment to Holders of the Notes and the Additional Amounts, if
any, due to Holders of the Notes, and will pay to the Trustee such Additional
Amounts, if any, as shall be required to be paid to such Holders.
SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency where Notes may be surrendered for registration of
transfer or exchange or for presentation for payment and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in Section 11.02 of this Indenture.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York, for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby initially designates the office of Bankers Trust
Company in the Borough of Manhattan, the City of New York, as such office of the
Company in accordance with Section 2.03.
SECTION 3.03. LIMITATION ON RESTRICTED PAYMENTS.
(a) So long as any of the Notes are outstanding, the Company shall not,
and shall not permit any Project Company to, directly or indirectly, (i) declare
or pay (either in cash or property) any dividend on or make any distribution or
similar payment of any sort in respect of its Equity Interests (including any
payment in connection with any merger or consolidation involving the Company) to
the direct or indirect holders of its Equity Interests (other than dividends or
distributions payable solely in its Non-Convertible Capital Stock or rights to
acquire its Non-Convertible Capital Stock and dividends or distributions by a
Project Company that are paid to the Company or a Wholly Owned Subsidiary and to
the other holders of Equity Interests in such Project Company (A) in accordance
with the joint venture contract, articles of association or other constituent
document governing such Project Company or (B) as permitted by applicable law),
(ii) purchase, redeem, defease or otherwise acquire or retire for value any
Equity Interests of the Company or AES, or, with respect to the Company,
exercise any option to exchange any Equity Interests that by their terms are
exchangeable solely at the option of the Company (other than into Capital Stock
of the Company which is neither Exchangeable Stock nor Redeemable Stock), (iii)
purchase, repurchase, redeem, defease or otherwise acquire or retire for value,
prior to scheduled maturity or scheduled repayment thereof or scheduled sinking
fund payment thereon, any Subordinated Indebtedness or (iv) make any Investment,
other than a Permitted Investment (each such payment described in clauses
(i)-(iv) of this paragraph, a "Restricted Payment"), unless at the time of and
after giving effect to the proposed Restricted Payment:
(1) no Default or Event of Default shall have occurred and be
continuing (or would result therefrom);
(2) the Company would be permitted to Incur an additional $1.00 of
Indebtedness pursuant to the provisions of Section 3.04(a); and
(3) the aggregate amount of all such Restricted Payments subsequent to
the Issue Date shall not exceed the sum of
(A) 50% of aggregate Consolidated Net Income accrued during
the period (treated as one accounting period) from December 1, 1996
to the end of the most recent fiscal quarter for which financial
statements are available (or if such Consolidated Net Income is a
deficit, minus 100% of such deficit);
(B) the aggregate Net Cash Proceeds received by the Company
after the Issue Date from the sale of Equity Interests (other than
Redeemable Stock or Exchangeable Stock) of the Company to any person
other than the Company, any of its Subsidiaries or an employee stock
ownership plan;
(C) the amount by which the principal amount of, and any
accrued interest on, Indebtedness of the Company or its Restricted
Subsidiaries (other than Shareholder Loans) is reduced on the
Company's Consolidated balance sheet upon the conversion or exchange
(other than by a Subsidiary) subsequent to the Issue Date of any
Indebtedness of the Company or any Restricted Subsidiary converted
or exchanged for Capital Stock (other than Redeemable Stock or
Exchangeable Stock) of the Company (less the amount of any cash, or
the value of any other property, distributed by the Company or any
such Restricted Subsidiary upon such conversion or exchange); and
(D) an amount equal to the net reduction in Investments after
the Issue Date in Unrestricted Companies resulting from payments of
interest on Indebtedness, dividends, repayments of loans or
advances, or other transfers of assets, in each case to the Company
or any Project Company from Unrestricted Companies or from
redesignations of Unrestricted Companies as Project Companies
(valued in each case as provided in the definition of
"Investments"), not to exceed in the case of any Unrestricted
Company the amount of Investments previously made by the Company or
any Project Company in such Unrestricted Company.
(b) The failure to satisfy the conditions set forth in clauses (2) and
(3) of Subsection 3.03(a) shall not prohibit any of the following as long as the
condition set forth in clause (1) of Subsection 3.03(a) is satisfied (except as
set forth below):
(i) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with Subsection 3.03(a); PROVIDED that, solely for purposes of this clause
(i), it shall not be necessary to satisfy the condition set forth in clause
(1) of Subsection 3.03(a) at the date of payment if such clause is
satisfied at the date of declaration;
(ii) any purchase, redemption, defeasance, or other acquisition or
retirement for value of Capital Stock of the Company or Subordinated
Indebtedness made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock of the Company (other than
Redeemable Stock or Exchangeable Stock and other than stock issued or sold
to a Subsidiary or to an employee stock ownership plan), PROVIDED, that
such purchase, redemption, defeasance or other acquisition or retirement
shall not be included in the calculation of Restricted Payments made for
purposes of clause (3) of Subsection and PROVIDED, FURTHER, that the Net
Cash Proceeds from such sale shall be excluded from sub-clause B of clause
(3) of Subsection 3.03(a);
(iii) any purchase, redemption, defeasance or other acquisition or
retirement for value of Subordinated Indebtedness made by exchange for, or
out of the proceeds of the substantially concurrent Incurrence of for cash
(other than to a Subsidiary), new Indebtedness of the Company, PROVIDED,
HOWEVER, that (A) such new Indebtedness shall be contractually subordinated
in right of payment to the Notes at least to the same extent as the
Indebtedness being so redeemed, repurchased, defeased, acquired or retired,
(B) such new Indebtedness has a Stated Maturity either (1) no earlier than
the Stated Maturity of the Indebtedness redeemed, repurchased, defeased,
acquired or retired or (2) after the Stated Maturity of the Notes and (C)
such Indebtedness has an Average Life equal to or greater than the Average
Life of the Indebtedness redeemed, repurchased, defeased, acquired or
retired, and provided further, that such purchase, redemption, defeasance
or other acquisition or retirement shall not be included in the calculation
of Restricted Payments made for purposes of clause (3) of Subsection
3.03(a); and
(iv) any purchase, redemption, defeasance or other acquisition or
retirement for value of Subordinated Indebtedness upon a Change of Control
or an Asset Sale to the extent required by this Indenture or other
agreement pursuant to which such Subordinated Indebtedness was issued, but
only if (A) in the case of a Change of Control, the Company has made an
offer to repurchase the Notes as described under Section 3.08 or (B) in the
case of an Asset Sale, the Company or the applicable Project Company, as
the case may be, has applied the Net Available Cash from such Asset Sale in
accordance with the provisions of Section 3.12; and
(v) Restricted Payments not otherwise permitted by the foregoing
provisions in an aggregate amount not in excess of $10 million.
SECTION 3.04. LIMITATION ON INCURRENCE OF INDEBTEDNESS.
(a) The Company shall not, and shall not permit any Project Company to,
directly or indirectly, Incur any Indebtedness, except that the Company may
Incur Indebtedness if, after giving effect thereto, the Fixed Charge Coverage
Ratio would be greater than (i) 1.75:1.0 through November 30, 1998, (ii)
2.00:1.0 from December 1, 1998 through November 30, 2001, and (iii) 2.25:1.0
thereafter.
(b) Notwithstanding the foregoing, this section shall not limit the
ability of the Company or any Project Company to Incur the following
Indebtedness:
(i) Indebtedness under the Notes and this Indenture;
(ii) Refinancing Indebtedness;
(iii) Indebtedness of the Company which is owned to and held by a
Wholly Owned Subsidiary and Indebtedness of a Project Company which is owed
to and held by the Company or a Wholly Owned Subsidiary, provided, however,
that any subsequent issuance or transfer of any Capital Stock which results
in any such Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary
or any transfer of such Indebtedness (other than to the Company or a Wholly
Owned Subsidiary) shall be deemed, in each case, to constitute the
Incurrence of such Indebtedness by the Company or by a Project Company, as
the case may be;
(iv) Acquired Indebtedness that is Non-Recourse Debt;
(v) Indebtedness of the Company or a Project Company outstanding on
the Issue Date;
(vi) Indebtedness under any Currency Agreement or Interest Rate
Agreement in each case entered into in the ordinary course of the financial
management of the Company and the Project Companies and not for speculative
purposes; provided that, in the case of any Currency Agreement, such
Currency Agreement does not increase the Indebtedness of the obligor
outstanding at any time other than as a result of fluctuations in foreign
currency exchange rates or by reason of fees, indemnities and compensation
payable thereunder;
(vii) Indebtedness incurred in connection with a purchase of the
Notes as required in connection with a Change of Control Triggering Event;
provided that the aggregate principal amount of such indebtedness does not
exceed 101% of the aggregate principal amount of the Notes purchased
pursuant to such Change of Control Triggering Event (plus the amount of
reasonable fees and expenses, including underwriting discounts and
commissions, incurred by the Company in connection with obtaining such
Indebtedness) and that such Indebtedness does not mature prior to the
Stated Maturity of the Notes so purchased;
(viii) Indebtedness referred to in clause (viii) of the
definition of Permitted Investments;
(ix) Non-Recourse Debt of a Project Company (other than any
Existing Subsidiary);
(x) Shareholder Loans to the extent that the aggregate principal
amount of Shareholder Loans of a Project Company is not greater than an
amount equal to the principal amount of Shareholder Loans of such Project
Company payable to the Company or a Wholly Owned Subsidiary divided by the
Company's percentage ownership of the Capital Stock of such Project
Company;
(xi) Non-Recourse Debt of any Existing Subsidiary Incurred to pay
for construction cost overruns; provided that the aggregate principal
amount of all such Non-Recourse Debt incurred under this clause (xi) shall
not exceed $15 million;
(xii) Non-Recourse Debt of any Existing Subsidiary Incurred to
provide for working capital; provided that the aggregate principal amount
outstanding at any time of all such Non-Recourse Debt under this clause
(xii) shall not exceed $10 million; and
(xiii) other Indebtedness Incurred by the Company or any Project
Company (other than an Existing Subsidiary) in an aggregate principal
amount outstanding at any time of not more than 5% of Consolidated Net
Worth.
(c) Notwithstanding Sections 3.04(a) and (b), the Company shall not
Incur any Indebtedness if the proceeds thereof are used, directly or indirectly,
to repay, prepay, redeem, defease, retire, refund or refinance any Subordinated
Indebtedness unless such repayment, prepayment, redemption, defeasance,
retirement, refunding or refinancing is not prohibited by Section 3.03 or unless
such Indebtedness shall be contractually subordinated to the Notes at least to
the same extent as such Subordinated Indebtedness.
SECTION 3.05. LIMITATION ON PAYMENT RESTRICTIONS AFFECTING PROJECT
COMPANIES.
The Company shall not, and shall not permit any Project Company to,
create or otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Project Company to (i) pay
dividends to or make any other distributions on its Capital Stock, or pay any
Indebtedness or other obligations owed to the Company or any other Project
Company, (ii) make any loans or advances to the Company or any Project Company
or (iii) transfer any of its property or assets to the Company or any other
Project Company; PROVIDED, HOWEVER, that the foregoing shall not apply to:
(a) any encumbrance or restriction existing pursuant to this Indenture
or any other agreement or instrument as in effect or entered into on the Issue
Date;
(b) any encumbrance or restriction with respect to any Person or the
assets of such Person acquired by the Company or any Project Company and
existing at the time of such acquisition; PROVIDED, HOWEVER, that such
encumbrance or restriction was not Incurred in connection with or in
contemplation of such Project Company becoming a Project Company;
(c) any encumbrance or restriction pursuant to an agreement effecting a
refinancing of Indebtedness referred to in clause (a) or (b) above or contained
in any amendment or modification with respect to such Indebtedness; provided,
however, that the encumbrances and restrictions contained in any such agreement,
amendment or modification are no less favorable in any material respect with
respect to the matters referred to in clauses (i), (ii) and (iii) above than the
encumbrances and restrictions with respect to the Indebtedness being refinanced,
amended or modified;
(d) in the case of clause (iii) above, customary non-assignment
provisions of (A) any leases governing a leasehold interest or (B) any supply,
license or other agreement entered into in the ordinary course of business of
the Company or any Project Company;
(e) any restrictions with respect to a Project Company imposed pursuant
to an agreement entered into for the sale or disposition of all or substantially
all of the Capital Stock or assets of such Project Company pending the closing
of such sale or disposition;
(f) any encumbrances or restrictions imposed pursuant to the terms of
Non-Recourse Debt incurred pursuant to Section 3.04(b)(x), provided that such
encumbrances or restrictions, in the written opinion of the President or Chief
Financial Officer of the Company, (x) are required in order to obtain such
financing, (y) are not materially more restrictive, taken as a whole, than
encumbrances and restrictions customarily accepted (or, in the absence of any
industry custom, reasonably acceptable), in substantially non-recourse project
financings and (z) apply only to the assets of the Project Company that has
Incurred such Non-Recourse Debt, the Capital Stock of such Person (or any other
Person that, directly or indirectly, owns such Capital Stock as its sole assets)
and the income and proceeds therefrom;
(g) any encumbrance or restriction existing by reason of applicable
law; and
(h) any restriction under a joint venture, shareholders' or similar
agreement to pay dividends or make other distributions, so long as there is a
contemporaneous agreement providing for the payment of dividends or the making
of distributions according to a schedule or calculation notwithstanding such
restriction.
Nothing contained in this Section 3.05 shall prevent the Company or any
Project Company from (1) creating, incurring, assuming or suffering to exist any
Liens otherwise permitted in Section 3.07 or (2) restricting the sale or other
disposition of property or assets of the Company or any Project Company that
secure Indebtedness.
SECTION 3.06. PAYMENT OF ADDITIONAL AMOUNTS.
All payments of principal and interest in respect of each Note shall be
made free and clear of, and without withholding or deduction for, any taxes,
duties, assessments or governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by or within Bermuda or any other jurisdiction
in which the Company is organized or any authority therein or thereof having
power to tax or from which any payment is made with respect to the Notes, unless
such withholding or deduction is required by law or by regulation or
governmental policy having the force of law. In the event that any such
withholding or deduction in respect of principal or interest is so required, the
Company shall pay such additional amounts ("Additional Amounts") as will result
in receipt by each Holder of any Note of such amounts as would have been
received by such Holder or the beneficial owner with respect to such Note had no
such withholding or deduction been required, except that no Additional Amounts
shall be payable:
(a) for or on account of:
(i) any tax, duty, assessment or other governmental charge
that would not have been imposed but for
(A) the existence of any present or former connection
between such Holder or the beneficial owner of such Note and
Bermuda or such other jurisdiction in which the Company is
organized, as the case may be, other than merely holding
such Note, including, without limitation, such Holder or the
beneficial owner of such Note being or having been a
national, domiciliary or resident of or treated as a
resident thereof or being or having been present or engaged
in a trade or business therein or having or having had a
permanent establishment therein;
(B) presentation of such Note (where presentation is
required) more than thirty (30) days after the date on which
the payment in respect of such Note became due and payable
or provided for, whichever is later, except to the extent
that such Holder would have been entitled to such Additional
Amounts if it had presented such Note for payment on any day
within such period of thirty (30) days; or
(C) the presentation of such Note for payment in
Bermuda or any political subdivision thereof or therein,
unless such Note could not have been presented for payment
elsewhere;
(ii) any estate, inheritance, gift, sale, transfer, personal
property or similar tax, assessment or other governmental charge;
(iii) any tax, assessment or other governmental charge that
is imposed or withheld by reason of the failure of such Holder or the
beneficial owner of such Note to comply with a request by the Company
addressed to such Holder (A) to provide information concerning the
nationality, residence or identity of such Holder or such beneficial owner
or (B) to make any declaration or other similar claim or satisfy any
information or reporting requirement, which, in the case of (A) or (B), is
required or imposed by a statute, treaty, regulation or administrative
practice of the taxing jurisdiction as a precondition to exemption from all
or part of such tax, assessment or other governmental charge;
(iv) any tax, duty, assessment or governmental charge which
is payable other than by withholding or deduction from payments with
respect to the Notes; or
(v) any combination of items (1), (2), (3) and (4);
(b) with respect to any payment of the principal of or interest on such
Note to such Holder (including a fiduciary or partnership) to the extent that
the beneficial owner of such Note would not have been entitled to such
Additional Amounts had it been the Holder of the Note.
Whenever there is mentioned, in any context, the payment of principal
or interest in respect of any Note or the net proceeds received on the sale or
exchange of any Note, such mention shall be deemed to include the payment of
Additional Amounts provided for in this Indenture to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof
pursuant to this Indenture.
SECTION 3.07. LIMITATION ON LIENS.
The Company shall not, and shall not permit any Project Company to
directly or indirectly, incur or permit to exist any Lien of any nature
whatsoever on any of its properties (including, without limitation, Capital
Stock), whether owned at the date of such Indenture or thereafter acquired,
unless contemporaneously therewith or prior thereto the Notes are equally and
ratably secured other than:
(a) pledges or deposits made by such Person under workers'
compensation, unemployment insurance laws or similar legislation, or good faith
deposits in connection with bids, tenders, contracts (other than for payment of
Indebtedness) or leases to which such Person is a party, or deposits to secure
statutory or regulatory obligations of such Person or deposits of cash or United
States government bonds to secure surety, appeal or performance bonds to which
such Person is a party, or deposits as security for contested taxes or import
duties or for the payment of rent, in each case Incurred in the ordinary course
of business;
(b) Liens imposed by law such as carriers', warehousemen's and
mechanics' Liens, in each case, arising in the ordinary course of business and
with respect to amounts not yet due or being contested in good faith by
appropriate legal proceedings promptly instituted and diligently conducted and
for which a reserve or other appropriate provision, if any, as shall be required
in conformity with GAAP shall have been made; or other Liens arising out of
judgments or awards against such Person with respect to which such Person shall
then be diligently prosecuting appeal or other proceedings for review;
(c) Liens for property taxes not yet subject to penalties for
non-payment or which are being contested in good faith and for which appropriate
provision as shall be required in conformity with GAAP, if any, shall have been
made;
(d) Liens in favor of issuers or surety bonds or letters of credit
issued pursuant to the request of and for the account of such Person in the
ordinary course of its business; PROVIDED, HOWEVER, that such letters of credit
may not constitute Indebtedness;
(e) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, rights of way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or zoning or other
restrictions as to the use of real properties or liens incidental to the conduct
of the business of such Person or to the ownership of its properties which were
not Incurred in connection with Indebtedness or other extensions of credit and
which do not in the aggregate materially adversely affect the value of said
properties or materially impair their use in the operation of the business of
such Person;
(f) Liens securing Indebtedness Incurred to finance the construction or
purchase of, or repairs, improvements or additions to, property; provided,
however, that the Lien may not extend to any other property owned by the Company
or a Project Company and the Indebtedness secured by the Lien may not be issued
more than 270 days after the later of the acquisitions, completion of
construction, repair, improvement, addition or commencement of full operation of
the property subject to the Lien;
(g) Liens existing on the Issue Date;
(h) Liens on property or shares of stock of a Person at the time such
Person becomes a Project Company, PROVIDED, HOWEVER, that any such Lien may not
extend to any other property owned by the Company or any Project Company;
(i) Liens on property at the time the Company or a Project Company
acquires the property, including any acquisitions by means of a merger or
consolidation with or into the Company or a Project Company; PROVIDED, HOWEVER,
that such Liens are not incurred in connection with, or in contemplation of,
such merger or consolidation; and PROVIDED, FURTHER, that the Lien may not
extend to any other property owned by the Company or any Project Company;
(j) Liens securing Indebtedness or other obligations of a Project
Company owing to the Company or a Wholly Owned Subsidiary;
(k) Liens incurred by a Person other than the Company or a Project
Company on assets that are the subject of a Capitalized Lease Obligation to
which the Company or a Project Company is a party; PROVIDED, HOWEVER, that any
such Lien may not secure Indebtedness of the Company or Project Company (except
by virtue of clause (viii) of the definition of "Indebtedness") and may not
extend to any other property owned by the Company or any Project Company;
(l) Liens Incurred by a Project Company to secure Non-Recourse Debt
Incurred pursuant to paragraphs (ix), (xi) or (xii) of Section 3.04(b), provided
that such Liens (x) are required in order to obtain such financing, (y) are not
materially more restrictive, taken as a whole, than Liens customarily accepted
(or, in the absence of any industry custom, reasonably acceptable), in
substantially non-recourse project financings and (z) apply only to the assets
of the Person that has incurred such Non-Recourse Debt, the Capital Stock of
such Person (or any other Person that, directly or indirectly, owns such Capital
Stock as its sole assets) and the income and proceeds therefrom;
(m) Liens not in respect of Indebtedness consisting of the interest of
the lessor under any lease Incurred in the ordinary course of business and not
otherwise prohibited by this Indenture;
(n) Liens which constitute banker's liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained with any
bank or other financial institution, whether arising by operation of law or
pursuant to contract;
(o) Liens Incurred pursuant to the Security Agreement; and
(p) Liens to secure any refinancing, refunding, extension, renewal or
replacement (or successive refinancings, refundings, extensions, renewals or
replacements) as a whole, or in part, of any Indebtedness secured by any Lien
referred to in the foregoing clauses (f), (g), (h) and (i), PROVIDED, HOWEVER,
that (x) such new Lien shall be limited to all or part of the same property that
secured the original Lien (plus improvements on such property) and (y) the
Indebtedness secured by such Lien at such time is not increased (other than by
an amount necessary to pay fees and expenses, including premiums, related to the
refinancing, refunding, extension, renewal or replacement of such Indebtedness).
SECTION 3.08. CHANGE OF CONTROL.
In the event of a Change of Control Triggering Event, the Company shall
make an offer to purchase (the "CHANGE OF CONTROL OFFER") the Notes then
outstanding at a purchase price of not less than 101% of the principal amount
(excluding any premium) thereof plus accrued and unpaid interest to the Change
of Control Purchase Date (as defined below) on the terms set forth in this
section. The date on which the Company shall purchase the Notes pursuant to this
section (the "CHANGE OF CONTROL PURCHASE DATE") shall be no earlier than 30
days, nor later than 60 days, after the notice referred to below is mailed,
unless a longer period shall be required by law. The Company shall notify the
Trustee in writing promptly after any Change of Control Triggering Event of the
Company's obligation to offer to purchase all of the Notes.
Notice of a Change of Control Offer shall be mailed by the Company to
the Holders of the Notes at their last registered address (with a copy to the
Trustee and the Paying Agent) within thirty (30) days after a Change of Control
Triggering Event has occurred. The Change of Control Offer shall remain open
from the time of mailing until a date not more than five (5) Business Days
before the Change of Control Purchase Date. The notice shall contain all
instructions and materials necessary to enable such Holders to tender (in whole
or in part) the Notes pursuant to the Change of Control Offer. The notice, which
shall govern the terms of the Change of Control Offer, shall state:
(a) that the Change of Control Offer is being made pursuant to this
section;
(b) the purchase price and the Change of Control Purchase Date;
(c) that any Note not surrendered or accepted for payment will continue
to accrue interest;
(d) that any Note accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of Control
Purchase Date;
(e) that any Holder electing to have a Note purchased (in whole or in
part) pursuant to a Change of Control Offer will be required to surrender the
Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Note completed, to the Paying Agent at the address specified in the
notice (or otherwise make effective delivery of the Note pursuant to book-entry
procedures and the related rules of the applicable depositories) at least five
(5) Business Days before the Change of Control Purchase Date; and
(f) that any Holder will be entitled to withdraw his or her election if
the Paying Agent receives, not later than three (3) Business Days prior to the
Change of Control Purchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the Note
the Holder delivered for purchase and a statement that such Holder is
withdrawing his or her election to have the Note purchased.
On the Change of Control Purchase Date, the Company shall (i) accept
for payment the Notes, or portions thereof, surrendered and properly tendered,
and not withdrawn, pursuant to the Change of Control Offer, (ii) deposit with
the Paying Agent, no later than 11:00 a.m. eastern standard time, money, in
immediately available funds, sufficient to pay the purchase price of all Notes
or portions thereof so accepted and (iii) deliver to the Trustee, no later than
11:00 a.m. eastern standard time, Notes so accepted together with an Officers'
Certificate stating that such Notes have been accepted for payment by the
Company. The Paying Agent shall promptly mail or deliver to Holders of Notes so
accepted payment in an amount equal to the purchase price. Holders whose Notes
are purchased only in part will be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered.
The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this section by virtue thereof.
SECTION 3.09. COMPLIANCE CERTIFICATE.
(a) The Company shall, within 120 days after the close of each fiscal
year following the issuance of the Notes, file with the Trustee an Officer's
Certificate, covering the period from the date of issuance of the Notes to the
end of the fiscal year in which the Notes were issued, in the case of the first
such certificate, and covering the preceding fiscal year in the case of each
subsequent certificate, and stating whether or not, to the knowledge of each
such executing Officer, the Company has complied with and performed and
fulfilled all covenants on its part contained in this Indenture and is not in
default in the performance or observance of any of the terms or provisions
contained in this Indenture, and, if any such signer has obtained knowledge of
any default by the Company in the performance, observance or fulfillment of any
such covenant, term or provision specifying each such default and the nature
thereof. For the purpose of this Section 3.09, compliance shall be determined
without regard to any grace period or requirement of notice provided pursuant to
the terms of this Indenture.
(b) The Officers' Certificate described in Section 3.09(a) shall also
set forth (i) a calculation of the Fixed Charge Coverage Ratio as of the date of
such certificate and (ii) a calculation of the amount required to be maintained
by the Company pursuant to Section 3.13, as of the end of the most recent fiscal
quarter for which financial information is available, setting forth, in each
such case, each component of the calculation thereof.
SECTION 3.10. COMMISSION REPORTS.
The Company shall deliver to the Trustee and to the Holders, within 30
days after the filing with the Commission, copies of the annual and quarterly
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may by rules and regulations
prescribe) which the Company is required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act. In the event the Company is at any time
no longer subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act or otherwise report on an annual and quarterly basis on forms
provided for such annual and quarterly reporting pursuant to rules and
regulations promulgated by the Commission, it shall, for so long as the Notes
remain outstanding, file with the Trustee and the Commission and mail to each
Holder at such Holder's registered address, within 30 days after the Company
would have been required to file such documents with the Commission, copies of
the annual audited financial statements and quarterly unaudited financial
statements, along in each case with a discussion and analysis thereof, all in
the form the Company would have been required to file with the Commission if the
Company had continued to be subject to such Section 13 or 15(d). The Company
shall not be obligated to file any such reports with the Commission if the
Commission does not permit such filings. The Company shall also be required to
deliver, together with each annual and quarterly financial statements delivered
pursuant to this paragraph, a calculation of the Fixed Charge Coverage Ratio as
of the date such financial statements are filed or otherwise released. The
Company also shall comply with the other provisions of TIA ss.314(a).
SECTION 3.11. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any Project Company to,
directly or indirectly, enter into, permit to exist, renew or extend any
transaction or series of related transactions (including, without limitation,
the sale, purchase, exchange or lease of any assets or property or the rendering
of any services) with any Affiliate of the Company (other than a Project
Company) unless (i) the terms of such transaction or series of related
transactions are (A) no less favorable to the Company or such Project Company,
as the case may be, than would be obtainable in a comparable transaction or
series of related transactions in arm's-length dealings with an unrelated third
party and (B) set forth in writing, if such transaction or series of related
transactions involve aggregate payments or consideration in excess of
$1,000,000, and (ii) with respect to a transaction or series of related
transactions involving the sale, purchase, lease or exchange of property or
assets having a value in excess of $5,000,000, such transaction or series of
transactions has been approved by a majority of the disinterested members of the
Board of Directors or, if there are no disinterested members of the Board of
Directors, the Board of Directors shall have received a written opinion of a
internationally recognized investment banking firm stating that such transaction
or series of transactions is fair to the Company or such Project Company from a
financial point of view.
The foregoing provisions do not prohibit:
(i) the payment of reasonable fees to directors of the Company
and the Project Companies who are not employees of the Company or a
Project Company;
(ii) any transaction between the Company and a Wholly Owned
Subsidiary or between Wholly Owned Subsidiaries not otherwise
prohibited by the terms of this Indenture;
(iii) the payment of any Restricted Payment which is expressly
permitted to be paid pursuant to Section 3.03(b);
(iv) any issuance of securities or other reasonable payments,
awards or grants, in cash or otherwise, pursuant to, or the funding of,
employment arrangements approved by the Board of Directors;
(v) the grant of stock options or similar rights to employees
and directors of the Company pursuant to plans approved by the Board of
Directors;
(vi) loans or advances to employees in the ordinary course of
business;
(vii) any repurchase, redemption or other retirement of Equity
Interests of the Company held by employees of the Company or any of the
Project Companies upon death, disability or termination of employment
at a price not in excess of the fair market value thereof approved by
the Board of Directors or other governing body of such Project Company;
(viii) the extension, renewal, entry into or payment pursuant
to any services agreement with AES that provides for the payment by the
Company to AES of fees on terms that are not more advantageous to AES
than as provided under the Services Agreement as in effect on the Issue
Date; and
(ix) any agreement to do any of the foregoing.
Any transaction which has been determined, in the written opinion of an
independent internationally recognized investment banking firm, to be fair, from
a financial point of view, to the Company or the applicable Project Company,
shall be deemed to be in compliance with this section.
SECTION 3.12. LIMITATION ON SALES OF ASSETS AND REFINANCINGS.
(a) The Company shall not, and shall not permit any Project Company to,
consummate any Asset Sale other than to the Company or a Wholly Owned Subsidiary
unless (i) the Company or such Project Company, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value, as determined in good faith by the Board of Directors, as evidenced by a
Board Resolution, of the shares or assets disposed of pursuant to such Asset
Sale, (ii) at least 75% of the consideration thereof received by the Company or
such Project Company is in the form of cash or cash equivalents which are
promptly converted into cash by the Person receiving such payment and (iii) an
amount equal to 100% of the Net Available Cash is applied by the Company (or
such Project Company, as the case may be) as set forth herein.
(b) To the extent that the fair market value (as determined in good
faith by the Board of Directors, as evidence by a Board Resolution) of any
asset, property or Capital Stock disposed of in any Asset Sale (other than an
Asset Sale of the assets, property or Capital Stock of any Existing Subsidiary
or Existing Joint Venture), together with the fair market value of all other
assets, property, or Capital Stock sold, transferred or otherwise disposed of in
such Asset Sales received during the twelve month period preceding the date of
such Asset Sale, exceeds 5% of Consolidated Net Tangible Assets, then within
three hundred sixty-five (365) days (such period being the "APPLICATION PERIOD")
following the consummation of an Asset Sale, the Company or such Project Company
shall apply the Net Available Cash from such Asset Sale as follows: (i) to the
extent the Company or such Project Company elects, to reinvest in Additional
Assets (including by means of an investment in Additional Assets by a Project
Company with Net Available Cash received by the Company or another Project
Company or by means of an exchange of assets that achieves a similar effect);
(ii) to the extent of the balance of such Net Available Cash after application
in accordance with clause (i) and to the extent the Company or such Project
Company elects (or is required by the terms of any Indebtedness or any
Indebtedness of such Project Company), to prepay, repay or purchase Indebtedness
of the Company (other than Notes or Subordinated Indebtedness) or Indebtedness
of any Project Company (other than Non-Recourse Debt, Indebtedness owed to the
Company or an Affiliate of the Company or Preferred Stock); PROVIDED, that in
connection with any prepayment, repayment or purchase of Indebtedness pursuant
to clause (ii) above, the Company or such Project Company shall retire such
Indebtedness and cause the related loan commitment (if any) to be permanently
reduced in an amount equal to the principal amount so prepaid, repaid or
purchased; or (iii) to the extent of the balance of the Net Available Cash after
application in accordance with the preceding clauses (i) and (ii) (the "EXCESS
PROCEEDS"), the Company shall, within 30 days after the end of the Application
Period, except as provided below, make an offer to purchase the Notes (an
"EXCESS PROCEEDS OFFER") at a purchase price of not less than 100% of the
principal amount (excluding any premium) plus accrued and unpaid interest
pursuant to and subject to the conditions set forth in this Indenture. To the
extent that any Net Available Cash from any Asset Sale remains after an Excess
Proceeds Offer, the Company or such Project Company may utilize such remaining
Net Available Cash in any manner not otherwise prohibited by this Indenture.
In the event of the transfer of substantially all (but not all) of the
property and assets of the Company as an entirety to a Person in a transaction
permitted under Article 4, the Successor Corporation shall be deemed to have
sold the properties and assets of the Company not so transferred for purposes of
this Section 3.12; and shall comply with the provisions of this Section 3.12
with respect to such deemed sale as if it were an Asset Sale.
(c) The Company shall not be required to make an Excess Proceeds Offer
if the amount of Excess Proceeds is less than $5,000,000 for any particular
Asset Sale (which lesser amounts shall not be carried forward for purposes of
determining whether an Excess Proceeds Offer is required with respect to the Net
Available Cash from any subsequent Asset Sale).
(d) (1) The Company shall, within 30 days after the occurrence of any
Special Proceeds Event, cause all Special Proceeds with respect to such Special
Proceeds Event to be deposited into the Special Proceeds Account held by the
Collateral Agent and the Company shall, to the extent of the amounts on deposit
in the Special Proceeds Account, except as provided below, make an offer to
purchase the Notes (a "SPECIAL PROCEEDS OFFER," and together with an Excess
Proceeds Offer, an "OFFER"), at a purchase price of not less than 101% of the
principal amount (excluding any premium) plus accrued and unpaid interest
pursuant to and subject to the conditions set forth in this Indenture. To the
extent that any Special Proceeds remain after a Special Proceeds Offer, the
Collateral Agent shall retain such amounts on deposit in the Special Proceeds
Account in the form of cash or Dollar Permitted Investments. Under this
Indenture, the Company shall not be required to make a Special Proceeds Offer
unless the amount held by the Collateral Agent in the Special Proceeds Account
is greater than $5,000,000.
(2) The Company will make an Offer by mailing by first class mail to
each Holder, with a copy to the Trustee, within 30 days after the end of the
relevant Application Period or Special Proceeds Event, a written notice stating
that the Holder may elect to have his Notes purchased by the Company either in
whole or in part (subject to proration as hereinafter described in the event the
Offer is oversubscribed) in integral multiples of $1,000 of principal amount, at
the applicable purchase price. The notice shall specify a purchase date not less
than 30 days, nor more than 60 days, after the date of such notice (the
"PURCHASE DATE") and shall contain the information required in a notice for a
Change of Control Offer, to the extent applicable.
(3) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided above, the Company shall deliver to the
Trustee an Officers' Certificate as to (i) the amount of the Offer (the "OFFER
AMOUNT") and (ii) (A) in the case of an Excess Proceeds Offer, the allocation
pursuant to which such Offer is being made and the compliance of such allocation
with the provisions of Section 3.12(a) or (B) in the case of a Special Proceeds
Offer, the calculation of Special Proceeds arising from such Special Proceeds
Event. On such date, the Company shall also deposit with the Collateral Agent,
in the case of a Special Proceeds offer or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust), in the
case of an Excess Proceeds Offer funds in an amount equal to the Offer Amount to
be held for payment in accordance with the provisions of this section and the
Security Agreement. Upon the expiration of the period for which the Offer
remains open (the "OFFER PERIOD"), the Company shall deliver, or cause to be
delivered, to the Trustee the Notes or portions thereof which have been properly
tendered to and are to be accepted by the Company. The Collateral Agent or the
Paying Agent, as the case may be, shall promptly, and in any event within one
(1) Business Day following the Purchase Date, mail or deliver payment to each
tendering Holder in the amount of the purchase price. In the event that the
aggregate purchase price of the Notes delivered, or caused to be delivered, by
the Company to the Trustee is less than the Offer Amount, the Collateral Agent
or the Paying Agent, as the case may be, shall deliver the excess to the Company
immediately after the expiration of the Offer Period and the delivery to the
Trustee of the Notes or portions thereof that have been properly tendered to and
are to be accepted for payment by the Company.
(4) Holders electing to have a Note purchased will be required to
surrender the Note, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Note duly completed, to the Company or the Paying Agent,
as specified in, and at the address specified in, the notice at least ten (10)
Business Days prior to the Purchase Date. Holders will be entitled to withdraw
their election if the Trustee or the Paying Agent receives, not later than three
Business Days prior to the Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note which was delivered for purchase by the Holder and a
statement that such Holder is withdrawing his election to have such Note
purchased. If at the expiration of the Offer Period the aggregate principal
amount of Notes surrendered by Holders exceeds the Offer Amount, the Company
shall elect the Notes to be purchased on a pro rata basis (with such adjustments
as may be deemed appropriate by the Company so that only Notes in denominations
of $1,000, or integral multiples thereof, shall be purchased) and shall notify
the Trustee of its selection in a writing signed by two Authorized Officers.
Holders whose Notes are purchased only in part will be issued new Notes equal in
principal amount to the unpurchased portion of the Notes surrendered.
(e) At the time the Company delivers Notes to the Trustee which are to
be accepted for purchase, the Company will also deliver an Officers' Certificate
stating that such Notes are to be accepted by the Company pursuant to and in
accordance with the terms of this section. A Note shall be deemed to have been
accepted for purchase at the time the Collateral Agent or the Paying Agent, as
the case may be, directly or through an agent, mails or delivers payment
therefor to the surrendering Holder.
(f) The Company shall comply to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and other securities laws or
regulations in connection with the repurchase of Notes pursuant to this section.
To the extent that the provisions of any securities laws or regulations conflict
with provisions of this section, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this section by virtue thereof. If the Company is prohibited
by applicable law from making the Offer or purchasing Notes thereunder, the
Company need not make an Offer pursuant to this section for so long as such
prohibition is in effect.
SECTION 3.13. MAINTENANCE OF CERTAIN CASH PROCEEDS.
At any time (x) prior to the later to occur of (i) the commencement of
commercial operation of each of the Existing Joint Ventures and Existing
Subsidiaries and (ii) January 1, 2000 or (y) at which the Fixed Charge Coverage
Ratio is less than 2.0:1.0, the Company shall maintain (on an unconsolidated
basis) cash and Permitted Investments of the type referred to in clauses (vi)
and (vii) of the definition thereof (exclusive of any amounts held in the Debt
Service Reserve Account or the Special Proceeds Account) in an amount equal to
or greater than the Existing Project Company Net Cash Flow for the period from
the Restricted Date to the date of determination. For purposes hereof, the
"Restricted Date" means December 1, 1996 or, if the Fixed Charge Coverage Ratio
shall at any time have been equal to or greater than 2.0:1.0, then the most
recent date on which the Fixed Charge Coverage Ratio shall have decreased to
below 2.0:1.0.
SECTION 3.14. PAYMENT OF STAMP DUTY AND OTHER TAXES.
The Company will pay any present or future stamp, court or documentary
taxes, or any other excise or property taxes, charges or similar levies which
arise under the laws of Bermuda from the execution, delivery or registration of
the Notes or any other document or instrument referred to herein.
SECTION 3.15 PAYMENT OF TAXES AND OTHER CLAIMS.
The Company shall pay or discharge, or cause to be paid or discharged,
before any material penalty accrues thereon all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Restricted
Subsidiary or upon the income, profits or property of the Company or any
Restricted Subsidiary; PROVIDED, HOWEVER, that the Company shall not be required
to pay or discharge, or cause to be paid or discharged, any such tax,
assessment, charge or claim the amount, applicability or validity of which is
being contested in good faith by appropriate proceedings and for which adequate
reserves, if the same shall be required in accordance with GAAP, have been made.
SECTION 3.16. NOTICE OF DEFAULTS AND OTHER EVENTS.
In the event that any Indebtedness of the Company or any Project
Company having an outstanding principal amount in excess of $5,000,000 (or its
foreign currency equivalent) individually or in the aggregate has been or could
be declared due and payable before its maturity because of the occurrence of any
event of default under such Indebtedness (including any Default under this
Indenture), the Company, promptly after it becomes aware thereof, will give
written notice thereof to the Trustee.
SECTION 3.17. MAINTENANCE OF INSURANCE.
The Company shall cause each Project Company to maintain insurance
policies covering such risks, in such amounts and with such terms as are
normally carried by similarly situated foreign invested companies engaged in the
Line of Business in the country in which such Project Company is located.
SECTION 3.18. LIMITATION ON ISSUANCE OF SUBSIDIARY CAPITAL STOCK.
The Company shall not permit any Restricted Subsidiary, directly or
indirectly, to issue or sell any shares of such Restricted Subsidiary's Capital
Stock (including options, warrants or other rights to purchase shares of Capital
Stock) except, to the extent not otherwise prohibited by this Indenture, (i) to
the Company or another Restricted Subsidiary that is a Wholly Owned Subsidiary
of the Company, or (ii) if the Net Cash Proceeds from such issuance or sale are
applied, to the extent required to be applied, pursuant to Section 3.12.
SECTION 3.19. LIMITATION ON CHANGES IN THE NATURE OF THE BUSINESS.
The Company and the Project Companies shall engage only in the Line of
Business as well as any other activities reasonably related to the Line of
Business.
SECTION 3.20. LIMITATION ON CERTAIN SUBSIDIARY INVESTMENTS.
The Company will not permit any Project Company with an interest in a
Facility to make any Investment in or merge with any other Person with an
interest in another Facility or in an Unrelated Business.
Notwithstanding the foregoing, subject to any applicable restrictions
imposed by Section 3.03 the Company may permit one or more of its Subsidiaries
(each, an "Intermediate Holding Company") to serve as a holding company for the
Company's direct and indirect interests in Facilities and Unrelated Businesses;
provided that: (i) each such Intermediate Holding Company's direct and indirect
interest in any Facility or Unrelated Business shall be limited to the ownership
of Capital Stock or Indebtedness of a Person with a direct or indirect interest
in such Facility or Unrelated Business; (ii) no consensual encumbrance or
restriction of any kind shall exist on the ability of any Intermediate Holding
Company to make the payments, distributions, loans, advances or transfers
referred to in clauses (i) through (iii) of the first paragraph of Section 3.05;
(iii) no Intermediate Holding Company shall incur, assume, create or suffer to
exist any Indebtedness other than Indebtedness to the Company; and (iv) no Lien
shall exist upon any assets of such Intermediate Holding Company whether now or
hereafter acquired, except for Liens upon the Capital Stock of a Subsidiary of
an Intermediate Holding Company securing Indebtedness of such Subsidiary.
SECTION 3.21. GOVERNMENT APPROVALS.
The Company shall, and shall cause each Project Company to, at all
times (i) obtain and maintain in full force and effect all government
authorizations, approvals and consents relating to any Project Company or
Facility and (ii) preserve and maintain good and valid title to its properties
and assets (subject to Section 3.07 hereof), except in any such case where any
failure to comply with clause (i) or (ii) would not reasonably be expected to
have a material adverse effect on the business or results of operations of the
Company and its Restricted Subsidiaries, taken as a whole, or the ability of the
Company to perform its obligations under this Indenture or the Notes.
SECTION 3.22. COMPLIANCE WITH LAWS.
The Company shall, and shall cause each Project Company to, comply with
all applicable laws, rules, regulations and orders of, and all applicable
restrictions imposed by, any governmental authority or regulatory body in
respect of the conduct of its business and the ownership of its properties,
except to the extent that any failure to comply therewith would not reasonably
be expected to have a material adverse effect on the business or results of
operations of the Company and its Restricted Subsidiaries, taken as a whole, or
the ability of the Company to perform its obligations under this Indenture or
the Notes.
SECTION 3.23 OPERATIONS AND MAINTENANCE.
The Company shall, and shall cause each Project Company to, in all
material respects operate and maintain each Facility in accordance with prudent
industry operating and maintenance practices generally accepted in the Line of
Business.
ARTICLE 4
CONSOLIDATION AND MERGER
SECTION 4.01. MERGER AND CONSOLIDATION .
The Company shall not, in a single transaction or through a series of
related transactions, consolidate, merge or amalgamate with or into any other
corporation or sell, assign, convey, transfer or lease or otherwise dispose of
all or substantially all of its properties and assets as an entirety to any
Person or group of affiliated Persons, unless:
(i) either (A) the Company shall be the continuing Person, or
(B) the Person (if other than the Company) formed by such consolidation
or into which the Company is merged or to which the properties and
assets of the Company as an entirety are transferred (the "Successor
Corporation") shall be a corporation organized and existing under the
laws of Bermuda, the United States (or any State thereof or the
District of Columbia) or any other member country of the Organization
for Economic Cooperation and Development and shall expressly assume, by
an indenture supplemental hereto, executed and delivered to the
Trustee, in form and substance reasonably satisfactory to the Trustee,
all the obligations of the Company under this Indenture and the Notes;
(ii) immediately before and immediately after giving effect to
such transaction on a pro forma basis (and treating any Indebtedness
which becomes an obligation of the Company (or the Successor
Corporation if the Company is not the continuing obligor under this
Indenture) or any Restricted Subsidiary as a result of such transaction
as having been Incurred by such Person at the time of such
transaction), no Default shall have occurred and be continuing;
(iii) the Company shall have delivered or caused to be
delivered, to the Trustee: (A) an Officers' Certificate stating that
such consolidation, merger or amalgamation or such transfer complies
with Article 4 hereof and that all conditions precedent under this
Indenture provided for or relating to such transaction have been
complied with; (B) an Opinion of Counsel of local counsel of recognized
standing as to the legal issues relating thereto; and (C) an Opinion of
Counsel of United States independent counsel of recognized standing to
the effect that the Holders of the Notes will not recognize income,
gain or loss for United States federal income tax purposes as a result
of such consolidation, merger or amalgamation or such transfer and will
be subject to United States federal income tax (if subject to United
States federal income tax at all either before or after such
consolidation, merger or amalgamation or such transfer) on the same
amount and in the same manner and at the same time as would have been
the case if such consolidation, merger or amalgamation or such transfer
had not occurred;
(iv) the Successor Corporation shall expressly agree to
indemnify each Holder of a Note against any tax, assessment or
governmental charge payable by withholding or deduction thereafter
imposed on such Holder or with respect to the payment of principal and
interest on the Notes solely as a consequence of such consolidation,
merger or amalgamation or such transfer;
(v) immediately after giving effect to such transaction on a
pro forma basis (and treating any Indebtedness which becomes an
obligation of the Company (or the Successor Corporation if the Company
is not the continuing obligor under this Indenture) or a Restricted
Subsidiary in connection with or as a result of such transaction as
having been Incurred by such Person at the time of such transaction),
the Company (or the Successor Corporation if the Company is not the
continuing obligor under this Indenture) shall have Consolidated Net
Worth in an amount which is not less than the Consolidated Net Worth of
the Company immediately prior to such transaction; and
(vi) immediately after giving effect to such transaction on a
pro forma basis the Company (or the Successor Corporation if the
Company is not the continuing obligor under this Indenture) would be
able to Incur at least $1.00 of additional Indebtedness pursuant to
Section 3.04(a).
SECTION 4.02. SUCCESSOR SUBSTITUTED.
(a) Upon any such consolidation, merger or amalgamation, or any
conveyance, transfer, or disposition of all or substantially all of the
properties or assets of the Company in accordance with Section 4.01, but not in
the case of a lease, the Successor Corporation shall succeed to and be
substituted for the Company under this Indenture and the Notes, and the Company
shall thereupon be released from all obligations hereunder and under the Notes
and the Company, as the predecessor corporation, may thereupon or at any time
thereafter be dissolved, wound up or liquidated. The Successor Corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of the Company, all or any of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of the Successor Corporation instead of the Company
and subject to all the terms, conditions and limitations prescribed in this
Indenture, the Trustee shall authenticate and shall deliver any Notes which the
Successor Corporation thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Notes so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Notes theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
such Notes had been issued at the date of the execution hereof.
(b) In the case of any consolidation, merger, amalgamation or transfer
described in Section 4.02(a) above, such changes in form (but not in substance)
may be made in the Notes thereafter to be issued as may be appropriate.
ARTICLE 5
DEFAULTS AND REMEDIES
SECTION 5.01. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" means any of the following events:
(a) default in the payment of interest on any Note when the same
becomes due and payable, and such default continues for a period of 30 days;
(b) default in the payment of the principal of any Note when the same
becomes due and payable at maturity or otherwise or a failure to redeem or
purchase Notes when required pursuant to this Indenture or the Notes;
(c) default in performance of any other covenants or agreements in this
Indenture, the Notes or the Security Agreement and the default continues for 30
days after the date on which written notice of such default is given to the
Company by the Trustee or to the Company and the Trustee by Holders of at least
25% in aggregate principal amount of the Notes then outstanding hereunder;
(d) there shall have occurred either (i) a default by the Company or
any Project Company under any instrument or instruments under which there is or
may be secured or evidenced any Indebtedness of the Company or any Project
Company (other than the Notes or any Non-Recourse Debt) having an outstanding
principal amount of $5,000,000 (or its foreign currency equivalent) or more
individually or in the aggregate that has caused the holders thereof to declare
such Indebtedness to be due and payable prior to its Stated Maturity or (ii) a
default by the Company or any Project Company in the payment when due or any
portion of the principal under any instrument or instruments under which there
is or may be secured or evidenced any Indebtedness of the Company or any Project
Company (other than the Notes or any Non-Recourse Debt), and such unpaid portion
exceeds $5,000,000 (or its foreign currency equivalent) individually or in the
aggregate and is not paid, or such default is not cured or waived, within any
grace period applicable thereto, unless such Indebtedness is discharged within
20 days of the Company or a Project Company becoming aware of such default;
PROVIDED, HOWEVER, that the foregoing shall not apply to any default on
Non-Recourse Indebtedness;
(e) any final judgment or order (not covered by insurance) for the
payment of money shall be rendered against the Company or any Project Company in
an amount in excess of $5,000,000 (or its foreign currency equivalent)
individually or in the aggregate for all such final judgments or orders against
all such Persons (treating any deductibles, self-insurance or retention as not
so covered) and shall not be discharged, and there shall be any period of 60
consecutive days following entry of the final judgment or order in excess of
$5,000,000 (or its foreign currency equivalent) individually or in the aggregate
during which a stay of enforcement of such final judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect;
(f) (i) other than in accordance with the provisions of this Indenture
or the Security Agreement, for any reason, other than the satisfaction in full
and discharge of the obligations secured thereby, the Collateral Agent shall
cease to have a first priority security interest in the Collateral or (ii) other
than in accordance with the provisions of this Indenture, the Company asserts in
writing that the Security Agreement has ceased to be or is not in full force and
effect;
(g) the Company or any Restricted Subsidiary pursuant to any Bankruptcy
Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in
an involuntary case,
(iii) consents to the appointment or taking possession by a
Bankruptcy Custodian of the Company or such Restricted Subsidiary or for any
substantial part of the property of any of them.
(iv) make a general assignment for the benefit of its creditors,
or
(v) admits in writing its inability to generally pay its debts as
such debts become due;
or takes any comparable action under any foreign laws relating to
insolvency; and
(h) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law, that:
(i) is for relief against the Company or any Restricted
Subsidiary in an involuntary case,
(ii) appoints a Bankruptcy Custodian of any of the Company or any
Restricted Subsidiary or for all or substantially all of its property, or
(iii) orders the winding up or liquidation of the Company or any
Restricted Subsidiary;
or any similar relief is granted under any similar laws of another
jurisdiction; and the order or decree remains unstayed and in effect for 60
days.
Any notice of Default given by the Trustee or Noteholders under this
section must specify the Default, demand that it be remedied and state that the
notice is a "Notice of Default."
The Company shall file annually with the Trustee a certificate
describing any Default by the Company in the performance of any conditions or
covenants that has occurred under this Indenture and its status. The Company
shall deliver to the Trustee, within 30 days after the occurrence thereof,
written notice of any event which with the giving of notice or the lapse of time
or both would become an Event of Default under clause (c), (d), (e) or (h)
hereof.
Subject to the provisions of Sections 6.01 and 6.02, the Trustee shall
not be charged with knowledge of any Event of Default unless written notice
thereof shall have been given to the Trustee by the Company, the Paying Agent,
any Holder or an agent of any Holder.
SECTION 5.02. ACCELERATION.
If an Event of Default (other than an Event of Default specified in
clauses (g) and (h) of Section 5.01 with respect to the Company or any
Restricted Subsidiary) occurs and is continuing, the Trustee by notice to the
Company, or the Holders of at least 25% in principal amount of the Notes then
outstanding by notice to the Company and the Trustee, may declare the principal
of and any accrued and unpaid interest on all the Notes to be due and payable.
Upon such declaration the principal and interest shall be due and payable
immediately. If an Event of Default specified in clause (g) or (h) of Section
5.01 with respect to the Company or any Restricted Subsidiary occurs, the
principal of and interest on all the Notes shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Noteholders. The Holders of a majority in principal amount of
the Notes then outstanding by notice to the Trustee may rescind any such
declaration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived, except nonpayment of principal or interest that has become due solely
because of such declaration. No such rescission shall affect any subsequent or
other Default or Event of Default or impair any consequent right.
SECTION 5.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal or interest on the
Notes or to enforce the performance of any provision of the Notes or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 5.04. WAIVER OF PAST DEFAULTS.
The Holders of a majority in principal amount of the Notes then
outstanding by notice to the Trustee may waive an existing Default and its
consequences except (a) a Default in the payment of the principal of or interest
on any Note or (b) a Default in respect of a provision that under Section 8.02
cannot be amended without the consent of each Noteholder affected. When a
Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any consequent right.
SECTION 5.05. CONTROL BY MAJORITY.
The Holders of a majority in principal amount of the Notes then
outstanding may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, or, subject to Section 6.01, that the
Trustee determines is unduly prejudicial to the rights of other Noteholders, or
would involve the Trustee in personal liability; PROVIDED, HOWEVER, that the
Trustee may take any other action deemed proper by the Trustee that is not
inconsistent with such direction. Prior to taking any action hereunder, the
Trustee shall be entitled, subject to the duty of the Trustee during a Default
to act with the required standard of care, to indemnification reasonably
satisfactory to it against all risk, losses and expenses caused by taking or not
taking such action. Subject to Section 6.01, the Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Indenture at the request or direction of the Noteholders pursuant to this
Indenture, unless such Noteholders shall have provided to the Trustee security
or indemnity reasonably satisfactory to it against the costs, expenses and
liabilities which might be incurred in compliance with such request or
direction.
SECTION 5.06. LIMITATION ON SUITS.
A Noteholder may pursue a remedy with respect to this Indenture or the
Notes only if:
(a) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(b) the Holders of at least 25% in principal amount of the Notes then
outstanding make a written request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer to the Trustee security reasonably
satisfactory to it or indemnity against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(e) the Holders of a majority in principal amount of the Notes then
outstanding do not give the Trustee a direction inconsistent with the request
during such 60-day period.
A Noteholder may not use this Indenture to prejudice the rights of
another Noteholder or to obtain a preference or priority over another
Noteholder.
SECTION 5.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal and interest on the Note, on or
after the respective due dates expressed in the Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Holder, except to the extent
that the institution or prosecution of any such suit or the entry of judgment
therein would result in the surrender, impairment, waiver or loss of the Lien on
the Collateral.
SECTION 5.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 5.01(a) or (b) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount of principal and
interest remaining unpaid (together with interest on such unpaid interest to the
extent lawful) and the amounts provided for in Section 6.07.
SECTION 5.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or documents
and take such other actions including participating as a member or otherwise in
any committees of creditors appointed in the matter as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the amounts provided in Section 6.07) and the Noteholders allowed in any
judicial proceedings relative to the Company, its creditors or its property and,
unless prohibited by law or applicable regulations, may vote on behalf of the
Holders in any election of a trustee in bankruptcy or other Person performing
similar functions, and any custodian in any such judicial proceeding is hereby
authorized by each Holder to make payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 6.07. To
the extent that the payment of any such amount due to the Trustee under Section
6.07 out of the estate in any such proceeding shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be paid out of, any
and all distributions, dividends, money, securities and other properties which
the Holders of the Notes may be entitled to receive in such proceeding whether
in liquidation or under any plan of reorganization or arrangement or otherwise.
SECTION 5.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 6.07;
Second: to Noteholders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal and
interest, respectively; and
Third: to the Company.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this section. At least 15 days before such record date,
the Company shall give written notice to each Noteholder and the Trustee of the
record date, the payment date and amount to be paid.
SECTION 5.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 5.07, or a suit by Holders of more than 10% in principal
amount of the Notes.
SECTION 5.12. WAIVER OF STAY OR EXTENSION LAWS.
The Company shall not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company
hereby expressly waives all benefit or advantage of any such law, and shall not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law has been enacted.
ARTICLE 6
TRUSTEE
SECTION 6.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, 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 own affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others and no implied
covenants or obligations shall be read into this Indenture against the
Trustee.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirement of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) This paragraph does not limit the effect of paragraph (b) of
this section.
(ii) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(iii) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.02, 5.04 or 5.05.
(iv) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, unless it receives indemnity
satisfactory to it against any risk, loss, liability or expense.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this section.
(e) The Trustee, in its capacity as Trustee and Registrar and Paying
Agent, shall not be liable to the Company, the Noteholders or any other Person
for interest on any money received by it, including, but not limited to, money
with respect to principal of or interest on the Notes, except as the Trustee may
agree with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
SECTION 6.02. RIGHTS OF TRUSTEE.
(a) The Trustee may rely on any document reasonably believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(i) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate, an Opinion of Counsel or both. The
Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on any such Officers' Certificate or Opinion
of Counsel.
(ii) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed
with due care.
(iii) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or
within its rights or powers PROVIDED, HOWEVER, that the Trustee's
conduct does not constitute wilful misconduct, negligence or bad
faith.
(iv) The Trustee may consult with counsel, and the advice or
opinion of such counsel as to matters of law shall be full and
complete authorization and protection from liability in respect of any
action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice of such counsel.
(v) The Trustee shall not be obligated to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture or any other paper or document.
SECTION 6.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to Sections
6.04 and 6.11.
SECTION 6.04. TRUSTEES DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes, it shall not
be responsible for any statement in the Notes other than its authentication. The
Trustee shall have no duty to ascertain or inquire as to the performance of the
Company's covenants in Article 3 hereof.
SECTION 6.05. NOTICE OF DEFAULTS.
If a Default or an Event of Default occurs and is continuing and if it
is known to a Trust Officer of the Trustee, the Trustee shall mail to
Noteholders a notice of the Default or Event of Default within 90 days after a
Trust Officer of the Trustee has actual knowledge of the occurrence thereof.
Except in the case of a Default in any payment on any Note, the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interests of Noteholders.
SECTION 6.06. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after the reporting date stated in Section 11.09, the
Trustee shall mail to Noteholders a brief report dated as of such date that
complies with TIA ss. 313(a) if required by that Section. The Trustee also shall
comply with TIA ss. 313(b)(2).
A copy of each report at the time of its mailing to Noteholders shall
be filed with the Commission and each stock exchange on which the Notes are
listed. The Company shall promptly notify the Trustee when the Notes are listed
on any stock exchange and of any delisting thereof.
SECTION 6.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket
disbursements, expenses and advances incurred by it. Such expenses shall include
the reasonable compensation and out-of-pocket disbursements and expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee and its officers, directors,
employees and agents for, and hold it and them harmless against, any claim,
loss, liability or expense, including, but not limited to, reasonable attorneys'
fees, disbursements and expenses, incurred by it or them arising out of or in
connection with the administration of this trust and the performance of its or
their duties hereunder including the costs and expenses of defending itself or
themselves against any claim or liability in connection with the exercise or
performance of any of its or their powers or duties hereunder or under the
Security Agreement. The Trustee shall notify the Company promptly of any claim
for which it may seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company shall
defend the claim and the Trustee shall cooperate in the defense. The Trustee may
have separate counsel and the Company shall pay the reasonable fees and expenses
of such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee as a result of the negligence or
wilful misconduct of the Trustee.
To secure the Company's payment obligations in this section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.01(g) or (h) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's obligations under this Section 6.07 with respect to any
Lien arising hereunder shall survive the resignation or removal of the Trustee,
the discharge of such obligations pursuant to Article F of this Indenture and
the termination of this Indenture.
SECTION 6.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this section.
The Trustee may resign at any time by so notifying the Company. The
Holders of a majority in principal amount of the Notes then outstanding may, by
written notice to the Trustee, remove the Trustee by so notifying the Trustee
and the Company. The Company, by notice to the Trustee, shall remove the Trustee
if:
(a) the Trustee fails to comply with Section 6.10;
(b) the Trustee is adjudged a bankrupt or an insolvent;
(c) a receiver or public officer takes charge of the trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Notes then outstanding may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the Notes may petition any court
of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 6.10 any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and the Company. Thereupon the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Noteholders. The retiring Trustee shall promptly transfer all property held by
it as Trustee to the successor Trustee, subject to the Lien provided for in
Section 6.07.
SECTION 6.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
SECTION 6.10. ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1). The Trustee shall always have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with TIA ss.
310(b). Nothing herein shall prevent the Trustee from filing with the Commission
the application referred to in the second-to-last paragraph of TIA ss. 310(b).
SECTION 6.11. PREFERENTIAL COLLECTIONS OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA ss. 311(a), except with respect to
any creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned
or been removed is subject to TIA ss. 311(a) to the extent indicated.
ARTICLE 7
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 7.01. DISCHARGE OF LIABILITY ON NOTES; DEFEASANCE.
If (a) the Company delivers to the Trustee all outstanding Notes (other
than Notes replaced pursuant to Section 2.07) for cancellation or (b) all
outstanding Notes have become due and payable and the Company irrevocably
deposits with the Trustee as trust funds solely for the benefit of the Holders
for that purpose funds sufficient to pay at maturity the principal of and all
accrued interest on all outstanding Notes (other than Notes replaced pursuant to
Section 2.07), and if, in either case, the Company pays all other sums payable
hereunder by the Company, then, subject to Section 7.06, this Indenture shall
cease to be of further effect. The Trustee shall acknowledge satisfaction and
discharge of this Indenture on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the
Company.
SECTION 7.02. DEFEASANCE AND DISCHARGE OF INDENTURE.
The Company will be deemed to have paid and will be discharged from any
and all obligations in respect of the Notes on the 123rd day after the date of
the deposit referred to in clause (i) hereof, and the provisions of this
Indenture will no longer be in effect with respect to the Notes, in each case
subject to the penultimate paragraph of this Section 7.03, and the Trustee, at
the reasonable request of and at the expense of the Company, shall execute
proper instruments acknowledging the same, except as to (a) rights of
registration of transfer and exchange, (b) substitution of apparently mutilated,
defaced, destroyed, lost or stolen Notes, (c) rights of Holders to receive
payments of principal thereof and interest thereon, (d) the Company's
obligations under Section 3.02, (e) the rights, obligations and immunities of
the Trustee hereunder including, without limitation, those arising under Section
6.07 hereof, (f) the rights of the Holders as beneficiaries of this Indenture
with respect to the property so deposited with the Trustee payable to all or any
of them and (g) the rights, obligations and immunities which survive as provided
in the penultimate paragraph of this Section 7.02; provided that the following
conditions shall have been satisfied:
(i) with reference to this Section 7.02, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirement of Section 6.10) or
Paying Agent (other than the Company or a Subsidiary or Affiliate of the
Company) and conveyed all right, title and interest for the benefit of the
Holders, under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders, in and to, (A) money in an amount, (B) U.S. Government Obligations
that, through the payment of interest and principal in respect thereof in
accordance with their terms, will provide, not later than one Business Day
before the due date of any payment referred to in this clause (i), money in
an amount or (C) a combination thereof in an amount sufficient, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay and discharge, without consideration of any reinvestment of interest
and after payment of all federal, state and local taxes or other fees,
charges and assessments in respect thereof payable by the Trustee or Paying
Agent, the principal of and interest on the outstanding Notes when due;
provided that the Trustee or Paying Agent shall have been irrevocably
instructed to apply such money or the proceeds of such U.S. Government
Obligations to the payment of such principal and interest with respect to
the Notes;
(ii) such deposit shall not result in or constitute a Default or
result in a breach or violation of, or constitute a Default under, any
other agreement or instrument to which the Company is a party or by which
it is bound;
(iii) no Default shall have occurred and be continuing on the
date of such deposit or during the period ending on the 123rd day after
such date of deposit;
(iv) the Company shall have delivered to the Trustee (A) either
(1) a ruling directed to the Trustee received from the Internal Revenue
Service to the effect that the Holders will not recognize income, gain or
loss for federal income tax purposes as a result of the Company's exercise
of its option under this Section 7.02 and will be subject to federal income
tax on the same amount and in the same manner and at the same times as
would have been the case if such option had not been exercised or (2) an
Opinion of Counsel from recognized tax counsel licensed to practice law in
the United States (who may not be an employee of the Company) to the same
effect as the ruling described in clause (1), which must refer to and be
based upon a ruling to that effect published by the Internal Revenue
Service, unless there has been a change in the applicable federal income
tax law since the date of this Indenture such that a ruling from the
Internal Revenue Service is no longer required and (B) an Opinion of
Counsel to the effect that (1) the creation of the defeasance trust does
not violate the Investment Company Act of 1940, and (2) the Holders of the
Notes have a valid security interest in the trust funds subject to no prior
Liens under the New York Uniform Commercial Code;
(v) the Company shall have delivered to the Trustee an Opinion of
Counsel licensed to practice law in Bermuda to the effect that under the
laws of Bermuda, the Holders of the Notes (other than Bermuda Persons) will
not recognize gain for Bermuda tax purposes and payments from the
defeasance trust to any such Holder will not be subject to withholding
payments under the laws of Bermuda; and
(vi) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 7.02 have been complied with.
Notwithstanding the foregoing clause (i), prior to the end of the 123
day period referred to in clause (iv)(B)(2) above, none of the Company's
obligations under this Indenture shall be discharged. Subsequent to the end of
such 123-day period with respect to this Section 7.02, the Company's obligations
in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.12, 3.01, 3.02, 3.06, 6.07,
7.04, 7.05 and 7.06 shall survive until the Notes are no longer outstanding.
Thereafter, only the Company's obligations in Sections 6.07, 7.04, 7.05 and 7.06
shall survive. If and when a ruling from the Internal Revenue Service or Opinion
of Counsel referred to in clause (iv)(A) above is able to be provided
specifically without regard to, and not in reliance upon, the continuance of the
Company's obligations under Section 3.01, then the Company's obligations under
such Section 3.01 shall cease upon delivery to the Trustee of such ruling or
Opinion of Counsel and compliance with the other conditions precedent provided
for herein relating to the defeasance contemplated by this Section 7.02.
After any such irrevocable deposit and the fulfillment of the other
requirements of this Section 7.02, the Trustee upon request shall acknowledge in
writing the discharge of the Company's obligations under the Notes and this
Indenture except for those surviving obligation in the immediately preceding
paragraph.
SECTION 7.03. DEFEASANCE OF CERTAIN OBLIGATIONS.
The Company may omit to comply with any term, provision or condition
set forth in clauses (v) and (vi) of Section 4.01 and Section 3.03 through 3.23,
and clause (c) of Section 5.01 with respect to clauses (v) and (vi) of Section
4.01 and Sections 3.03 through 3.23, and clauses (d), (e) and (f) of Section
5.01 shall be deemed not to be Events of Default, in each case with respect to
the outstanding Notes if:
(i) with reference to this Section 7.03, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 6.10) or
Paying Agent (other than the Company or a Subsidiary or Affiliate of the
Company) and conveyed all right, title and interest for the benefit of the
Holders, under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders, in and to, (A) money in an amount, (B) U.S. Government Obligations
that, through the payment of interest and principal in respect thereof in
accordance with their terms, will provide, not later than one Business Day
before the due date of any payment referred to in this clause (i), money in
an amount or (C) a combination thereof in an amount, sufficient, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay and discharge, without consideration of any reinvestment of interest
and after payment of all federal, state and local taxes or other fees,
charges and assessments in respect thereof payable by the Trustee or Paying
Agent, the principal of and interest on the outstanding Notes when due;
provided that the Trustee or Paying Agent shall have been irrevocably
instructed to apply such money or the proceeds of such U.S. Government
Obligations to the payment of such principal and interest with respect to
the Notes;
(ii) such deposit will not result in or constitute a Default or
result in a breach or violation of, or constitute a default under, any
other agreement or instrument to which the Company is a party or by which
it is bound;
(iii) no Default shall have occurred and be continuing on the
date of such deposit;
(iv) the Company has delivered to the Trustee (A) an Opinion of
Counsel from recognized tax counsel licensed to practice law in the United
States (who may not be an employee of the Company) to the effect that the
Holders will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and defeasance of certain obligations
and will be subject to federal income tax on the same amount and in the
same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred; and (B) an Opinion of Counsel to
the effect that (1) the creation of the defeasance trust does not violate
the Investment Company Act of 1940, and (2) the Holders of the Notes have a
valid security interest in the trust funds subject to no prior Liens under
the New York Uniform Commercial Code;
(v) the Company shall have delivered to the Trustee an Opinion of
Counsel licensed to practice law in Bermuda to the effect that under the
laws of Bermuda the Holders of the Notes (other than Bermuda Persons) will
not recognize gain for Bermuda tax purposes and payments from the
defeasance trust to any such Holder will not be subject to withholding
payments under the laws of Bermuda; and
(vi) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 7.03 have been complied with.
SECTION 7.04. APPLICATION OF TRUST MONEY.
Subject to Section 7.06 of this Indenture, the Trustee or Paying Agent
shall hold in trust money or U.S. Government Obligations deposited with it
pursuant to Section 7.02 or 7.03 of this Indenture, as the case may be, and
shall apply the deposited money and the money from U.S. Government Obligations
in accordance with this Indenture to the payment of principal of and interest on
the Notes. The Trustee shall be under no obligation to invest such money or U.S.
Government Obligations except as it may agree with the Company and in no event
shall the Trustee have any liability for, or in respect of, any such investment
made as agreed with the Company.
SECTION 7.05. REPAYMENT TO COMPANY.
Subject to Sections 6.07, 7.02 and 7.03 of this Indenture, the Trustee
and the Paying Agent shall promptly pay to the Company upon written request any
excess money held by them at any time and thereupon shall be relieved from all
liability with respect to such money. The Trustee and the Paying Agent shall pay
to the Company upon written request any money held by them for the payment of
principal or interest that remains unclaimed for two years; PROVIDED, HOWEVER,
that the Company shall if requested by the Trustee or the Paying Agent, give the
Trustee or such Paying Agent indemnification reasonably satisfactory to it
against any and all liability which may be incurred by it by reason of such
payment; and provided, further, that the Trustee or such Paying Agent before
being required to make any payment may cause to be published at the request and
expense of the Company once in a newspaper of general circulation in the City of
New York or mail to each Holder entitled to such money at such Holder's address
as set forth in the Note Register notice that such money remains unclaimed and
that after a date specified therein (which shall be at least 30 days from the
date of such publication or mailing) any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company, Holders
entitled to such money must look to the Company for payment as general creditors
unless an applicable law designates another person, and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
SECTION 7.06. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 7.02 or 7.03 of this
Indenture, as the case may be, by reason of any legal proceedings or by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's obligations
under this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 7.02 or 7.03 of this Indenture, as the
case may be, until such time as the Trustee or Paying Agent is permitted to
apply all such money or U.S. Government Obligations in accordance with Section
7.02 or 7.03 of this Indenture, as the case may be; provided that, if the
Company has made any payment of principal of or interest on any Notes because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money or
U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE 8
AMENDMENTS AND SUPPLEMENTS
SECTION 8.01. WITHOUT CONSENT OF HOLDERS.
(a) The Company and the Trustee may amend or supplement the Indenture
without notice to or the consent of any Noteholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 4;
(3) to provide for uncertificated Notes in addition to
certificated Notes; provided, however, that the uncertificated
Notes are issued, in registered form for purposes of Section
163(f) of the Internal Revenue Code of 1986, as amended, or in a
manner such that the uncertificated Notes are described in Section
163(f)(2)(b) of the Code;
(4) to add guarantees with respect to the Notes or to further
secure the Notes;
(5) to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred
upon the Company;
(6) to comply with the requirements of the Commission in
connection with qualification of this Indenture under the TIA;
(7) to establish and maintain the Liens of the Security
Agreement; or
(8) to make any change that does not adversely affect the
rights of any Noteholder.
(b) The Company and the Trustee may amend or supplement the Security
Agreement without notice to or the consent of any Noteholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 4;
(3) to add additional guarantees with respect to the Notes or
to further secure the Notes;
(4) to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred
upon the Company;
(5) to comply with the requirements of the Commission in
connection with qualification of this Indenture under the TIA;
(6) to establish and maintain the Liens of the Security
Agreement; or
(7) to make any change that does not adversely affect the
rights of any Noteholder.
(c) After an amendment or supplement under this Section becomes
effective, the Company shall mail to Noteholders a notice briefly describing
such amendment or supplement. The failure to give such notice to all
Noteholders, or any defect therein, shall not impair or affect the validity of
an amendment or supplement under this section.
SECTION 8.02. WITH CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this Indenture, the
Notes or the Security Agreement with the written consent of the Holders of a
majority in principal amount of the Notes then outstanding. However, without the
consent of each Noteholder affected, an amendment or supplement under this
Section may not
(a) reduce the amount of Notes the Holders of which must consent to an
amendment or supplement;
(b) reduce the rate of or change the time for payment of interest on
any Note;
(c) change the currency or consideration of payment of the Notes;
(d) reduce the principal of or change the Stated Maturity of any Note;
(e) reduce the premium payable upon the redemption of any Note or
change the time at which any Note may or shall be redeemed in accordance with
Article 10;
(f) amend, change or modify the obligations of the Company to make or
consummate any offer pursuant to Section 3.08 or 3.12 or modify any of the
provisions or definitions with respect thereto;
(g) permit the release or termination of all or substantially all of
the Liens of the Collateral Agent on the Collateral or deprive the Holders of
all or substantially all of the security afforded by the Liens of the Security
Agreement or this Indenture;
(h) release the Company from its obligations under this Indenture other
than pursuant to Article 4 hereof;
(i) permit the creation of any Lien (other than Liens permitted under
Section 3.07) on the Collateral or any part thereof or terminate the Liens of
the Collateral Agent on the Collateral or any part thereof or deprive the
holders of the security afforded by the Liens of the Security Agreement or this
Indenture;
(j) change the obligation of the Company to pay Additional Amounts; and
(k) make any change in Section 5.04, Section 5.07 or this second
sentence of this Section 8.02.
It shall not be necessary for the consent of the Holders under this
Section 8.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof. After an amendment or supplement under this Section becomes
effective, the Company shall mail to Noteholders a notice briefly describing
such amendment or supplement. The failure to give such notice to all
Noteholders, or any defect therein, shall not impair or affect the validity of
an amendment or supplement under this section.
SECTION 8.03. SUPPLEMENTAL INDENTURES.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in a supplemental indenture that complies with the TIA as then in
effect.
SECTION 8.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment or supplement under this Article or a waiver under
Article 6 becomes effective, a consent to it by a Holder of a Note is a
continuing consent by the Holder and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder's Note,
even if notation of the consent is not made on any Note. However, any such
Holder or subsequent Holder may revoke the consent as to his Note or portion of
a Note if the Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective.
After an amendment or supplement becomes effective, it shall bind every
Noteholder.
SECTION 8.05. NOTATION ON OR EXCHANGE OF NOTES.
If an amendment changes the terms of a Note, the Trustee may require
the Holder of the Note to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Note regarding the changed terms and return it to
the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Note shall issue and the Trustee shall authenticate
a new Note that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Note shall not affect the validity of such amendment.
SECTION 8.06. TRUSTEE TO SIGN AMENDMENTS.
The Trustee shall sign any supplemental indenture which sets forth an
amendment or supplement authorized pursuant to this Article if the amendment or
supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may but need not sign it. In
signing such supplemental indenture the Trustee shall be entitled to receive,
and (subject to Section 6.01) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that such supplemental
indenture is authorized or permitted by this Indenture and, with respect to an
amendment or supplement pursuant to Section 8.02, evidence of the consents of
Holders required in connection therewith.
SECTION 8.07. FIXING OF RECORD DATES.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to take any action under this
Indenture by vote or consent. Except as provided herein, such record date shall
be the later of 30 days prior to the first solicitation of such consent or vote
or the date of the most recent list of Noteholders furnished to the Trustee
pursuant to Section 2.05 prior to such solicitation. If a record date is fixed,
those Persons who were Noteholders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to take such action by vote
or consent or to revoke any vote or consent previously given, whether or not
such Persons continue to be Holders after such record date; PROVIDED, HOWEVER,
that unless such vote or consent is obtained from the Holders (or their duly
designated proxies) of the requisite principal amount of outstanding Notes prior
to the date which is the 120th day after such record date, any such vote or
consent previously given shall automatically and without further action by any
Holder be canceled and of no further effect.
ARTICLE 9
SECURITY AGREEMENT
SECTION 9.01. SECURITY AGREEMENT. (a) In order to secure the
obligations of the Company under this Indenture, the Company, the Collateral
Agent and the Trustee have entered into the Security Agreement to create the
Liens of the Security Agreement and for related matters.
(b) The Company covenants and agrees that it has full right, power and
lawful authority to grant, bargain, sell, release, convey, hypothecate, assign,
mortgage, pledge and transfer the Collateral, in the manner and form done, or
intended to be done, in this Indenture and the Security Agreement. The Company
further covenants and agrees that the Security Agreement and the actions taken
hereunder and thereunder create, or will create, a perfected first priority Lien
on the Collateral which they purport to create, prior to all other Liens.
(c) As among the Holders, the Collateral as now or hereafter
constituted shall be held for the equal and ratable benefit of the Holders
without preference, priority or distinction of any thereof over any other by
reason of difference in time of issuance, sale or otherwise, as security for the
Company's obligations under this Indenture and the Notes.
SECTION 9.02. HOLDERS' CONSENT. Each Holder, by its acceptance of a
Note, (i) consents and agrees to the terms of the Security Agreement and
authorizes and approves the Trustee's execution thereof, and (ii) agrees that
such Holder is bound by the terms thereof and that such Holder may not take any
action contrary thereto.
SECTION 9.03. TRUST INDENTURE ACT OF 1939 REQUIREMENTS. The release of
any Collateral from the terms of the Security Agreement or the release of, in
whole or in part, the Liens created by the Security Agreement, will not be
deemed to impair the Liens of the Security Agreement in contravention of the
provisions hereof and of the Security Agreement if and to the extent the
Collateral or Liens are released pursuant to the terms of the Security
Agreement. Each of the Holders acknowledges that a release of Collateral or
Liens strictly in accordance with the terms of the Security Agreement will not
be deemed for any purpose to be an impairment of the Liens in contravention of
the terms of this Indenture or the Security Agreement.
SECTION 9.04. RELEASE UPON TERMINATION OF THE COMPANY'S OBLIGATIONS.
(a) In the event that the Company delivers an Officers' Certificate
certifying that the Company has complied with Sections 7.01 and, if applicable,
Section 7.02 with respect to the Notes, or that all obligations under this
Indenture have been satisfied and discharged in accordance with this Indenture,
the Trustee shall deliver to the Company and the Collateral Agent on behalf of
the Holders, a notice disclaiming, relinquishing and releasing (without recourse
or warranty) any and all rights it has in respect of the Collateral and any
other instruments or documents evidencing or effecting such release in such form
as the Company may reasonably request.
(b) Any release of any portion of the Collateral made strictly in
compliance with the provisions of this Section 9.04 shall not be deemed to
impair the Liens created by the Security Agreement in contravention of the
provisions of this Indenture.
(c) RELEASE OF COLLATERAL. To the extent applicable, the Company shall
comply with clause Section 314(d) of the TIA relating to the release of property
from the Lien of the Security Agreement.
SECTION 9.05. RETIREMENT OF NOTES. The Trustee shall direct the
Collateral Agent to release such amounts held in the Special Proceeds Account
and the Trustee shall apply such amounts from time to time to the payment
(including any premium) of the principal on the Notes, at maturity or to the
purchase thereof pursuant to a Special Proceeds Offer together with accrued
interest, if any, required to be paid in connection with any such purchase or
payment at maturity as the Company shall request, upon receipt by the Trustee of
the following:
(a) a Board Resolution directing the application pursuant to this
Section 9.05 of the Collateral and prescribing the method of purchase, the price
or prices to be paid and the maximum principal (including any premium) amount of
Notes of such Series to be purchased and any other provisions of this Indenture
governing such purchase;
(b) an Officers' Certificate dated not more than five days prior to the
date of the relevant application, stating that all conditions precedent and
covenants herein and in the Security Agreement provided for relating to such
application of the Collateral have been complied with; and
(c) an Opinion of Counsel stating that the documents and the amounts in
such coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts, in
immediately available funds, if any, which have been or are therewith delivered
to and deposited with the Collateral Agent or the Trustee, as the case may be,
for the purposes of payment of the principal (including any premium) and
interest on the Notes at maturity or to purchase thereof pursuant to a Special
Proceeds Offer conform to the requirements of this Indenture and the Security
Agreement and that all conditions precedent herein and in the Security Agreement
provided for relating to such application of Collateral have been complied with.
Upon compliance with the foregoing provisions of this Section 9.05, the
Trustee shall apply funds released from the Collateral Accounts as directed and
specified by such Board Resolution up to, but not exceeding, the principal
amount (including any premium) of the Notes so paid or purchased together with
accrued interest, if any, required to be paid in connection with any such
purchase or payment at maturity.
A Board Resolution expressed to be irrevocable directing the
application of funds from the Collateral Accounts under this Section 9.05 to the
payment of the principal (including any premium), and accrued interest if any,
shall, for all purposes of this Indenture, be deemed the equivalent of the
deposit of money with the Trustee in trust for such purpose. Such funds from the
Collateral Accounts shall not, after compliance with the foregoing provisions of
this Section 9.05, be deemed to be part of the Collateral.
ARTICLE 10
REDEMPTION
SECTION 10.01. NOTICE TO TRUSTEE.
If the Company elects to redeem Notes pursuant to paragraph 7 or 8 of
the Notes, it shall notify the Trustee of the redemption date and the principal
amount (not including any premium in respect thereof) of Notes to be redeemed
and the paragraph of the Notes pursuant to which the redemption will occur.
The Company shall give the notices provided for in this Section at
least 40 days before the redemption date (unless a shorter period shall be
satisfactory to the Trustee). Such notice shall be accompanied by an Officers'
Certificate to the effect that such redemption will comply with the conditions
herein. If fewer than all the Notes are to be redeemed, the record date relating
to such redemption shall be selected by the Company and given to the Trustee,
which record date shall be not less than 15 days after the date of notice to the
Trustee.
SECTION 10.02. SELECTION OF NOTES TO BE REDEEMED.
If fewer than all the Notes are to be redeemed, the Trustee shall
select the Notes to be redeemed on a pro rata basis or by lot or by any other
method that complies with applicable legal and securities exchange requirements,
if any, and that the Trustee consider fair and appropriate and in accordance
with methods generally used at the time of selection by fiduciaries in similar
circumstances, PROVIDED, HOWEVER, that no Note of $1,000 in original principal
amount or less shall be redeemed in part. The Trustee shall make the selection
not more than 45 days before the redemption date from outstanding Notes not
previously called for redemption. The Trustee may select for redemption portions
of the principal of Notes that have denominations larger than $1,000. Notes and
portions of them selected by the Trustee shall be in amounts of $1,000 or whole
multiples of $1,000. Provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption.
SECTION 10.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption to each Holder whose Notes are to
be redeemed at the address set forth for such Holder on the register referred to
in Section 2.03. Such notice, once delivered by the Company or to the Trustee,
will be irrevocable.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(e) if fewer than all the outstanding Notes are to be redeemed, the
aggregate principal amount of the Notes to be redeemed together with the
identification and principal amounts of the particular Notes to be redeemed;
(f) that, unless the Company defaults in making the redemption payment,
interest accrued to the date fixed for redemption and any Additional Amounts
will be paid as specified in the notice and that interest on Notes called for
redemption ceases to accrue on and after the redemption date; and
(g) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's written request, made at least 45 days before a
redemption date, unless a shorter period shall be satisfactory to the Trustee,
the Trustee shall give the notice of redemption provided for in this section in
the Company's name and at its expense.
SECTION 10.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Notes called for redemption become
due and payable on the redemption date at the redemption price. Upon surrender
to the Paying Agent, such Notes shall be paid at the redemption price stated in
the notice, plus accrued and unpaid interest to the redemption date.
SECTION 10.05. DEPOSIT OF REDEMPTION PRICE.
Prior to 11:00 a.m., eastern standard time, the redemption date, the
Company shall deposit with the Paying Agent (or, if the Company or a Subsidiary
of the Company is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of and accrued and unpaid interest on all
Notes to be redeemed on that date other than Notes or portions of Notes called
for redemption which have been delivered by the Company to the Trustee for
cancellation.
SECTION 10.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
execute and the Trustee shall authenticate for the Holder (at the Company's
expense) a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
SECTION 10.07. OPTIONAL REDEMPTION FOR CHANGES IN WITHHOLDING TAXES.
The Notes may be redeemed, in whole but not in part, at the option of
the Company, at any time, upon giving of notice as provided in Section 10.03 at
a redemption price equal to 100% of the principal amount at maturity thereof,
together with accrued and unpaid interest to the date fixed by the Company for
redemption, if the Company determines and certifies to the Trustee in an
Officers' Certificate immediately prior to the giving of such notice that, as a
result of any change in, or amendment to, the laws or treaties (including any
regulations or rulings promulgated thereunder) of Bermuda or such other
jurisdiction in which the Company is then organized, as the case may be (or any
political subdivision or taxing authority thereof or therein), affecting
taxation, or any change in official position regarding the application,
interpretation or administration of such laws, treaties, regulations or rulings
(including a holding, judgment or order by a court of competent jurisdiction),
which change, amendment, application, interpretation or administration is
announced or becomes effective on or after the date hereof with respect to any
payment due or to become due under the Notes or this Indenture, the Company is,
or on the next interest payment date would be, required to pay Additional
Amounts on or in respect thereof and such obligation to pay Additional Amounts
cannot be avoided by the taking of reasonable measures by the Company; provided
that no such notice of redemption shall be given earlier than 90 days prior to
the earliest date on which the Company would be obligated to make such
withholding if a payment in respect of the Notes were then due.
Prior to the publication and mailing of any notice of redemption of the
Notes pursuant to Section 10.03, the Company will deliver to the Trustee an
Opinion of Counsel or written advice of a qualified tax expert, such counsel or
tax expert being reasonably acceptable to the Trustee, that the Company has or
will become obligated to pay Additional Amounts as a result of such change,
amendment, application, interpretation or administration.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by any of TIA ss. 310 to 317, inclusive, through operation of
TIA ss. 318(c), such imposed duties shall control.
SECTION 11.02. NOTICES.
Any notice or communication shall be in writing and delivered in
person, or mailed by first-class mail (certified, return receipt requested),
addressed as follows:
if to the Company:
AES China Generating Co., Ltd.
3/f(w) Golden Bridge Plaza
No. 1(A) ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇▇ of China
Attention: Chief Financial Officer
if to the Trustee:
Bankers Trust Company
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust and Agency Group / Debt Administration
The Company or the Trustee by notice to the others may designate
additional or different addresses for subsequent notices or communications. Any
notice to the Trustee under this Indenture shall be deemed given only when
received by the Trustee at the address specified in this Section 11.02.
Any notice or communication to a Noteholder shall be mailed by
first-class mail to the Noteholder's address shown on the register kept by the
Registrar. Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Noteholders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 11.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Noteholders may communicate pursuant to TIA ss. 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA ss. 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall, if requested by the Trustee,
furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers, all
conditions precedent (including any covenants compliance with which constitutes
a condition precedent), if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee stating that, in the opinion of such counsel (which may rely upon
an Officers' Certificate as to factual matters), all such conditions precedent
have been complied with.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each Officers' Certificate or Opinion of Counsel with respect to
compliance with a condition or covenant provided for in this Indenture other
than certificates provided pursuant to Section 3.09 shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or a meeting of
Noteholders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.07. SUCCESSORS; NO RECOURSE AGAINST OTHERS.
(a) All agreements of the Company in this Indenture and the Notes shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
(b) All liability of the Company described in the Notes insofar as it
relates to any director, officer, employee or stockholder, as such, of the
Company is waived and released by each Noteholder.
SECTION 11.08. DUPLICATE ORIGINALS.
The parties may sign any number of copies of this Indenture. One signed
copy is enough to prove this Indenture.
SECTION 11.09. OTHER PROVISIONS.
The first certificate pursuant to Section 3.09 shall be for the fiscal
year ending November 30, 1997.
The reporting date for Section 6.06 is November 30 of each year. The
first reporting date is November 30, 1997.
SECTION 11.10. GOVERNING LAW.
The laws of the State of New York govern this Indenture and the Notes,
without regard to the conflicts of laws rules thereof.
SECTION 11.11. CONSENT TO JURISDICTION.
The Company irrevocably submits to the jurisdiction of the United
States District Court for the Southern District of New York, any court in the
State of New York located in the city and county of New York, and any appellate
court from any thereof, in any action, suit or proceeding brought against it and
related to or in connection with the Notes or this Indenture or for recognition
or enforcement of any judgment and the Company irrevocably and unconditionally
agrees that all claims in respect of any such suit or action or proceeding may
be heard or determined in such New York State court or, to the extent permitted
by law, in such federal court. The Company agrees that a final judgment in any
such action, suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. To
the extent permitted by applicable law, the Company hereby waives and agrees not
to assert by way of motion, as a defense or otherwise in any such suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction
of such courts, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is improper
or that the Notes or this Indenture or the subject matter hereof or thereof may
not be litigated in or by such courts. The Company hereby irrevocably appoints
and designates The ▇▇▇▇▇▇▇▇-▇▇▇▇ Corporation System, Inc., as its true and
lawful attorney and duly authorized agent for acceptance of service of legal
process. The Company agrees that service of such process upon The ▇▇▇▇▇▇▇▇-▇▇▇▇
Corporation System, Inc. at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
shall constitute personal service of such process upon the Company. Nothing
contained in this Agreement shall limit or affect the rights of any party hereto
to serve process in any other manner permitted by law or (other than the
Company) to initiate legal proceedings against the Company or its property in
the courts of any jurisdiction.
SECTION 11.12. JUDGMENT CURRENCY.
If for the purpose of obtaining judgement in any court it is necessary
to convert a sum due hereunder to the Holder of a Note in U.S. dollars into
another currency (the "judgment currency"), the parties hereto agree, to the
fullest extent that they may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures such Holder
could purchase U.S. dollars with the judgment currency in New York City two
Business Days preceding the day on which final judgment is given. The obligation
of the Company in respect of any sum payable by it to the Holder of a Note
hereunder shall, notwithstanding any judgment in a judgment currency other than
U.S. dollars, be discharged only to the extent that on the Business Day
following receipt by such Holder of any sum adjudged to be so due in the
judgment currency, such Holder may in accordance with normal banking procedures
purchase U.S. dollars with the judgment currency; if the amount of the U.S.
dollars so purchased is less than the sum originally due upon the Note, the
Company agrees, as a separate obligation and notwithstanding any such judgment,
to indemnify such Holder against such loss, and if the amount of the U.S.
dollars so purchase exceeds the sum originally due to such Holder, such Holder
agrees to remit to the Company such excess, provided that such Holder shall have
no obligation to remit any such excess as long as the Company shall have failed
to pay such Holder any obligations due and payable under this Indenture or such
Note, in which case such excess may be applied to such obligations of the
Company hereunder in accordance with the terms of this Indenture or such Note.
SECTION 11.13. EFFECT OF HEADINGS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 11.14. WAIVER OF IMMUNITY.
To the extent that the Company has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgement, attachment in aid or
execution, or otherwise) with respect to itself or its property, such party
hereby irrevocably waives such immunity in respect of its obligations hereunder
to the extent permitted by applicable law and, without limiting the generality
of the foregoing, agrees that the waivers set forth in this paragraph shall have
effect to the fullest extent permitted under the Foreign Sovereign Immunities
Act of 1976 of the United States and are intended to be irrevocable for purposes
of such Act.
SECTION 11.15. TAX CONSIDERATIONS.
It is the intention of the Company that for U.S. Federal, state and
local income tax purposes: (i) neither the Noteholders nor the Trustee shall be
at any time the owner of the Collateral for U.S. Federal, state or local tax
purposes and (ii) the trust estate created hereby is intended solely to be a
security arrangement and not a trust and neither the Trustee nor the Noteholders
shall file any returns, reports or other documents or take any position
inconsistent therewith for U.S. Federal, state or local tax law purposes.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as set forth on the first page hereof.
(SEAL) AES CHINA GENERATING CO. LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President, Chief Financial
Officer and Secretary
Attest:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇ AT. Hanrahan
President and Chief Executive
Officer
BANKERS TRUST COMPANY,
as Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Assistant Secretary
Attest:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Assistant Treasurer
EXHIBIT A
(Form of Face of Note)
[The following two paragraphs are to be reproduced on the Global Note.]
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Company (as
defined below) or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co., or such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co., or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
Unless and until it is exchanged in whole or in part for Notes in
definitive registered form, this certificate may not be transferred except as a
whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another
nominee of DTC or by DTC or any such nominee to a successor Depositary or a
nominee of such successor Depositary.
AES CHINA GENERATING CO. LTD.
10 1/8% Notes Due 2006
$180,000,000
No. CUSIP No.: ▇▇▇▇▇▇▇▇▇
AES China Generating Co. Ltd., a corporation organized under the laws
of Bermuda (the "Company"), promises to pay to Cede & Co., or registered
assigns, the principal sum of ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ dollars
(US$180,000,000) on December 15, 2006.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
Additional provisions of this Note are set forth on the reverse hereof.
Such provisions shall for all purposes have the same effect as though fully set
forth at this place.
This Note shall not be valid or obligatory until the certificate of
authentication hereon shall have been duly signed by the Trustee acting under
the Indenture.
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IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officer under its corporate
seal.
Date: December 19, 1996
AES CHINA GENERATING CO. LTD.
By:---------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION:
BANKERS TRUST COMPANY, as Trustee,
certifies that this is one
of the Notes
referred to in the Indenture.
By:--------------------------------
Authorized Signature
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(Form of Reverse of Note)
AES CHINA GENERATING CO. LTD.
10 1/8% Notes Due 2006
(1) INDENTURE. The Note is one of a duly authorized issue of debt
securities (the "Notes") of the Company limited to $180,000,000 in aggregate
principal amount issued under an Indenture dated as of December 19, 1996 (the
"Indenture") among the Company and Bankers Trust Company, a New York banking
Corporation, as trustee (the "Trustee"). The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S. Code ss.ss.77aaa-77bbbb) (the "TIA").
Capitalized terms used herein but not defined are used as defined in the
Indenture. The Notes are subject to all such terms, and Noteholders are referred
to the Indenture and the TIA for a statement of such terms.
(2) RANKING. The Notes rank at least pari passu in right of payment
with all existing and future unsecured Indebtedness of the Company.
(3) SECURITY AGREEMENT. As provided in the Security Agreement dated as
of December 19, 1996, among the Company, Bankers Trust Company, as Trustee, and
Bankers Trust Company, as collateral agent (the "Collateral Agent"), the
Company's obligations under the Indenture and the Notes are secured by a lien
on, and a security interest in, the Collateral granted in favor of the
Collateral Agent for the benefit of the Trustee on behalf of the Noteholders.
The rights of the Trustee in and to the Collateral are governed by the terms of
the Security Agreement.
(4) INTEREST. The Company promises to pay interest on the principal
amount of this Note at the rate per annum shown above. The Company will pay
interest semiannually on June 15 and December 15 of each year, commencing June
15, 1997, to Holders of record on June 1 and December 1 of each year,
respectively. Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from December 19,
1996. Interest will be computed on the basis of a 360-day year consisting of
twelve 30-day months.
(5) METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) to the persons who are registered Holders of Notes
at the close of business on the record date next preceding the interest payment
date even though Notes are canceled after the record date and on or before the
interest payment date. Holders must surrender Notes to a Paying Agent to collect
principal payments. The Company will pay principal and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. However, the Company may pay principal and interest by check
payable in such money. It may mail an interest check to a Holder's registered
address.
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(6) PAYING AGENT, REGISTRAR. Initially, Bankers Trust Company, a New
York banking corporation, will act as Paying Agent and Registrar. The Company
may change any Paying Agent or Registrar without notice. The Company may act as
Paying Agent or Registrar.
(7) OPTIONAL REDEMPTION. Except as set forth in the following
paragraph, the Company may not redeem the Notes prior to December 15, 2001. On
and after such date, the Company may redeem the Notes at any time, in whole, or
from time to time in part, at the following redemption prices (expressed in
percentages of principal amount), plus accrued interest to the redemption date,
if redeemed during the 12-month period beginning December 15:
YEAR REDEMPTION PRICE
---- ----------------
2001 105.063%
2002 102.531%
2003 and thereafter 100.000%
(8) OPTIONAL REDEMPTION FOR CHANGES IN WITHHOLDING TAXES. The Notes may
be redeemed, in whole but not in part, at the option of the Company, at any
time, at a redemption price equal to 100% of the principal amount at maturity
thereof, together with accrued and unpaid interest to the date fixed by the
Company for redemption, if as a result of any change in, or amendment to, the
laws or treaties (including any regulations or rulings promulgated thereunder)
of Bermuda or such other jurisdiction in which the Company is then organized, as
the case may be (or any political subdivision or taxing authority thereof or
therein), affecting taxation, or any change in official position regarding the
application, interpretation or administration of such laws, treaties,
regulations or rulings (including a holding, judgment or order by a court of
competent jurisdiction), which change, amendment, application, interpretation or
administration is announced or becomes effective on or after the Date hereof
with respect to any payment due or to become due under the Notes or the
Indenture, the Company is, or on the next interest payment date would be,
required to pay Additional Amounts on or in respect thereof.
(9) NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder of
Notes to be redeemed at the address set forth for such Holder on the register
referred to in Section 2.03 of the Indenture. Unless the Company shall default
in payment of the redemption price plus accrued interest, on and after the
redemption date interest ceases to accrue on such Notes or portions of them
called for redemption. Notes in denominations larger than $1,000 may be redeemed
in part but only in whole multiples of $1,000.
(10) DENOMINATIONS; TRANSFER; EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and whole multiples of $1,000.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption (except, in the case of a Note to be redeemed in part, the portion
thereof not to be
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redeemed) or for a period of 15 days before a selection of Notes to be redeemed
or 15 days before an interest payment date.
(11) CHANGE OF CONTROL OFFER. Upon a Change of Control Triggering
Event, the Company shall make an offer to purchase the Notes then outstanding at
a purchase price of not less that 101% of the principal amount thereof
(excluding any premium), plus accrued and unpaid interest to the date of
purchase.
(12) EXCESS PROCEEDS OFFER. To the extent of the balance of the Net
Available Cash after application thereof after certain Asset Sales in accordance
with the Indenture, the Company shall make an offer to purchase the Notes at a
purchase price of not less than 100% of the principal amount (excluding any
premium), plus accrued and unpaid interest to the date of purchase.
(13) SPECIAL PROCEEDS OFFER. The Company shall, within 30 days after
the occurrence of any Special Proceeds Event, cause all Special Proceeds with
respect to such Special Proceeds Event to be deposited into a Collateral Account
with the Collateral Agent and the Company shall, to the extent of the amounts on
deposit in the Special Proceeds collateral account, subject to certain
exceptions, make an offer to purchase the Notes at a purchase price of not less
that 101% of the principal amount (excluding any premium), plus accrued and
unpaid interest to the date of purchase.
(14) DEFEASANCE. Subject to certain conditions, the obligations under
the Notes and the Indenture may be terminated, at any time, if the Company
deposits with the Trustee money, U.S. Government Obligations or a combination
thereof for the payment of principal and interest on the Notes to redemption or
maturity, as the case may be.
(15) PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes, except that interest (other than
defaulted interest) will be paid to the person that was the registered Holder on
the relevant record date for such payment of interest.
(16) AMENDMENTS AND WAIVERS. Subject to certain exceptions, (i) the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of a majority in principal amount of the Notes then outstanding; and
(ii) any existing default may be waived with the consent of the Holders of a
majority in principal amount of the Notes then outstanding. Without the consent
of any Noteholder, the Indenture or the Notes may be amended or supplemented to
cure any ambiguity, omission, defect or inconsistency, to provide for assumption
of Company's obligations to Noteholders, to provide for uncertificated Notes in
addition to or in place of certificated Notes (subject to certain conditions),
to provide for additional guarantees with respect to the Notes or to further
secure the Notes, to add additional covenants or surrender any of the Company's
rights, to comply with the requirements of the Commission in connection with
qualification under the TIA, to establish or maintain the Liens of the Security
Agreement or to make any change that does not adversely affect the rights of any
Noteholder.
(17) REMEDIES. If an Event of Default occurs and is continuing, the
Trustee or Holders of at least 25% in aggregate principal amount of the Notes
then outstanding may declare
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all the Notes to be due and payable immediately. Noteholders may not enforce the
Indenture or the Notes except as provided in the Indenture. The Trustee may
require an indemnity before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of a majority in principal amount of the Notes then
outstanding may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Noteholders notice of any continuing default (except a
Default in payment of principal or interest) if it determines that withholding
notice is in their interest. The Company must furnish an annual compliance
certificate to the Trustee.
(18) NO RECOURSE AGAINST OTHERS. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based thereon or, in respect thereof. Each Noteholder by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
(19) AUTHENTICATION. This Note shall not be valid until authenticated
by the manual signature of an authorized signatory of the Trustee or an
authenticating agent thereof.
(20) ABBREVIATIONS. Customary abbreviations may be used in the name of
a Noteholder or an assignee, such as: TEN COM (= tenants in common), TENANT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts
to Minors Act).
Pursuant to a recommendation promulgated by the Committee on Uniform
Note Identification Procedures the Company has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Noteholders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
THE COMPANY WILL FURNISH TO ANY NOTEHOLDER UPON WRITTEN REQUEST AND
WITHOUT CHARGE A COPY OF THE INDENTURE, WHICH HAS IN IT THE TEXT OF THIS NOTE.
REQUESTS MAY BE MADE TO: AES CHINA GENERATING CO. LTD., 9/F., ALLIED CAPITAL
RESOURCES BLDG., ▇▇-▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇.: CHIEF
FINANCIAL OFFICER.
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Insert assignee's soc. sec. or tax I.D. no.)
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(Print or type assignee's name, address and zip code)
and irrevocably appoint -------------------- agent to transfer this Note on the
books of the Company. The agent may substitute another to act for him.
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Date:------------------------ Signed:-------------------------------
-------------------------------
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:------------------------------------------------------------
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OPTION OF HOLDER TO ELECT PURCHASE FORM
If you wish to elect to have this Note purchased by the Company pursuant to
Section 3.08 or 3.12 of the Indenture, check this box: [ ]
If you wish to elect to have only part of this Note purchased by the Company
pursuant to Section 3.08 or 3.12 of the Indenture, state the amount: $----------
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*As set forth in the Indenture, any purchase pursuant to Section 3.08
or 3.12 is subject to proration in the event the offer is oversubscribed.
Date:------------------------ Signed:-------------------------------
-------------------------------
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:------------------------------------------------------------
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