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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported: March 24, 1996
THE AES CORPORATION
(exact name of registrant as specified in its charter)
DELAWARE 333-15487 54-1163725
(State of Incorporation) (Commision File No.) (I.R.S. Employer
Identification No.)
1001 North 19th Street
Arlington, Va 22209
(Address of principal executive offices, includingzip code)
Registrant's telephone number, including area code:
(703) 522-1315
NOT APPLICABLE
(Former Name or Former Address, if changed since last report)
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Item 5: OTHER EVENTS
The AES Corporation (the "Company") and AES Trust I (the "Trust")
propose to conduct public offerings (the "Public Offerings") pursuant to a
registration statement on Form S-3 (No. 333-15487) filed with the Securities
and Exchange Commission together with Amendments No. 1 and No. 2 thereto (the
"Registration Statement").
The Company is filing the underlying documents for the proposed public
offering via this Form 8-K.
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ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits
The following items are filed as exhibits to this current report
on Form 8-K:
4.1 Form of the Amended and Restated Declaration of Trust,
among The AES Corporation, The First National Bank of
Chicago and First Chicago Delaware Inc.
4.2 Form of Junior Subordinated Indenture between the AES
Corporation and The First National Bank of Chicago.
4.3 Form of First Supplemental Indenture between The AES
Corporation and the First National Bank of Chicago.
4.4 Form of Guarantee Agreement between The AES Corporation
and The First National Bank of Chicago.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE AES CORPORATION
By: /s/ Barry J. Sharp
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Barry J. Sharp
Vice President
and Chief Financial Officer
Date: March 24, 1997
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EXHIBIT INDEX
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Exhibit
No. Description
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4.1 Form of the Amended and Restated Declaration of Trust, among The AES
Corporation, The First National Bank of Chicago and First Chicago
Delaware Inc.
4.2 Form of Junior Subordinated Indenture, between the AES Corporation and
The First National Bank of Chicago.
4.3 Form of First Supplemental Indenture, between The AES Corporation and
the First National Bank of Chicago.
4.4 Form of Guarantee Agreement, dated March ___, 1997 between
The AES Corporation and The First National Bank of Chicago.
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EXHIBIT 4.1
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AMENDED AND RESTATED DECLARATION OF TRUST
OF
AES TRUST I
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Dated as of March __, 1997
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TABLE OF CONTENTS(1)
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PAGE
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ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.................................2
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act; Application............8
SECTION 2.02. Lists of Holders of Preferred Securities....9
SECTION 2.03. Reports by the Property Trustee.............9
SECTION 2.04. Periodic Reports to Property Trustee........9
SECTION 2.05. Evidence of Compliance with Conditions
Precedent ................................9
SECTION 2.06. Events of Default; Waiver..................10
SECTION 2.07. Disclosure of Information..................12
ARTICLE 3
ORGANIZATION
SECTION 3.01. Name.......................................12
SECTION 3.02. Office.....................................12
SECTION 3.03. Issuance of the Trust Securities...........12
SECTION 3.04. Purchase of Debentures.....................13
SECTION 3.05. Purpose....................................13
SECTION 3.06. Authority..................................14
SECTION 3.07. Title to Property of the Trust.............14
SECTION 3.08. Powers and Duties of the Regular Trustees..14
SECTION 3.09. Prohibition of Actions by Trust and
Trustees ................................17
SECTION 3.10. Powers and Duties of the Property Trustee..18
SECTION 3.11. Delaware Trustee...........................21
SECTION 3.12. Certain Rights and Duties of the Property
Trustee ..................................21
SECTION 3.13. Registration Statement and Related
Matters..................................24
SECTION 3.14. Filing of Amendments to Certificate
of Trust ................................25
SECTION 3.15. Execution of Documents by Regular
Trustees ...............................25
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1) This Table of Contents does not constitute part of the Amended and Restated
Declaration of Trust and should not have any bearing upon the interpretation of
any of its terms or provisions.
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PAGE
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SECTION 3.16. Trustees Not Responsible for Recitals
or Issuance of Securities................25
SECTION 3.17. Duration of Trust..........................26
ARTICLE 4
SPONSOR
SECTION 4.01. Purchase of Common Securities by Sponsor...26
SECTION 4.02. Expenses...................................26
ARTICLE 5
TRUSTEES
SECTION 5.01. Number of Trustees; Qualifications.........27
SECTION 5.02. Appointment, Removal and Resignation
of Trustees .............................29
SECTION 5.03. Vacancies among Trustees...................31
SECTION 5.04. Effect of Vacancies........................31
SECTION 5.05. Meetings...................................31
SECTION 5.06. Delegation of Power........................32
ARTICLE 6
DISTRIBUTIONS
SECTION 6.01. Distributions..............................32
ARTICLE 7
ISSUANCE OF SECURITIES
SECTION 7.01. General Provisions Regarding Securities....32
SECTION 7.02. Conversion Agent...........................34
ARTICLE 8
TERMINATION OF TRUST
SECTION 8.01. Termination of Trust.......................35
ARTICLE 9
TRANSFER OF INTERESTS
SECTION 9.01. Transfer of Securities.....................35
SECTION 9.02. Transfer of Certificates...................36
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PAGE
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SECTION 9.03. Deemed Security Holders....................36
SECTION 9.04. Book Entry Interests.......................37
SECTION 9.05. Notices to Holders of Certificates.........38
SECTION 9.06. Appointment of Successor Clearing Agency...38
SECTION 9.07. Definitive Preferred Securities
Certificates ............................38
SECTION 9.08. Mutilated, Destroyed, Lost or Stolen
Certificates ............................38
ARTICLE 10
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 10.01. Exculpation...............................39
SECTION 10.02. Indemnification...........................39
SECTION 10.03. Outside Business..........................40
ARTICLE 11
ACCOUNTING
SECTION 11.01. Fiscal Year...............................41
SECTION 11.02. Certain Accounting Matters................41
SECTION 11.03. Banking...................................42
SECTION 11.04. Withholding...............................42
ARTICLE 12
AMENDMENTS AND MEETINGS
SECTION 12.01. Amendments................................42
SECTION 12.02. Meetings of the Holders of Securities;
Action by Written Consent...............43
ARTICLE 13
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.01. Representations and Warranties of
Property Trustee .......................45
ARTICLE 14
MISCELLANEOUS
SECTION 14.01. Notices...................................46
SECTION 14.02. Undertaking for Costs.....................47
SECTION 14.03. Governing Law.............................48
SECTION 14.04. Headings..................................48
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PAGE
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SECTION 14.05. Partial Enforceability....................48
SECTION 14.06. Counterparts..............................48
SECTION 14.07. Intention of the Parties..................48
SECTION 14.08. Successors and Assigns....................48
SIGNATURES AND SEALS
EXHIBIT A: CERTIFICATE OF TRUST
EXHIBIT B: TERMS OF THE PREFERRED SECURITIES
EXHIBIT C: TERMS OF THE COMMON SECURITIES
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
AES TRUST I
March __, 1997
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of March __, 1997 by the undersigned trustees (together with all
other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), The AES
Corporation, a Delaware corporation, as trust sponsor ("AES" or the "Sponsor"),
and by the holders, from time to time, of undivided beneficial interests in the
assets of the Trust to be issued pursuant to this Declaration.
WHEREAS, the Sponsor and the Trustees entered into a Declaration of Trust
dated as of November 1, 1996 (the "Original Declaration") in order to establish
a statutory business trust (the "Trust") under the Business Trust Act (as
hereinafter defined);
WHEREAS, the Restated Certificate of Trust (the "Restated Certificate of
Trust") of the Trust was filed with the office of the Secretary of State of
the State of Delaware on December 5, 1996;
WHEREAS, the Trustees and the Sponsor desire to continue the Trust
pursuant to the Business Trust Act for the purpose of, as described more fully
in Sections 3.03 and 3.04 hereof, (i) issuing and selling Preferred Securities
(as defined herein) representing preferred undivided beneficial interests in the
assets of the Trust for cash and investing the proceeds thereof in Debentures
(as hereinafter defined) of AES issued under the Indenture (as hereinafter
defined) to be held as assets of the Trust and (ii) issuing and selling Common
Securities (as defined herein) representing common undivided beneficial
interests in the assets of the Trust to AES in exchange for cash and investing
the proceeds thereof in additional Debentures issued under the Indenture to be
held as assets of the Trust; and
NOW, THEREFORE, it being the intention of the parties hereto that the
Trust constitute a business trust under the Business Trust Act, that the
Original Declaration be amended and restated in its entirety as provided herein
and that this Declaration constitute the governing instrument of such business
trust, the Trustees declare that all assets referred to in clauses (i) and (ii)
of the previous Whereas clause purchased by the Trust will be held in trust for
the benefit of the
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Holders (as defined herein) from time to time, of the Certificates (as defined
herein) representing undivided beneficial interests in the assets of the Trust
issued hereunder, subject to the provisions of this Declaration.
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.01;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Amended and Restated Declaration of Trust (including Exhibits A, B and C hereto
(the "Exhibits")) as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Exhibits are to Articles and Sections of and Exhibits to this Declaration unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"Book Entry Interest" means a beneficial interest in a Global Certificate
registered in the name of a Clearing Agency or a nominee thereof, ownership and
transfers of which shall be maintained and made through book entries by such
Clearing Agency as described in Section 9.04.
"Business Day" means any day other than a Saturday, Sunday or any other
day on which banking institutions in the City of New York, in the State of New
York are authorized or required by applicable law to close.
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"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code ss. 3801 et seq., as it may be amended from time to time.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Certificate of Trust" has the meaning set forth in the second Whereas
clause above.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depository for the
Preferred Securities and in whose name or in the name of a nominee of that
organization, shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the Closing Date as specified in the Underwriting
Agreement, which date is also the date of execution and delivery of this
Declaration.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation. A reference to a specific section ((Sec.))
of the Code refers not only to such specific section but also to any
corresponding provision of any federal tax statute enacted after the date of
this Declaration, as such specific section or corresponding provision is in
effect on the date of application of the provisions of this Declaration
containing such reference.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.01(b).
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Annex I to Exhibit C.
"Common Stock" means the common stock of AES, par value $.01 per share.
"Conversion Agent" has the meaning specified in Section 7.02.
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"Covered Person" means (i) any officer, director, shareholder, partner,
member, representative, employee or agent of the Trust or its Affiliates, (ii)
any officer, director, shareholder, employees, representatives or agents of AES
or its Affiliates and (iii) the Holders from time to time of the Securities.
"Debenture Trustee" means The First National Bank of Chicago, as trustee
under the Indenture until a successor is appointed thereunder and thereafter
means such successor trustee.
"Debentures" means the series of Junior Subordinated Convertible
Debentures issued by AES under the Indenture to the Property Trustee and
entitled the "____% Junior Subordinated Debentures due 2027".
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.04.
"Delaware Trustee" has the meaning set forth in Section 5.01(a)(3).
"Depositary Agreement" means the agreement among the Trust, the Property
Trustee and DTC dated as of the Closing Date, as the same may be amended or
supplemented from time to time.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.01.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Indenture Event
of Default has occurred and is continuing in respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time or any successor legislation.
"Fiscal Year" has the meaning specified in Section 11.01.
"Global Certificate" has the meaning set forth in Section 9.04.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means any Trustee, any Affiliate of any Trustee, any
Conversion Agent, any Paying Agent, any officers, directors, shareholders,
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members, partners, employees, representatives or agents of any Trustee,
Conversion Agent or Paying Agent, or any employee or agent of the Trust or its
Affiliates.
"Indenture" means the Junior Subordinated Indenture dated as of March __,
1997 between AES and the Debenture Trustee as supplemented by the First
Supplemental Indenture thereto dated as of March __, 1997, pursuant to which the
Debentures are to be issued.
"Indenture Event of Default" means an event or condition defined as an
"Event of Default" with respect to the Debentures under Section 6.01(a) of the
Indenture has occurred and is continuing.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time or any successor legislation.
"Legal Action" has the meaning specified in Section 3.08(g).
"Liquidation Distribution" has the meaning set forth in Exhibits B and C
hereto establishing the terms of the Securities.
"Majority in liquidation amount of the Securities" means, except as
otherwise required by the Trust Indenture Act and except as provided in the
penultimate paragraph of paragraph 6 of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holder(s) of outstanding Preferred Securities or Common Securities
voting separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined)
represents more than 50% of the liquidation amount of all outstanding Securities
of such class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Exhibits B and C hereto.
"Option Closing Date" means the Option Closing Date as specified in the
Underwriting Agreement.
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"Original Declaration" has the meaning set forth in the first WHEREAS
clause above.
"Paying Agent" has the meaning specified in Section 3.10(i).
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee" means the Guarantee Agreement dated as of March __,
1997 of AES in respect of the Preferred Securities.
"Preferred Security" has the meaning specified in Section 7.01(b).
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"Preferred Security Certificate" means a definitive certificate in fully
registered form representing a Preferred Security substantially in the form of
Annex I to Exhibit B.
"Property Trustee" means the Trustee meeting the eligibility requirements
set forth in Section 5.01(c) and having the duties set forth for the Property
Trustee herein.
"Property Account" has the meaning specified in Section 3.10(c)(i).
"Quorum" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both such Regular Trustees.
"Regular Trustee" means any Trustee other than the Property Trustee and
the Delaware Trustee.
"Related Party" means any direct or indirect wholly owned subsidiary of
AES or any other Person which owns, directly or indirectly, 100% of the
outstanding voting securities of AES.
"Resignation Request" has the meaning specified in Section 5.02(d).
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"Responsible Officer" means, with respect to the Property Trustee, the
chairman of the board of directors, the president, any vice-president, any
assistant vice-president, the secretary, any assistant secretary, the treasurer,
any assistant treasurer, any trust officer or assistant trust officer or any
other officer of the Property Trustee customarily performing functions similar
to those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act or any
successor rule thereunder.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time to
time or any successor legislation.
"Special Event" has the meaning set forth in the terms of the Securities
as set forth in Exhibits B and C hereto.
"Sponsor" or "AES" means The AES Corporation, a Delaware corporation, or
any successor entity in a merger, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning specified in Section
5.02(b)(ii).
"Successor Property Trustee" means a successor Trustee possessing the
qualifications to act as Property Trustee under Section 5.01(c).
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"10% in liquidation amount of the Securities" means, except as otherwise
required by the Trust Indenture Act and except as provided in the penultimate
paragraph of paragraph 6 of Exhibit B hereto, Holder(s) of outstanding
Securities voting together as a single class or, as the context may require,
Holder(s) of outstanding Preferred Securities or Common Securities, voting
separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined)
represents 10% or more of the liquidation amount of all outstanding Securities
of such class.
"Treasury Regulations" means the income tax regulations including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Underwriting Agreement" means the Underwriting Agreement dated as of
March __, 1997 among the Trust, the Sponsor, J.P. Morgan Securities Inc.,
Donaldson, Lufkin & Jenrette Securities Corporation, Goldman, Sachs & Co.,
Morgan Stanley & Co. Incorporated, Salomon Brothers Inc and Unterberg Harris.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions;
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(b) if and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by ss.ss.310 to 317, inclusive,
of the Trust Indenture Act, such imposed duties shall control;
(c) the Property Trustee, to the extent permitted by applicable law and/or
the rules and regulations of the Commission, shall be the only Trustee which is
a trustee for the purposes of the Trust Indenture Act; and
(d) the application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.02. Lists of Holders of Preferred Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Property Trustee with such information as is required under
ss. 312(a) of the Trust Indenture Act at the times and in the manner provided in
ss. 312(a); and
(b) the Property Trustee shall comply with its obligations under ss.ss.
310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Property Trustee. Within 60 days after May 15
of each year, the Property Trustee shall provide to the Holders of the
Securities such reports as are required by ss. 313 of the Trust Indenture Act,
if any, in the form, in the manner and at the times provided by ss. 313 of the
Trust Indenture Act. The Property Trustee shall also comply with the
requirements of ss. 313(d) of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to Property Trustee. Each of the Sponsor
and the Regular Trustees on behalf of the Trust shall provide to the Property
Trustee, the Commission and the Holders of the Securities, as applicable, such
documents, reports and information as required by ss. 314(a)(1)-(3) (if any) of
the Trust Indenture Act and the compliance certificates required by ss.
314(a)(4) and (c) of the Trust Indenture Act, any such certificates to be
provided in the form, in the manner and at the times required by ss. 314(a)(4)
and (c) of the Trust Indenture Act (provided that any certificate to be provided
pursuant to ss. 314(a)(4) of the Trust Indenture Act shall be provided within
120 days of the end of each Fiscal Year).
SECTION 2.05. Evidence of Compliance with Conditions Precedent. Each of
the Sponsor and the Regular Trustees on behalf of the Trust shall provide to the
Property Trustee such evidence of compliance with any conditions precedent, if
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any, provided for in this Declaration which relate to any of the matters set
forth in ss. 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given pursuant to ss. 314(c) shall comply with ss. 314(e) of the
Trust Indenture Act.
SECTION 2.06. Events of Default; Waiver. (a) Subject to Section 2.06(c),
Holders of Preferred Securities may, by vote of at least a Majority in
liquidation amount of the Preferred Securities (A) in accordance with the terms
of the Preferred Securities, direct the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee, or (B) on behalf of the
Holders of all Preferred Securities, waive any past Event of Default in respect
of the Preferred Securities and its consequences; provided that if the Event of
Default arises out of an Indenture Event of Default:
(i) which is not waivable under the Indenture, the Event of Default
under this Declaration shall also be not waivable; or
(ii) which requires the consent or vote of (1) holders of Debentures
representing a specified percentage greater than a majority in principal
amount of the Debentures, or (2) each holder of Debentures, the Event of
Default under this Declaration may only be waived by, in the case of
clause (1) above, the vote of Holders of Preferred Securities representing
such specified percentage of the aggregate liquidation amount of the
Preferred Securities or, in the case of clause (2) above, each Holder of
Preferred Securities.
Upon such waiver, any such default shall cease to exist, and any Event of
Default with respect to the Preferred Securities arising therefrom shall be
deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Preferred Securities or impair any right consequent thereon.
(b) Subject to Section 2.06(c), Holders of Common Securities may by vote of
at least a Majority in liquidation amount of the Common Securities, (A) in
accordance with the terms of the Common Securities, direct the time, method and
place of conducting any proceeding for any remedy available to the Property
Trustee or exercising any trust or power conferred upon the Property Trustee or
(B) on behalf of the Holders of all of the Common Securities, waive any past
Event of Default with respect to the Common Securities and its consequences,
provided that, if the Event of Default arises out of an Indenture Event of
Default:
(i) which is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event
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of Default under the Declaration as provided below, the Event of Default
under this Declaration shall also not be waivable; or
(ii) which requires the consent or vote of (1) holders of Debentures
representing a specified percentage greater than a majority in principal
amount of the Debentures or (2) each holder of Debentures, except where
the holders of the Common Securities are deemed to have waived such Event
of Default under this Declaration as provided below, the Event of Default
under this Declaration may only be waived by, in the case of clause (1)
above, the vote of Holders of Common Securities representing such
specified percentage of the aggregate liquidation amount of the Common
Securities or, in the case of clause (2) above, each holder of Common
Securities; and
provided, further, that each Holder of Common Securities will be deemed to have
waived any Event of Default with respect to the Common Securities and its
consequences until all Events of Default with respect to the Preferred
Securities have been cured, waived by the Holders of Preferred Securities as
provided in this Declaration or otherwise eliminated and until all Events of
Default with respect to the Preferred Securities have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of this Declaration or the Securities. In the event
that any Event of Default with respect to the Preferred Securities is waived by
the Holders of Preferred Securities as provided in this Declaration, the Holders
of Common Securities agree that such waiver shall also constitute the waiver of
such Event of Default with respect to the Common Securities for all purposes
under this Declaration without any further act, vote or consent of the Holders
of the Common Securities. Subject to the foregoing provisions of this Section
2.06(b), upon such waiver, any such default shall cease to exist and any Event
of Default with respect to the Common Securities arising therefrom shall be
deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Common Securities or impair any right consequent thereon.
(c) The right of any Holder of Securities to receive payment of
Distributions on the Securities in accordance with this Declaration and the
terms of the Securities set forth in Exhibits B and C on or after the respective
payment dates therefor, or to institute suit for the enforcement of any such
payment on or after such payment dates, shall not be impaired without the
consent of such Holder.
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(d) As provided in the terms of the Securities set forth in Exhibits B and
C hereto, a waiver of an Indenture Event of Default by the Property Trustee at
the written direction of the Holders of the Preferred Securities constitutes a
waiver of the corresponding Event of Default under this Declaration in respect
of the Securities.
SECTION 2.07. Disclosure of Information. The disclosure of information as
to the names and addresses of the Holders of the Securities in accordance with
ss. 312 of the Trust Indenture Act, regardless of the source from which such
information was derived, shall not be deemed to be a violation of any existing
law, or any law hereafter enacted which does not specifically refer to ss. 312
of the Trust Indenture Act, nor shall the Property Trustee be held accountable
by reason of mailing any material pursuant to a request made under ss. 312(b) of
the Trust Indenture Act.
ARTICLE 3
ORGANIZATION
SECTION 3.01. Name. The Trust continued by this Declaration is named "AES
Trust I" as such name may be modified from time to time by the Regular Trustees
following written notice to the Holders of Securities. The Trust's activities
may be conducted under the name of the Trust or any other name deemed advisable
by the Regular Trustees.
SECTION 3.02. Office. The address of the principal office of the Trust is
c/o The AES Corporation, 1001 North 19th Street, Arlington, Virginia 22209. Upon
ten days' written notice to the Holders, the Regular Trustees may change the
location of the Trust's principal office. The name of the registered agent and
office of the Trust in the State of Delaware is The Corporation Trust Company,
1209 Orange Street, Wilmington, Delaware 19801. At any time, the Regular
Trustees may designate another registered agent and/or registered office.
SECTION 3.03. Issuance of the Trust Securities. On March __, 1997 the
Sponsor, on behalf of the Trust and pursuant to the Original Declaration,
executed and delivered the Underwriting Agreement. On the Closing Date and
contemporaneously with the execution and delivery of this Declaration, the
Regular Trustees, on behalf of the Trust, shall execute and deliver to (i) the
underwriters named in the Underwriting Agreement, a Global Certificate,
registered in the name of the nominee of the initial Clearing Agency as
specified in Section 9.04, in an aggregate amount of ___________ Preferred
Securities having an aggregate liquidation amount of $__________, against
receipt of the aggregate
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purchase price of such Preferred Securities of $___________, and (ii) the
Sponsor, Common Securities Certificates, registered in the name of the Sponsor,
in an aggregate amount of ________ Common Securities having an aggregate
liquidation amount of $____________, against receipt of the aggregate purchase
price of such Common Securities of $___________. In the event and to the extent
the overallotment option granted by the Trust pursuant to the Underwriting
Agreement is exercised by such underwriters, on the Option Closing Date the
Regular Trustees, on behalf of the Trust, shall execute and deliver to (i) such
underwriters a Global Certificate, registered in the name of the nominee of the
initial Clearing Agency as specified in Section 9.04, in an aggregate amount of
up to ___________ Preferred Securities having an aggregate liquidation amount of
up to $___________, against receipt of the aggregate purchase price of such
Preferred Securities of up to $____________, and (ii) the Sponsor, Common
Security Certificates, registered in the name of the Sponsor, in an aggregate
amount of __________ Common Securities having an aggregate liquidation of
$__________, against receipt of the aggregate purchase price of such Common
Securities of up to $__________.
SECTION 3.04. Purchase of Debentures. On the Closing Date and
contemporaneously with the execution and delivery of this Declaration, the
Regular Trustees, on behalf of the Trust, shall purchase from the Sponsor with
the proceeds received by the Trust from the sale of the Securities on such date
pursuant to Section 3.03, at a purchase price of 100% of the principal amount
thereof, Debentures, registered in the name of the Property Trustee and having
an aggregate principal amount equal to $___________, and, in satisfaction of the
purchase price for such Debentures, the Regular Trustee, on behalf of the Trust,
shall deliver or cause to be delivered to the Sponsor the sum of $___________.
In the event the overallotment option granted by the Trust with respect to the
Preferred Securities pursuant to the Underwriting Agreement is exercised by the
underwriters named therein, on the Option Closing Date the Regular Trustees, on
behalf of the Trust, shall purchase from the Sponsor with the proceeds received
by the Trust from the sale of the Preferred Securities on such date pursuant to
Section 3.03, at a purchase price of 100% of the principal amount thereof,
additional Debentures, registered in the name of the Property Trustee and having
an aggregate principal amount of up to $__________, and, in satisfaction of the
purchase price for such Debentures, the Regular Trustees, on behalf of the
Trust, shall deliver or cause to be delivered to the Sponsor an amount equal to
the aggregate principal amount of the Debentures being purchased.
SECTION 3.05. Purpose. The exclusive purposes and functions of the Trust
are: (a)(i) to issue and sell Preferred Securities for cash and use the proceeds
of such sales to acquire from AES Debentures issued under the Indenture having
an aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities so issued and sold; (ii) to enter into such agreements and
arrangements as may be necessary in connection with the sale of Preferred
Securities to the initial purchasers thereof (including the Underwriting
Agreement) and to take all action, and exercise such discretion, as may be
necessary or
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desirable in connection therewith and to file such registration statements or
make such other filings under the Securities Act, the Exchange Act or state
securities or "Blue Sky" laws as may be necessary or desirable in connection
therewith and the issuance of the Preferred Securities; and (iii) to issue and
sell Common Securities to AES for cash and use the proceeds of such sale to
purchase as trust assets an equal aggregate principal amount of Debentures
issued under the Indenture; and (b) except as otherwise limited herein, to
engage in only those other activities necessary, convenient or incidental
thereto. The Trust shall not borrow money, issue debt or reinvest proceeds
derived from investments, pledge any of its assets or at any time while the
Securities are outstanding, otherwise undertake (or permit to be undertaken) any
activity that would result in or cause the Trust to be treated as anything other
than a grantor trust for United States federal income tax purposes.
SECTION 3.06. Authority. Subject to the limitations provided in this
Declaration and to the specific duties of the Property Trustee, the Regular
Trustees shall have exclusive and complete authority to carry out the purposes
of the Trust. An action taken by the Regular Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust and an action
taken by the Property Trustee in accordance with its powers shall constitute the
act of and serve to bind the Trust. In dealing with the Trustees acting on
behalf of the Trust, no Person shall be required to inquire into the authority
of the Trustees to bind the Trust. Persons dealing with the Trust are entitled
to rely conclusively on the power and authority of the Trustees as set forth in
this Declaration.
SECTION 3.07. Title to Property of the Trust. Except as provided in
Section 3.10 with respect to the Debentures and the Property Account or unless
otherwise provided in this Declaration, legal title to all assets of the Trust
shall be vested in the Trust. The Holders shall not have legal title to any part
of the assets of the Trust, but shall have an individual undivided beneficial
interest in the assets of the Trust.
SECTION 3.08. Powers and Duties of the Regular Trustees. The Regular
Trustees shall have the exclusive power, authority and duty to cause the Trust,
and shall cause the Trust, to engage in the following activities:
(a) to issue Preferred Securities and Common Securities, in each case in
accordance with this Declaration; provided, however, that the Trust may issue no
more than one series of Preferred Securities and no more than one series of
Common Securities, and, provided further, that there shall be no interests in
the Trust other than the Securities and the issuance of Securities shall be
limited to (x) a one-time, simultaneous issuance of both Preferred Securities
and Common Securities on the Closing Date and (y) any subsequent issuance of
Preferred
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Securities on the Option Closing Date pursuant to an exercise of the
over-allotment option granted to underwriters in the Underwriting Agreement;
(b) in connection with the issuance of the Preferred Securities, at the
direction of the Sponsor, to effect or cause to be effected the filings, and to
execute or cause to be executed, the documents, set forth in Section 3.13 and to
execute, deliver and perform on behalf of the Trust the Depositary Agreement;
(c) to acquire as trust assets Debentures with the proceeds of the sale of
the Preferred Securities and Common Securities; provided, however, that the
Regular Trustees shall cause legal title to all of the Debentures to be vested
in, and the Debentures to be held of record in the name of, the Property Trustee
for the benefit of the Holders of the Preferred Securities and the Common
Securities;
(d) to cause the Trust to enter into the Underwriting Agreement and such
other agreements and arrangements as may be necessary or desirable in connection
with the sale of Preferred Securities to the initial purchasers thereof and the
consummation thereof, and to take all action, and exercise all discretion, as
may be necessary or desirable in connection with the consummation thereof;
(e) to give the Sponsor and the Property Trustee prompt written notice of
the occurrence of a Special Event; provided, that the Regular Trustees shall
consult with the Sponsor and the Property Trustee before taking or refraining to
take any Ministerial Action in relation to a Special Event;
(f) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including for the purposes
of Section 316(c) of the Trust Indenture Act and with respect to Distributions,
voting rights, redemptions, and exchanges, and to issue relevant notices to
Holders of the Preferred Securities and Common Securities as to such actions and
applicable record dates;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.10(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
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(j) to give the certificate to the Property Trustee required by ss.
314(a)(4) of the Trust Indenture Act, which certificate may be executed by any
Regular Trustee;
(k) to incur expenses which are necessary or incidental to carrying out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and transfer
agent for the Securities, the Regular Trustees hereby initially appointing the
Property Trustee for such purposes;
(m) to take all actions and perform such duties as may be required of the
Regular Trustee pursuant to the terms of the Securities set forth in Exhibits B
and C hereto;
(n) to execute all documents or instruments, perform all duties and powers
and do all things for and on behalf of the Trust in all matters necessary or
incidental to the foregoing;
(o) to take all action which may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Securities or
to enable the Trust to effect the purposes for which the Trust has been created;
(p) to take all action, not inconsistent with this Declaration or with
applicable law, which the Regular Trustees determine in their discretion to be
reasonable and necessary or desirable in carrying out the activities of the
Trust as set out in this Section 3.08, in order that:
(i) the Trust will not be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) the Trust will not be classified for United States federal
income tax purposes as an association taxable as a corporation or a
partnership and will be treated as a grantor trust for United States
federal income tax purposes; and
(iii) the Trust will comply with any requirements imposed by any
taxing authority on holders of instruments treated as indebtedness for
United States federal income tax purposes;
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provided that such action does not adversely affect the interests of Holders;
(q) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
to be duly prepared and filed by the Regular Trustees, on behalf of the Trust;
and
(r) subject to the requirements of Rule 3a-7 and ss. 317(b) of the Trust
Indenture Act, to appoint one or more Paying Agents in addition to the Property
Trustee.
The Regular Trustees must exercise the powers set forth in this Section
3.08 in a manner which is consistent with the purposes and functions of the
Trust set out in Section 3.05 and the Regular Trustees shall not take any action
which is inconsistent with the purposes and functions of the Trust set forth in
Section 3.05.
Subject to this Section 3.08, the Regular Trustees shall have none of the
powers nor any of the authority of the Property Trustee set forth in Section
3.10.
SECTION 3.09. Prohibition of Actions by Trust and Trustees. The Trust
shall not, and the Trustees (including the Property Trustee) shall cause the
Trust not to, engage in any activity other than as required or authorized by
this Declaration. In particular, the Trust shall not and the Trustees (including
the Property Trustee) shall not:
(a) invest any proceeds received by the Trust from holding the Debentures
but shall promptly distribute all such proceeds to Holders of Securities
pursuant to the terms of this Declaration and of the Securities;
(b) acquire any assets other than as expressly provided herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans, other than loans represented by the Debentures;
(e) possess any power or otherwise act in such a way as to vary the Trust
assets or the terms of the Securities in any way whatsoever;
(f) issue any securities or other evidences of beneficial ownership of, or
beneficial interests in, the Trust other than the Securities;
(g) incur any indebtedness for borrowed money; or
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(h) (i) direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (ii) waive
any past default that is waivable under Section 6.06 of the Indenture, (iii)
exercise any right to rescind or annul any declaration that the principal of all
of the Debentures shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Debentures, where such
consent shall be required, unless in the case of this clause (h) the Property
Trustee shall have received an unqualified opinion of nationally recognized
independent tax counsel recognized as expert in such matters to the effect that
such action will not cause the Trust to be classified for United States federal
income tax purposes as an association taxable as a corporation or partnership
and that the Trust will continue to be classified as a grantor trust for United
States federal income tax purposes.
SECTION 3.10. Powers and Duties of the Property Trustee. (a) The legal
title to the Debentures shall be owned by and held of record in the name of the
Property Trustee in trust for the benefit of the Holders of the Securities. The
right, title and interest of the Property Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as Property Trustee
in accordance with Article 5. Such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and
delivered.
(b) The Property Trustee shall not transfer its right, title and interest
in the Debentures to the Regular Trustees or, if the Property Trustee does not
also act as the Delaware Trustee, the Delaware Trustee.
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing bank
account (the "Property Account") in the name of and under the exclusive
control of the Property Trustee on behalf of the Holders of the Securities
and on the receipt of payments of funds made in respect of the Debentures
held by the Property Trustee, deposit such funds into the Property Account
and, without any further acts of the Property Trustee or the Regular
Trustees, promptly make payments to the Holders of the Preferred
Securities and Common Securities from the Property Account in accordance
with Section 6.01. Funds in the Property Account shall be held uninvested,
and without liability for interest thereon, until disbursed in accordance
with this Declaration. The Property Account shall be an account which is
maintained with a banking institution whose long term unsecured
indebtedness is rated by a "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act, at least equal to (but in no event less than "A"
or
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the equivalent) the rating assigned to the Preferred Securities by a
nationally recognized statistical rating organization;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect promptly the redemption of the Preferred Securities
and the Common Securities to the extent the Debentures are redeemed or
mature;
(iii) upon notice of distribution issued by the Regular Trustees in
accordance with the terms of the Preferred Securities and the Common
Securities, engage in such ministerial activities as shall be necessary or
appropriate to effect promptly the distribution pursuant to terms of the
Securities of Debentures to Holders of Securities upon the occurrence of a
Special Event; and
(iv) have the legal power to exercise all of the rights, powers and
privileges of a holder of the Debentures under the Indenture and, if an
Event of Default occurs and is continuing, the Property Trustee, subject
to Section 2.06(b), shall for the benefit of the Holders of the
Securities, enforce its rights as holder of the Debentures under the
Indenture, subject to the rights of the Holders of the Preferred
Securities pursuant to the terms of this Declaration, the Business Trust
Act and the Trust Indenture Act.
(d) The Property Trustee shall take all actions and perform such duties as
may be specifically required of the Property Trustee pursuant to the terms of
the Securities set forth in Exhibits B and C hereto.
(e) The Property Trustee shall take any Legal Action which arises out of
or in connection with an Event of Default or the Property Trustee's duties and
obligations under this Declaration, the Business Trust Act or the Trust
Indenture Act; provided however, that the holders of a Majority in liquidation
amount of the Preferred Securities will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Property Trustee or to direct the exercise of any trust or power conferred upon
the Property Trustee under the Declaration, including the right to direct the
Property Trustee to exercise the remedies available to it as a holder of the
Debentures. If the Property Trustee fails to enforce its rights under the
Debentures, a Holder of Preferred Securities, to the extent permitted by law,
may institute a legal proceeding directly against AES to enforce the Property
Trustee's rights under the Debentures without first instituting any legal
proceeding against the Property Trustee or any other Person; provided further,
that, if an Event of Default has occurred and is continuing and such event is
attributed to the failure of the Sponsor to pay interest
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or principal on the Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date), then a
Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such Holder (a "Holder Direct Action") on or
after the respective due date specified in the Debentures. In connection with
such Holder Direct Action, the rights of the Holders of the Common Securities
will be subrogated to the rights of such Holder of Preferred Securities to the
extent of any payment made by the Sponsor to such Holders of Preferred
Securities in such Holder Direct Action. Except as provided in the preceding
sentences, the Holders of Preferred Securities will not be able to exercise
directly any remedy available to the Holders of the Debentures.
(f) All moneys deposited in the Property Account, and all Debentures held
by the Property Trustee for the benefit of the Holders of the Securities will
not be subject to any right, charge, security interest, lien or claim of any
kind in favor of, or for the benefit of the Property Trustee or its agents or
their creditors.
(g) The Property Trustee shall, within 90 days after the occurrence of a
default with respect to the Securities, transmit by mail, first class postage
prepaid, to the holders of the Securities, as their names and addresses appear
upon the register, notice of all defaults with respect to the Securities known
to the Property Trustee, unless such defaults shall have been cured before the
giving of such notice (the term "defaults" for the purposes of this Section
3.10(g) being hereby defined to be an Indenture Event of Default, not including
any periods of grace provided for in the Indenture and irrespective of the
giving of any notice provided therein); provided, that, except in the case of
default in the payment of the principal of (or premium, if any) or interest on
any of the Debentures, the Property Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee or
a trust committee of directors and/or Responsible Officers, of the Property
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of the Securities. The Property Trustee shall not be
deemed to have knowledge of any default, except (i) a default in the payment of
principal, premium or interest on the Debentures or (ii) any default as to which
the Property Trustee shall have received written notice or a Responsible Officer
charged with the administration of this Declaration shall have obtained written
notice.
(h) The Property Trustee shall continue to serve as a Trustee until
either:
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(i) the Trust has been completely liquidated and the proceeds
thereof distributed to the Holders of Securities pursuant to the terms of
the Securities; or
(ii) a Successor Property Trustee has been appointed and accepted
that appointment in accordance with Article 5.
(i) The Property Trustee shall act as paying agent in respect of the
Common Securities and the Preferred Securities and, subject to Section 3.08(r),
may authorize one or more Persons (each, a "Paying Agent") to pay Distributions,
redemption payments or liquidation payments on behalf of the Trust with respect
to the Preferred Securities. Any such Paying Agent shall comply with ss. 317(b)
of the Trust Indenture Act. Any Paying Agent may be removed by the Property
Trustee, after consultation with the Regular Trustees, at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any time
by the Property Trustee, subject to Section 3.08(r).
(j) The Property Trustee shall give prompt written notice to the Holders
of the Securities of any notice received by it from AES of its election to defer
payments of interest on the Debentures by extending the interest payment period
with respect thereto.
(k) Subject to this Section 3.10, the Property Trustee shall have none of
the powers or the authority of the Regular Trustees set forth in Section 3.08.
(l) The Property Trustee shall exercise the powers, duties and rights set
forth in this Section 3.10 and Section 3.12 in a manner which is consistent with
the purposes and functions of the Trust set out in Section 3.05, and the
Property Trustee shall not take any action which is inconsistent with the
purposes and functions of the Trust set forth in Section 3.05.
SECTION 3.11. Delaware Trustee. Notwithstanding any other provision of
this Declaration other than Section 5.01(a)(3), the Delaware Trustee shall not
be entitled to exercise any powers, nor shall the Delaware Trustee have any of
the duties and responsibilities of the Regular Trustees and the Property Trustee
described in this Declaration. Except as set forth in Section 5.01(a)(3), the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of ss. 3807 of the Business Trust Act. No implied
covenants or obligations shall be read into this Declaration against the
Delaware Trustee.
SECTION 3.12. Certain Rights and Duties of the Property Trustee. (a) The
Property Trustee, before the occurrence of an Event of Default and after the
curing of all Events of Default that may have occurred, shall undertake to
perform
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only such duties as are specifically set forth in this Declaration, and no
implied covenants shall be read into this Declaration against the Property
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.06), the Property Trustee shall exercise such of
the rights and powers vested in it by this Declaration, and use the same degree
of care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall
be determined solely by the express provisions of this Declaration,
and the Property Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Property Trustee;
and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Property
Trustee and conforming to the requirements of this Declaration; but
in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the
Property Trustee, the Property Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders as provided herein relating to the time,
method and place of conducting any proceeding for any remedy available to
the
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Property Trustee hereunder or under the Indenture, or exercising any trust
or power conferred upon the Property Trustee under this Declaration; and
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall have reasonable
ground for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or adequate
indemnity against such risk or liability is not reasonably assured to it.
(c) Subject to the provisions of Section 3.12(a) and (b):
(i) whenever in the administration of this Declaration, the Property
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Property
Trustee (unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part and, if the Trust is excluded from
the definition of Investment Company solely by means of Rule 3a-7, subject
to the requirements of Rule 3a-7, request and rely upon a certificate,
which shall comply with the provisions of ss. 314(e) of the Trust
Indenture Act, signed by any two of the Regular Trustees or by an
authorized officer of the Sponsor, as the case may be;
(ii) The Property Trustee (A) may consult with counsel (which may be
counsel to the Sponsor or any of its Affiliates and may include any of its
employees) selected by it in good faith and with due care and the written
advice or opinion of such counsel with respect to legal matters shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon and in accordance with such advice and opinion and (B) shall have
the right at any time to seek instructions concerning the administration
of this Declaration from any court of competent jurisdiction;
(iii) The Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Property Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney
appointed by it in good faith and with due care;
(iv) The Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Declaration at the
request or direction of any Holders, unless such Holders shall have
offered to the
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Property Trustee reasonable security and indemnity against the costs,
expenses (including attorneys' fees and expenses) and liabilities that
might be incurred by it in complying with such request or direction;
provided that nothing contained in this clause (iv) shall relieve the
Property Trustee of the obligation, upon the occurrence of an Event of
Default (which has not been cured or waived) to exercise such of the
rights and powers vested in it by this Declaration, and to use the same
degree of care and skill in this exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs; and
(v) Any action taken by the Property Trustee or its agents
hereunder shall bind the Holders of the Securities and the signature of
the Property Trustee or its agents alone shall be sufficient and effective
to perform any such action; and no third party shall be required to
inquire as to the authority of the Property Trustee to so act, or as to
its compliance with any of the terms and provisions of this Declaration,
both of which shall be conclusively evidenced by the Property Trustee's or
its agent's taking such action.
SECTION 3.13. Registration Statement and Related Matters. In accordance
with the Original Declaration, AES and the Trustees have authorized and
directed, and hereby confirm the authorization of, AES, as the sponsor of the
Trust, (i) to file with the Commission and execute, in each case on behalf of
the Trust, (a) the Registration Statement on Form S-3 (File No. 333-15487) (the
"1933 Act Registration Statement") including any amendments thereto and any
further pre-effective or post-effective amendments to such Registration
Statement, relating to the registration under the Securities Act of the
Preferred Securities of the Trust and (b) a Registration Statement on Form 8-A
or other appropriate form (the "1934 Act Registration Statement") (including all
pre-effective and post-effective amendments thereto) relating to the
registration of the Preferred Securities of the Trust under Section 12(b) of the
Exchange Act; (ii) to file with the New York Stock Exchange and execute on
behalf of the Trust a listing application and all other applications,
statements, certificates, agreements and other instruments as shall be necessary
or desirable to cause the Preferred Securities to be listed on the New York
Stock Exchange; (iii) to file and execute on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as shall be
necessary or desirable to register the Preferred Securities under the securities
or "Blue Sky" laws of such jurisdictions as AES on behalf of the Trust, may deem
necessary or desirable and (iv) to execute on behalf of the Trust the
Underwriting Agreement. In the event that any filing referred to in
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clauses (i)-(iii) above is required by the rules and regulations of the
Commission, the New York Stock Exchange or state securities or blue sky laws, to
be executed on behalf of the Trust by the Trustees, the Regular Trustees, in
their capacities as Trustees of the Trust, are hereby authorized and directed to
join in any such filing and to execute on behalf of the Trust any and all of the
foregoing, it being understood that the Property Trustee and the Delaware
Trustee, in their capacities as Trustees of the Trust, shall not be required to
join in any such filing or execute on behalf of the Trust any such document
unless required by the rules and regulations of the Commission, the New York
Stock Exchange or state securities or blue sky laws. In connection with all of
the foregoing, AES and each Trustee, solely in its capacity as Trustee of the
Trust, have constituted and appointed, and hereby confirm the appointment of,
Barry J. Sharp, William R. Luraschi and Willard Hoagland and each of them, as
his, her or its, as the case may be, true and lawful attorneys-in-fact, and
agents, with full power of substitution and resubstitution, for AES or such
Trustee or in AES's or such Trustee's name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to the 1933 Act Registration Statement and the 1934 Act Registration Statement
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Commission, granting unto said attorneys-in-fact
and agents full power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection therewith, as fully to
all intents and purposes as AES or such Trustee might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents or
any of them, or their or his or her substitute or substitutes, shall do or cause
to be done by virtue hereof.
SECTION 3.14. Filing of Amendments to Certificate of Trust. The Restated
Certificate of Trust as filed with the Secretary of State of the State of
Delaware on December 5, 1996 is attached hereto as Exhibit A. On or after the
date of execution of this Declaration, the Trustees shall cause the filing with
the Secretary of State of the State of Delaware of such amendments to the
Certificate of Trust as the Trustees shall deem necessary or desirable.
SECTION 3.15. Execution of Documents by Regular Trustees. Unless otherwise
determined by the Regular Trustees and except as otherwise required by the
Business Trust Act with respect to the Certificate of Trust or otherwise, a
majority of, or if there are only two, both of, the Regular Trustees are
authorized to execute and deliver on behalf of the Trust any documents which the
Regular Trustees have the power and authority to execute or deliver pursuant to
this Declaration.
SECTION 3.16. Trustees Not Responsible for Recitals or Issuance of
Securities. The recitals contained in this Declaration and the Securities shall
be
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taken as the statements of the Sponsor and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.17. Duration of Trust. The Trust, absent termination pursuant to
the provisions of Article 8 hereof, shall have existence until ___________,
204_.
ARTICLE 4
SPONSOR
SECTION 4.01. Purchase of Common Securities by Sponsor. On the Closing
Date the Sponsor will purchase all of the Common Securities issued by the Trust
at the same time as the Preferred Securities to be issued on such date are
issued, such purchase to be in an amount equal to 3% of the total capital of the
Trust (including for this purpose the maximum amount of Preferred Securities, if
any, which may be issued on the Option Closing Date pursuant to the exercise of
the overallotment option set forth in the Underwriting Agreement).
SECTION 4.02. Expenses. (a) In connection with the purchase of the
Debentures by the Trust, the Sponsor, in its capacity as Sponsor and not as a
Holder, shall be responsible for and shall pay for all debts and obligations
(other than with respect to the Securities) and all costs and expenses of the
Trust (including, but not limited to, costs and expenses relating to the
organization of the Trust, the issuance of the Preferred Securities to initial
purchasers thereof, the fees and expenses (including reasonable counsel fees and
expenses) of the Trustees (including any amounts payable under Article 10), the
costs and expenses relating to the operation of the Trust, including without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses and
costs and expenses incurred in connection with the disposition of Trust assets).
(b) In connection with the purchase of the Debentures by the Trust, the
Sponsor, in its capacity as Sponsor and not as a Holder, will pay any and all
taxes (other than United States withholding taxes attributable to the Trust or
its assets) and all liabilities, costs and expenses with respect to such taxes
of the Trust.
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(c) The Sponsor's obligations under this Section 4.02 shall be for the
benefit of, and shall be enforceable by, any Person to whom any such debts,
obligations, costs, expenses and taxes are owed (a "Creditor") whether or not
such Creditor has received notice hereof. Any such Creditor may enforce the
Sponsor's obligations under this Section 4.02 directly against the Sponsor and
the Sponsor irrevocably waives any right or remedy to require that any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor. The Sponsor agrees to execute such additional agreements as
may be necessary or desirable in order to give full effect to the provisions of
this Section 4.02.
ARTICLE 5
TRUSTEES
SECTION 5.01. Number of Trustees; Qualifications. (a) The number of
Trustees initially shall be five (5). At any time (i) before the issuance of the
Securities, the Sponsor may, by written instrument, increase or decrease the
number of, and appoint, remove and replace the, Trustees, and (ii) after the
issuance of the Securities the number of Trustees may be increased or decreased
solely by, and Trustees may be appointed, removed or replaced solely by, vote of
Holders of Common Securities representing a Majority in liquidation amount of
the Common Securities voting as a class; provided that in any case:
(i) the number of Trustees shall be at least five (5) unless the
Trustee that acts as the Property Trustee also acts as the Delaware
Trustee, in which cases the number of Trustees shall be at least four (4);
(ii) at least a majority of the Trustees shall at all times be
officers, directors or employees of AES;
(iii) if required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be either a natural person who is a resident of
the State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware and otherwise is
permitted to act as a Trustee hereunder under the laws of the State of
Delaware, except that if the Property Trustee has its principal place of
business in the State of Delaware and otherwise is permitted to act as a
Trustee hereunder under the laws of the State of Delaware, then the
Property Trustee shall also be the Delaware Trustee and Section 3.09 shall
have no application; and
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(iv) there shall at all times be a Property Trustee hereunder which
shall satisfy the requirements of Section 5.01(c).
Each Trustee shall be either a natural person at least 21 years of age or a
legal entity which shall act through one or more duly appointed representatives.
(b) The initial Regular Trustees shall be:
William R. Luraschi
Willard Hoagland
Barry J. Sharp
c/o THE AES CORPORATION
1001 North 19th Street
Arlington, Virginia 22209
(c) There shall at all times be one Trustee which shall act as Property
Trustee. In order to act as Property Trustee hereunder, such Trustee shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation or national banking association organized and
doing business under the laws of the United States of America or any State
or Territory thereof or of the District of Columbia, or a corporation,
national banking association or Person permitted by the Commission to act
as an institutional trustee under the Trust Indenture Act, authorized
under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000, and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation or national banking association publishes
reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 5.01(c)(ii), the combined capital
and surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by reason of Rule 3a-7 and to the extent Rule 3a-7 requires
a trustee having certain qualifications to hold title to the "eligible
assets" (as defined in Rule 3a-7) of the Trust, the Property Trustee shall
possess those qualifications.
If at any time the Property Trustee shall cease to satisfy the
requirements of clauses (i)-(iii) above, the Property Trustee shall immediately
resign in the manner
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and with the effect set out in Section 5.02(d). If the Property Trustee has or
shall acquire any "conflicting interest" within the meaning of ss. 310(b) of the
Trust Indenture Act, the Property Trustee and the Holders of the Common
Securities (as if such Holders were the obligor referred to in ss. 310(b) of the
Trust Indenture Act) shall in all respects comply with the provisions of ss.
310(b) of the Trust Indenture Act. The Preferred Guarantee shall be deemed to be
specifically described in this Declaration for the purposes of clause (i) of the
first proviso contained in ss. 310(b) of the Trust Indenture Act.
The initial Trustee which shall serve as the Property Trustee is The First
National Bank of Chicago, a national banking association, whose address is as
set forth in Section 14.01(b).
(d) The initial Trustee which shall serve as the Delaware Trustee is First
Chicago Delaware Inc., a Delaware corporation, whose address is as set forth in
Section 14.01(c).
(e) Any action taken by Holders of Common Securities pursuant to this
Article 5 shall be taken at a meeting of Holders of Common Securities convened
for such purpose or by written consent as provided in Section 12.02.
(f) No amendment may be made to this Section 5.01 which would change any
rights with respect to the number, existence or appointment and removal of
Trustees, except with the consent of each Holder of Common Securities.
SECTION 5.02. Appointment, Removal and Resignation of Trustees. (a)
Subject to Section 5.02(b), Trustees may be appointed or removed without cause
at any time:
(i) until the issuance of the Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of the Securities by vote of the Holders of
a Majority in liquidation amount of the Common Securities voting as a
class.
(b) (i) The Trustee that acts as Property Trustee shall not be removed in
accordance with Section 5.02(a) until a Successor Property Trustee possessing
the qualifications to act as Property Trustee under Section 5.01(c) has been
appointed and has accepted such appointment by written instrument executed by
such Successor Property Trustee and delivered to the Regular Trustees, the
Sponsor and the Property Trustee being removed; and
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(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.02(a) until a successor Trustee possessing
the qualifications to act as Delaware Trustee under Section 5.1(a)(3) (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees, the Sponsor and the
Delaware Trustee being removed.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation.
(d) Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument (a "Resignation Request") in writing
signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) no such resignation of the Trustee that acts as the Property
Trustee shall be effective until:
(A) a Successor Property Trustee possessing the qualifications
to act as Property Trustee under Section 5.01(c) has been appointed
and has accepted such appointment by instrument executed by such
Successor Property Trustee and delivered to the Trust, the Sponsor
and the resigning Property Trustee; or
(B) if the Trust is excluded from the definition of an
Investment Company solely by reason of Rule 3a-7, until the assets
of the Trust have been completely liquidated and the proceeds
thereof distributed to the Holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(e) If no Successor Property Trustee or Successor Delaware Trustee shall
have been appointed and accepted appointment as provided in this Section 5.02
within 60 days after delivery to the Sponsor and the Trust of a Resignation
Request, the resigning Property Trustee or Delaware Trustee may petition any
court of competent jurisdiction for appointment of a Successor Property Trustee
or Successor Delaware Trustee. Such court may thereupon after such notice, if
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any, as it may deem proper and prescribe, appoint a Successor Property Trustee
or Successor Delaware Trustee, as the case may be.
SECTION 5.03. Vacancies among Trustees. If a Trustee ceases to hold office
for any reason and the number of Trustees is not reduced pursuant to Section
5.01 or if the number of Trustees is increased pursuant to Section 5.01, a
vacancy shall occur. A resolution certifying the existence of such vacancy by a
majority of the Regular Trustees shall be conclusive evidence of the existence
of such vacancy. The vacancy shall be filled with a Trustee appointed in
accordance with the requirements of this Article 5.
SECTION 5.04. Effect of Vacancies. The death, resignation, retirement,
removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to
perform the duties of a Trustee, or any one of them, shall not operate to annul
the Trust. Whenever a vacancy in the number of Regular Trustees shall occur
until such vacancy is filled as provided in this Article 5, the Regular Trustees
in office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 5.05. Meetings. Meetings of the Regular Trustees shall be held
from time to time upon the call of any Trustee. Regular meetings of the Regular
Trustees may be held at a time and place fixed by resolution of the Regular
Trustees. Notice of any in-person meeting of the Regular Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 48 hours before such meeting. Notice of
any telephonic meeting of the Regular Trustees or any committee thereof shall be
hand delivered or otherwise delivered in writing (including by facsimile, with a
hard copy by overnight courier) not less than 24 hours before such meeting.
Notices shall contain a brief statement of the time, place and anticipated
purposes of the meeting. The presence (whether in person or by telephone) of a
Regular Trustee at a meeting shall constitute a waiver of notice of such meeting
except where a Regular Trustee attends a meeting for the express purpose of
objecting to the transaction of any activity on the ground that the meeting has
not been lawfully called or convened. Unless provided otherwise in this
Declaration, any action of the Regular Trustees may be taken at a meeting by
vote of a majority of the Regular Trustees present (whether in person or by
telephone) and eligible to vote with respect to such matter; provided that a
Quorum is present, or without a meeting by the unanimous written consent of the
Regular Trustees.
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SECTION 5.06. Delegation of Power. (a) Any Regular Trustee may, by power
of attorney consistent with applicable law, delegate to any other natural person
over the age of 21 his or her power for the purpose of executing any
registration statement or amendment thereto or other document or schedule filed
with the Commission or making any other governmental filing (including, without
limitation to filings referred to in Section 3.13).
(b) The Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
ARTICLE 6
DISTRIBUTIONS
SECTION 6.01. Distributions. Holders shall receive periodic distributions,
redemption payments and liquidation distributions in accordance with the
applicable terms of the relevant Holder's Securities ("Distributions").
Distributions shall be made to the Holders of Preferred Securities and Common
Securities in accordance with the terms of the Securities as set forth in
Exhibits B and C hereto. If and to the extent that AES makes a payment of
interest (including Compounded Interest (as defined in the Indenture)), premium
and principal on the Debentures held by the Property Trustee (the amount of any
such payment being a "Payment Amount"), the Property Trustee shall and is
directed to promptly make a Distribution of the Payment Amount to Holders in
accordance with the terms of the Securities as set forth in Exhibits B and C
hereto.
ARTICLE 7
ISSUANCE OF SECURITIES
SECTION 7.01. General Provisions Regarding Securities. (a) The Regular
Trustees shall issue on behalf of the Trust securities in fully registered form
representing undivided beneficial interests in the assets of the Trust in
accordance with Section 7.01(b) and for the consideration specified in Section
3.03.
(b) The Regular Trustees shall issue on behalf of the Trust one class of
preferred securities representing undivided beneficial interests in the assets
of the
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Trust having such terms as are set forth in Exhibit B (the "Preferred
Securities") which terms are incorporated by reference in, and made a part of,
this Declaration as if specifically set forth herein, and one class of common
securities representing undivided beneficial interests in the assets of the
Trust having such terms as are set forth in Exhibit C (the "Common Securities")
which terms are incorporated by reference in, and made a part of, this
Declaration as if specifically set forth herein. The Trust shall have no
securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities.
(c) The Certificates shall be signed on behalf of the Trust by the Regular
Trustees (or if there are more than two Regular Trustees by any two of the
Regular Trustees). Such signatures may be the manual or facsimile signatures of
the present or any future Regular Trustee. Typographical and other minor errors
or defects in any such reproduction of any such signature shall not affect the
validity of any Certificate. In case any Regular Trustee of the Trust who shall
have signed any of the Certificates shall cease to be such Regular Trustee
before the Certificate so signed shall be delivered by the Trust, such
Certificate nevertheless may be delivered as though the person who signed such
Certificate had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons as, at the actual date of the
execution of such Certificate, shall be the Regular Trustees of the Trust,
although at the date of the execution and delivery of the Declaration any such
person was not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution thereof, and
may have such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem appropriate,
or as may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on which
Securities may be listed, or to conform to usage. Pending the preparation of
definitive Certificates, the Regular Trustees on behalf of the Trust may execute
temporary Certificates (printed, lithographed or typewritten), in substantially
the form of the definitive Certificates in lieu of which they are issued, but
with such omissions, insertions and variations as may be appropriate for
temporary Certificates, all as may be determined by the Regular Trustees. Each
temporary Certificate shall be executed by the Regular Trustees on behalf of the
Trust upon the same conditions and in substantially the same manner, and with
like effect, as definitive Certificates. Without unnecessary delay, the Regular
Trustees on behalf of the Trust will execute and furnish definitive Certificates
and thereupon any or all temporary Certificates may be surrendered to the
transfer agent and registrar in exchange therefor (without charge to the
Holders). Each Certificate whether in temporary or definitive form shall be
countersigned by the manual or facsimile signature of an authorized signatory of
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the Person acting as registrar and transfer agent for the Securities, which
shall initially be the Property Trustee.
(d) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(f) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by this Declaration.
(g) Upon issuance of the Securities as provided in this Declaration, the
Regular Trustees on behalf of the Trust shall return to AES the $10 constituting
initial trust assets as set forth in the Original Declaration.
SECTION 7.02. Conversion Agent. The Trust shall maintain an office or
agency where Preferred Securities may be presented for conversion ("Conversion
Agent"). The Trust may appoint the Conversion Agent and may appoint one or more
additional Conversion Agents in such other locations as it may determine. The
term "Conversion Agent" includes any additional Conversion Agent. The Trust may
change any Conversion Agent without prior notice to any Holders. If the Trust
fails to appoint or maintain another entity as Conversion Agent, the Property
Trustee will act as such. The Trust or any of its Affiliates may act as
Conversion Agent. The Trust shall act as Conversion Agent for the Common
Securities. The Conversion Agent shall be entitled to the rights and protections
extended to the Property Trustee when acting in such capacity.
The Property Trustee is hereby initially appointed as Conversion Agent for
the Preferred Securities.
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ARTICLE 8
TERMINATION OF TRUST
SECTION 8.01. Termination of Trust. This Declaration and the Trust shall
terminate and be of no further force or effect when:
(i) all of the Securities shall have been called for redemption and the
amounts necessary for redemption thereof shall have been paid to the Holders of
Securities in accordance with the terms of the Securities; or
(ii) all of the Debentures shall have been distributed to the Holders of
Securities in exchange for all of the Securities in accordance with the terms of
the Securities; or
(iii) upon the expiration of the term of the Trust as set forth in Section
3.17; or
(iv) upon the distribution of the Sponsor's common stock to all Securities
Holders upon conversion of all outstanding Preferred Securities.
and a certificate of cancellation is filed by the Trustees with the Secretary of
State of the State of Delaware. The Trustees shall so file such a certificate as
soon as practicable after the occurrence of an event referred to in this Section
8.01.
The provisions of Sections 3.12 and 4.02 and Article 10 shall survive the
termination of the Trust.
ARTICLE 9
TRANSFER OF INTERESTS
SECTION 9.01. Transfer of Securities. (a) Securities may only be
transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Declaration. Any transfer or purported transfer of any
Security not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article 9, Preferred Securities shall be freely
transferable.
(c) Subject to this Article 9, AES and any Related Party may only transfer
Common Securities to AES or a Related Party; provided that any such transfer
shall be subject to the condition that the transferor shall have obtained (1)
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either a ruling from the Internal Revenue Service or an unqualified written
opinion addressed to the Trust and delivered to the Trustees of nationally
recognized independent tax counsel experienced in such matters to the effect
that such transfer will not (i) cause the Trust to be treated as issuing a class
of interests in the Trust differing from the class of interests represented by
the Common Securities originally issued to AES, (ii) result in the Trust
acquiring or disposing of, or being deemed to have acquired or disposed of, an
asset, or (iii) result in or cause the Trust to be treated as anything other
than a grantor trust for United States federal income tax purposes and (2) an
unqualified written opinion addressed to the Trust and delivered to the Trustees
of a nationally recognized independent counsel experienced in such matters that
such transfer will not cause the Trust to be an Investment Company or controlled
by an Investment Company.
SECTION 9.02. Transfer of Certificates. The Regular Trustees shall provide
for the registration of Certificates and of transfers of Certificates, which
will be effected without charge but only upon payment (with such indemnity as
the Regular Trustees may require) in respect of any tax or other government
charges which may be imposed in relation to it. Upon surrender for registration
of transfer of any Certificate, the Regular Trustees shall cause one or more new
Certificates to be issued in the name of the designated transferee or
transferees. Every Certificate surrendered for registration of transfer shall be
accompanied by a written instrument of transfer in form satisfactory to the
Regular Trustees duly executed by the Holder or such Holder's attorney duly
authorized in writing. Each Certificate surrendered for registration of transfer
shall be canceled by the Regular Trustees. A transferee of a Certificate shall
be entitled to the rights and subject to the obligations of a Holder hereunder
upon the receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by this
Declaration.
SECTION 9.03. Deemed Security Holders. The Trustees may treat the Person
in whose name any Certificate shall be registered on the books and records of
the Trust as the sole holder of such Certificate and of the Securities
represented by such Certificate for purposes of receiving Distributions and for
all other purposes whatsoever and, accordingly, shall not be bound to recognize
any equitable or other claim to or interest in such Certificate or in the
Securities represented by such Certificate on the part of any Person, whether or
not the Trustees shall have actual or other notice thereof.
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SECTION 9.04. Book Entry Interests. Unless otherwise specified in the
terms of the Preferred Securities, the Preferred Securities Certificates, on
original issuance (including Preferred Securities, if any, issued on the Option
Closing Date pursuant to the exercise of the overallotment option set forth in
the Underwriting Agreement), will be issued in the form of one or more, fully
registered, global Preferred Security Certificates (each a "Global
Certificate"), to be delivered to DTC, the initial Clearing Agency, by, or on
behalf of, the Trust. Such Global Certificates shall initially be registered on
the books and records of the Trust in the name of Cede & Co., the nominee of
DTC, and no Preferred Security Beneficial Owner will receive a definitive
Preferred Security Certificate representing such Preferred Security Beneficial
Owner's interests in such Global Certificates, except as provided in Section
9.07. Unless and until definitive, fully registered Preferred Security
Certificates (the "Definitive Preferred Security Certificates") have been issued
to the Preferred Security Beneficial Owners pursuant to Section 9.07:
(i) the provisions of this Section 9.04 shall be in full force and effect;
(ii) (i) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificates and, except as set forth herein or in Rule
3a-7 with respect to the Property Trustee, shall have no obligation to the
Preferred Security Beneficial Owners; provided, that solely for the purposes of
determining whether the Holders of the requisite amount of Preferred Securities
have voted on any matter provided for in this Declaration, so long as definitive
Preferred Security Certificates have not been issued (pursuant to Section 9.07
hereof), the Trustees may conclusively rely on, and shall be protected in
relying on, any written instrument (including a proxy) delivered to the Trustees
by the Clearing Agency setting forth the Preferred Security Beneficial Owners'
votes or assigning the right to vote on any matter to any other Persons either
in whole or in part.
(iii) to the extent that the provisions of this Section 9.04 conflict with
any other provisions of this Declaration, the provisions of this Section 9.04
shall control; and
(iv) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants. DTC will
make book entry transfers among the Clearing Agency Participants and receive and
transmit payments of Distributions on the Global Certificates to such Clearing
Agency Participants.
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SECTION 9.05. Notices to Holders of Certificates. Whenever a notice or
other communication to the Holders is required to be given under this
Declaration, unless and until Definitive Preferred Security Certificates shall
have been issued pursuant to Section 9.07, the relevant Trustees shall give all
such notices and communications, specified herein to be given to Preferred
Securities Holders, to the Clearing Agency and, with respect to any Preferred
Security Certificate registered in the name of a Clearing Agency or the nominee
of a Clearing Agency, the Trustees shall, except as set forth herein or in Rule
3a-7 with respect to the Property Trustee, have no notice obligations to the
Preferred Security Beneficial Owners.
SECTION 9.06. Appointment of Successor Clearing Agency. If any Clearing
Agency elects to discontinue its services as securities depository with respect
to the Preferred Securities, the Regular Trustees may, in their sole discretion,
appoint a successor Clearing Agency with respect to the Preferred Securities.
SECTION 9.07. Definitive Preferred Securities Certificates. If (i) a
Clearing Agency elects to discontinue its services as securities depository with
respect to the Preferred Securities and a successor Clearing Agency is not
appointed within 90 days after such discontinuance pursuant to Section 9.06 or
(ii) the Regular Trustees elect after consultation with the Sponsor to terminate
the book entry system through the Clearing Agency with respect to the Preferred
Securities, then (x) Definitive Preferred Security Certificates shall be
prepared by the Regular Trustees on behalf of the Trust with respect to such
Preferred Securities and (y) upon surrender of the Global Certificates by the
Clearing Agency, accompanied by registration instructions, the Regular Trustees
shall cause definitive Preferred Security Certificates to be delivered to
Preferred Security Beneficial Owners in accordance with the instructions of the
Clearing Agency. Neither the Trustees nor the Trust shall be liable for any
delay in delivery of such instructions and each of them may conclusively rely on
and shall be protected in relying on, such instructions.
SECTION 9.08. Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificates should be surrendered to the Regular Trustees, or if
the Regular Trustees shall receive evidence to their satisfaction of the
destruction, loss or theft of any Certificate; and (b) there shall be delivered
to the Regular Trustees such security or indemnity as may be required by them to
keep each of them harmless, then in the absence of notice that such Certificate
shall have been acquired by a bona fide purchaser, any two Regular Trustees on
behalf of the Trust
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shall execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like denomination.
In connection with the issuance of any new Certificate under this Section 9.08,
the Regular Trustees may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Certificate issued pursuant to this section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
ARTICLE 10
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 10.01. Exculpation. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Trust or any Covered
Person for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of the
Trust and in a manner such Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders of
Securities, in their capacities as Holders, shall be entitled to the same
limitation of liability that is extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State of Delaware.
SECTION 10.02. Indemnification. (a) To the fullest extent permitted by
applicable law, the Sponsor shall indemnify and hold harmless each Indemnified
Person from and against any loss, damage or claim incurred by such Indemnified
39
<PAGE> 45
Person by reason of any act or omission performed or omitted by such Indemnified
Person in good faith on behalf of the Trust and in a manner such Indemnified
Person reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Declaration, except that no Indemnified Person shall
be entitled to be indemnified in respect of any loss, damage or claim incurred
by such Indemnified Person by reason of gross negligence (or, in the case of the
Property Trustee, negligence) or willful misconduct with respect to such acts or
omissions.
(b) To the fullest extent permitted by applicable law, expenses (including
legal fees) incurred by an Indemnified Person in defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the Sponsor
prior to the final disposition of such claim, demand, action, suit or proceeding
upon receipt by the Sponsor of an undertaking by or on behalf of the Indemnified
Person to repay such amount if it shall be determined that the Indemnified
Person is not entitled to be indemnified as authorized in Section 10.02(a).
(c) The provisions of this Section 10.02 shall survive the termination of
this Declaration.
SECTION 10.03. Outside Business. The Sponsor and any Trustee may engage in
or possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Trust, and the Trust and the Holders of Securities shall have no rights by
virtue of this Declaration in and to such independent ventures or the income or
profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. Neither the Sponsor nor any Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and the Sponsor or any Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor or may act as depository for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
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<PAGE> 46
ARTICLE 11
ACCOUNTING
SECTION 11.01. Fiscal Year. The fiscal year ("Fiscal Year") of the Trust
shall be the calendar year, or such other year as is required by the Code.
SECTION 11.02. Certain Accounting Matters. (a) At all times during the
existence of the Trust, the Regular Trustees shall keep, or cause to be kept,
full books of account, records and supporting documents, which shall reflect in
reasonable detail, each transaction of the Trust. The books of account shall be
maintained on the accrual method of accounting, in accordance with generally
accepted accounting principles, consistently applied. The Trust shall use the
accrual method of accounting for United States federal income tax purposes. The
books and records of the Trust, together with a copy of this Declaration and a
certified copy of the Certificate of Trust, or any amendment thereto, shall at
all times be maintained at the principal office of the Trust and shall be open
for inspection for any examination by any Holder or its duly authorized
representative for any purpose reasonably related to its interest in the Trust
during normal business hours.
(b) The Regular Trustees shall cause to be prepared and mailed to each
Holder of Securities, an annual United States federal income tax information
statement, on such form as is required by the Code, containing such information
with regard to the Securities held by each Holder as is required by the Code and
the Treasury Regulations. Notwithstanding any right under the Code to deliver
any such statement at a later date, the Regular Trustees shall endeavor to
deliver all such statements within 30 days after the end of each Fiscal Year of
the Trust.
(c) The Regular Trustees shall cause to be prepared and filed with the
appropriate taxing authority, an annual United States federal income tax return,
on such form as is required by the Code, and any other annual income tax returns
required to be filed by the Regular Trustees on behalf of the Trust with any
state or local taxing authority, such returns to be filed as soon as practicable
after the end of each Fiscal Year of the Trust.
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<PAGE> 47
SECTION 11.03. Banking. The Trust shall maintain one or more bank accounts
in the name and for the sole benefit of the Trust; provided, however, that all
payments of funds in respect of the Debentures held by the Property Trustee
shall be made directly to the Property Account and no other funds from the Trust
shall be deposited in the Property Account. The sole signatories for such
accounts shall be designated by the Regular Trustees; provided, however, that
the Property Trustee shall designate the sole signatories for the Property
Account.
SECTION 11.04. Withholding. The Trust and the Trustees shall comply with
all withholding requirements under United States federal, state and local law.
The Trust shall request, and the Holders shall provide to the Trust, such forms
or certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Trust shall file required forms
with applicable jurisdictions and, unless an exemption from withholding is
properly established by a Holder, shall remit amounts withheld with respect to
the Holder to applicable jurisdictions. To the extent that the Trust is required
to withhold and pay over any amounts to any authority with respect to
distributions or allocations to any Holder, the amount withheld shall be deemed
to be a distribution in the amount of the withholding to the Holder. In the
event of any claimed overwithholding, Holders shall be limited to an action
against the applicable jurisdiction. If the amount to be withheld was not
withheld from a Distribution, the Trust may reduce subsequent Distributions by
the amount of such withholding.
ARTICLE 12
AMENDMENTS AND MEETINGS
SECTION 12.01. Amendments. (a) Except as otherwise provided in this
Declaration or by any applicable terms of the Securities, this Declaration may
be amended by, and only by, a written instrument executed by a majority of the
Regular Trustees; provided, however, that (i) no amendment to this Declaration
shall be made unless the Regular Trustees shall have obtained (A) either a
ruling from the Internal Revenue Service or a written unqualified opinion of
nationally recognized independent tax counsel experienced in such matters to the
effect that such amendment will not cause the Trust to be classified for United
States federal income tax purposes as an association taxable as a corporation or
a partnership and to the effect that the Trust will continue to be treated as a
grantor trust for purposes of United States federal income taxation and (B) a
written unqualified opinion of nationally recognized independent counsel
experienced in such matters to the effect that such amendment will not cause the
Trust to be an Investment
42
<PAGE> 48
Company which is required to be registered under the Investment Company Act,
(ii) at such time after the Trust has issued any Securities which remain
outstanding, any amendment which would adversely affect the rights, privileges
or preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities,
(iii) Section 4.02, Section 9.01(c) and this Section 12.01 shall not be amended
without the consent of all of the Holders of the Securities, (iv) no amendment
which adversely affects the rights, powers and privileges of the Property
Trustee shall be made without the consent of the Property Trustee, (v) Article 4
shall not be amended without the consent of the Sponsor, and (vi) the rights of
Holders of Common Securities under Article 5 to increase or decrease the number
of, and to appoint, replace or remove, Trustees shall not be amended without the
consent of each Holder of Common Securities.
(b) Notwithstanding Section 12.02(a)(ii), this Declaration may be amended
without the consent of the Holders of the Securities to (i) cure any ambiguity,
(ii) correct or supplement any provision in this Declaration that may be
defective or inconsistent with any other provision of this Declaration, (iii) to
add to the covenants, restrictions or obligations of the Sponsor, and (iv) to
conform to any changes in Rule 3a-7 or any change in interpretation or
application of Rule 3a- 7 by the Commission, which amendment does not adversely
affect the rights, preferences or privileges of the Holders.
SECTION 12.02. Meetings of the Holders of Securities; Action by Written
Consent. (a) Meetings of the Holders of Preferred Securities and/or Common
Securities may be called at any time by the Regular Trustees (or as provided in
the terms of the Securities) to consider and act on any matter on which Holders
of such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange on
which the Preferred Securities are listed or admitted for trading. The Regular
Trustees shall call a meeting of Holders of Preferred Securities or Common
Securities, if directed to do so by Holders of at least 10% in liquidation
amount of such class of Securities. Such direction shall be given by delivering
to the Regular Trustees one or more calls in a writing stating that the signing
Holders of Securities wish to call a meeting and indicating the general or
specific purpose for which the meeting is to be called. Any Holders of
Securities calling a meeting shall specify in writing the Certificates held by
the Holders of Securities exercising the right to call a meeting and only those
specified Certificates shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this paragraph has been
met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provision shall apply to meetings of Holders of
Securities:
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<PAGE> 49
(i) Notice of any such meeting shall be given by mail to all the
Holders of Securities having a right to vote thereat not less than 7 days
nor more than 60 days prior to the date of such meeting. Whenever a vote,
consent or approval of the Holders of Securities is permitted or required
under this Declaration or the rules of any stock exchange on which the
Preferred Securities are listed or admitted for trading, such vote,
consent or approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting of the Holders of
Securities may be taken without a meeting if a consent in writing setting
forth the action so taken is signed by Holders of Securities owning not
less than the minimum aggregate liquidation amount of Securities that
would be necessary to authorize or take such action at a meeting at which
all Holders of Securities having a right to vote thereon were present and
voting. Prompt notice of the taking of action without a meeting shall be
given to the Holders of Securities entitled to vote who have not consented
in writing. The Regular Trustees may specify that any written ballot
submitted to the Holders of Securities for the purpose of taking any
action without a meeting shall be returned to the Trust within the time
specified by the Regular Trustees.
(ii) Each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of a Security is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of the
Security executing it. Except as otherwise provided herein or in the terms
of the Securities, all matters relating to the giving, voting or validity
of proxies shall be governed by the General Corporation Law of the State
of Delaware relating to proxies, and judicial interpretations thereunder,
as if the Trust were a Delaware corporation and the Holders of the
Securities were stockholders of a Delaware corporation.
(iii) Each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate.
(iv) Unless otherwise provided in the Business Trust Act, this
Declaration or the rules of any stock exchange on which the Preferred
Securities are then listed or admitted for trading, the Regular Trustees,
in their sole discretion, shall establish all other provisions relating to
meetings of Holders of Securities, including notice of the time, place or
purpose of
44
<PAGE> 50
any meeting at which any matter is to be voted on by any Holders of
Securities, waiver of any such notice, action by consent without a
meeting, the establishment of a record date, quorum requirements, voting
in person or by proxy or any other matter with respect to the exercise of
any such right to vote.
ARTICLE 13
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.01. Representations and Warranties of Property Trustee. (a) The
Trustee which acts as initial Property Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Declaration, and each Successor
Property Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(i) The Property Trustee is a national banking association or a
banking corporation with trust powers, duly organized, validly existing
and in good standing under the laws of the United States or the laws of
the state of its incorporation, with trust power and authority to execute
and deliver, and to carry out and perform its obligations under the terms
of, this Declaration.
(ii) The execution, delivery and performance by the Property Trustee
of this Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. The Declaration has been duly
executed and delivered by the Property Trustee, and constitutes a legal,
valid and binding obligation of the Property Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
(iii) The execution, delivery and performance of this Declaration by
the Property Trustee does not conflict with or constitute a breach of the
Charter or By-laws of the Property Trustee.
(iv) No consent, approval or authorization of, or registration with
or notice to, any banking authority which supervises or regulates the
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<PAGE> 51
Property Trustee is required for the execution, delivery or performance by
the Property Trustee, of this Declaration.
(v) The Property Trustee satisfies the qualifications set forth in
Section 5.01(c).
(b) The Trustee which acts as initial Delaware Trustee represents and
warrants to the Trust and the Sponsor at the date of this Declaration, and each
Successor Delaware Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee, that it satisfies the qualifications set forth in Section
5.01(a)(3).
ARTICLE 14
MISCELLANEOUS
SECTION 14.01. Notices. All notices provided for in this Declaration shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Regular Trustees
on behalf of the Trust may give notice of to the Holders of the Securities):
AES Trust I
c/o The AES Corporation
1001 North 19th Street
Arlington, Virginia 22209
Attention: General Counsel
Facsimile No: (703) 528-4510
(b) if given to the Property Trustee, at the mailing address of the
Property Trustee set forth below (or such other address as the Property Trustee
may give notice of to the Holders of the Securities):
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Administrator
Telecopy: (312) 407-1708
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<PAGE> 52
(c) if given to the Delaware Trustee, at the mailing address of the
Delaware Trustee set forth below (or such other address as the Delaware Trustee
may give notice of to the Holders of the Securities):
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
Telecopy: (312) 407-1708
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Trust):
The AES Corporation
1001 North 19th Street
Arlington, Virginia 22209
Attention: Corporate Secretary
Facsimile No: (703) 528-4510
(e) if given to any other Holder, at the address set forth on the books
and records of the Trust.
A copy of any notice to the Property Trustee or the Delaware Trustee shall
also be sent to the Trust. All notices shall be deemed to have been given, when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 14.02. Undertaking for Costs. All parties to this Declaration
agree, and each Holder of any Securities by his or her acceptance thereof shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Declaration, or in
any suit against the Property Trustee for any action taken or omitted by it as
Property Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 14.02 shall not apply to any suit instituted by the
Property Trustee, to any suit instituted by any Holder of Preferred Securities,
or group of Holders of Preferred Securities, holding more than 10% in aggregate
liquidation amount of the outstanding Preferred Securities, or to any suit
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<PAGE> 53
instituted by any Holder of Preferred Securities for the enforcement of the
payment of the principal of (or premium, if any) or interest on the Debentures,
on or after the respective due dates expressed in such Debentures.
SECTION 14.03. Governing Law. This Declaration and the rights of the
parties hereunder shall be governed by and interpreted in accordance with the
laws of the State of Delaware and all rights and remedies shall be governed by
such laws without regard to principles of conflict of laws.
SECTION 14.04. Headings. Headings contained in this Declaration are
inserted for convenience of reference only and do not affect the interpretation
of this Declaration or any provision hereof.
SECTION 14.05. Partial Enforceability. If any provision of this
Declaration, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
SECTION 14.06. Counterparts. This Declaration may contain more than one
counterpart of the signature pages and this Declaration may be executed by the
affixing of the signature of the Sponsor and each of the Trustees to one of such
counterpart signature pages. All of such counterpart signature pages shall be
read as though one, and they shall have the same force and effect as though all
of the signers had signed a single signature page.
SECTION 14.07. Intention of the Parties. It is the intention of the
parties hereto that the Trust not be classified for United States federal income
tax purposes as an association taxable as a corporation or partnership but that
the Trust be treated as a grantor trust for United States federal income tax
purposes. The provisions of this Declaration shall be interpreted to further
this intention of the parties.
SECTION 14.08. Successors and Assigns. Whenever in this Declaration any of
the parties hereto is named or referred to, the successors and assigns of such
party shall be deemed to be included, and all covenants and agreements in this
Declaration by the Sponsor and the Trustees shall bind and inure to the benefit
of their respective successors and assigns, whether so expressed.
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<PAGE> 54
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
THE AES Corporation
as Sponsor
By:______________________________
Name:
Title:
_______________________________
William R. Luraschi
as Trustee
_______________________________
Willard Hoagland
as Trustee
_______________________________
Barry J. Sharp
as Trustee
The First National Bank of Chicago
as Property Trustee
By:______________________________
Name:
Title:
First Chicago Delaware Inc.
as Delaware Trustee
By:______________________________
Name:
Title:
49
<PAGE> 55
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, on this day of March __, 1997,
personally appeared _______________ (on behalf of The AES Corporation and
_____________, each known to me (or proved to me by introduction upon the oath
of a person known to me) to be the person and officer, as the case may be, whose
name is subscribed to the foregoing instrument, and each acknowledged to me that
he executed the same as the act of such are for the purposes and consideration
herein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS _____ day of March, 1997.
________________________________
NOTARY PUBLIC, STATE OF NEW YORK
Print Name:_____________________
Commission Expires:_____________
<PAGE> 56
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, on this day of March__, 1997,
personally appeared ________________ of __________ known to me (or proved to me
by introduction upon the oath of a person known to me) to be the person and
officer whose names are subscribed to the foregoing instrument, and acknowledged
to me that she executed the same as the act of such trust for the purposes and
consideration herein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS _____ day of March, 1997.
(SEAL)
________________________________
NOTARY PUBLIC, STATE OF NEW YORK
Print Name:_____________________
Commission Expires:_____________
<PAGE> 57
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, on this day of March __, 1997,
personally appeared ________________ of ___________ known to me (or proved to me
by introduction upon the oath of a person known to me) to be the person and
officer whose names are subscribed to the foregoing instrument, and acknowledged
to me that she executed the same as the act of such trust for the purposes and
consideration herein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS _____ day of March, 1997.
(SEAL)
________________________________
NOTARY PUBLIC, STATE OF NEW YORK
Print Name:_____________________
Commission Expires:_____________
<PAGE> 58
EXHIBIT A
AMENDED AND RESTATED CERTIFICATE OF TRUST
OF
AES TRUST I
THIS Amended and Restated Certificate of Trust of AES Capital Trust I (the
"Trust"), dated December 5, 1996, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware Business
Trust Act (12 Del. Code ss. 3801 et seq.).
1. Name. The name of the business trust being formed hereby is AES Trust
I.
2. Delaware Trustee. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware is First
Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801.
3. Effective Date. This Certificate of Trust shall be effective as of its
filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the Trust,
have executed this Certificate of Trust as of the date first above written.
First Chicago Delaware Inc.
as Delaware Trustee
/s/ Steven M. Wagner
-------------------------------
Name: Steven M. Wagner
Title: Vice President
<PAGE> 59
The First National Bank of Chicago
as Property Trustee
/s/ Richard D. Manella
-------------------------------
Name: Richard D. Manella
Title: Vice President
/s/ William R. Luraschi
-------------------------------
William R. Luraschi
as Trustee
/s/ Willard Hoagland
-------------------------------
Willard Hoagland
as Trustee
/s/ Barry J. Sharp
-------------------------------
Barry J. Sharp
as Trustee
<PAGE> 60
EXHIBIT B
TERMS OF
PREFERRED SECURITIES
Pursuant to Section 7.01 of the Amended and Restated Declaration of Trust
of AES Trust I dated as of March __, 1997 (as amended from time to time, the
"Declaration"), the designations, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities are set forth below
(each capitalized term used but not defined herein having the meaning set forth
in the Declaration):
1. Designation and Number. Preferred Securities of the Trust with an
aggregate liquidation amount in the assets of the Trust of Two Hundred Million
Dollars ($200,000,000) (plus up to an additional Thirty Million Dollars
($30,000,000) issuable upon exercise of the overallotment option set forth in
the Underwriting Agreement) and a liquidation amount in the assets of the Trust
of $50 per Preferred Security, are hereby designated as "$____ Term Convertible
Securities, Series A". The Preferred Security Certificates evidencing the
Preferred Securities shall be substantially in the form attached hereto as Annex
I, with such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice or to conform to the rules of any
stock exchange on which the Preferred Securities are listed. In connection with
the issuance and sale of the Preferred Securities and the Common Securities, the
Trust will purchase as trust assets Debentures of AES having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities and Common Securities so issued and bearing interest at an annual
rate equal to the annual Distribution rate on the Preferred Securities and
Common Securities and having payment and redemption provisions which correspond
to the payment and redemption provisions of the Preferred Securities and Common
Securities.
2. Distributions. (a) Distributions payable on each Preferred Security
will be fixed at a rate per annum of ____% (the "Coupon Rate") of the stated
liquidation amount of $50 per Preferred Security. Distributions in arrears for
more than one calendar quarter will bear interest at the rate per annum of ____%
thereof (to the extent permitted by law), compounded quarterly. The term
"Distributions" as used herein means such periodic cash distributions and any
such interest payable unless otherwise stated. A Distribution will be made by
the Property Trustee only to the extent that interest payments are made in
respect of the Debentures held by the Property Trustee. The amount of
Distributions payable for any period will be computed for any quarterly
Distribution period on the basis of a 360-day year of twelve
<PAGE> 61
30-day months, and for any Distribution period shorter or longer than a 30-day
month Distribution period for which Distributions are computed, Distributions
will be computed on the basis of the actual number of days elapsed.
(b) Distributions on the Preferred Securities will be cumulative, will
accrue from ___________, 1997 and will be payable quarterly in arrears, on the
last day of each quarter commencing on ________________, 1997, except as
otherwise described below, but only if and to the extent that interest payments
are made in respect of the Debentures held by the Property Trustee. So long as
AES shall not be in default in the payment of interest on the Debentures, AES
has the right under the Indenture for the Debentures to defer payments of
interest by extending the interest payment period from time to time on the
Debentures for a period not exceeding 20 consecutive quarterly interest periods
(each, an "Extension Period") and, as a consequence, quarterly Distributions
will continue to accrue with interest thereon (to the extent permitted by
applicable law) at the rate of ____% per annum, compounded quarterly during any
such Extension Period and provided that no Extension Period shall last beyond
the the date of maturity or any redemption date of the Debentures. Prior to the
termination of any such Extension Period, AES may further extend such Extension
Period; provided that such Extension Period together with all such previous and
further extensions thereof may not exceed 20 consecutive quarterly interest
periods; Upon the termination of any Extension Period and the payment of all
then due, AES may commence a new Extension Period, subject to the above
requirements. Payments of accrued Distributions will be payable to Holders of
Preferred Securities as they appear on the books and records of the Trust on the
first record date after the end of the Extension Period.
(c) Distributions on the Preferred Securities will be payable promptly by
the Property Trustee (or other Paying Agent) upon receipt of immediately
available funds to the Holders thereof as they appear on the books and records
of the Trust on the relevant record dates. While the Preferred Securities remain
in book-entry only form, the relevant record dates shall be one business day
prior to the relevant Distribution date, and if the Preferred Securities are no
longer in book-entry only form, the relevant record dates will be the fifteenth
(15th) day of the month in which the relevant Distribution date occurs, which
record and payment dates correspond to the record and interest payment dates on
the Debentures. Distributions payable on any Preferred Securities that are not
punctually paid on any Distribution payment date as a result of AES having
failed to make the corresponding interest payment on the Debentures will
forthwith cease to be payable to the person in whose name such Preferred
Security is registered on the relevant record date, and such defaulted
Distribution will instead be payable to the person in whose name such Preferred
Security is registered on the special record date established by the Regular
Trustees, which record date shall correspond to the special record date or other
specified date determined in accordance with the Indenture; provided, however,
that Distributions shall not be considered
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payable on any Distribution payment date falling within an Extension Period
unless AES has elected to make a full or partial payment of interest accrued on
the Debentures on such Distribution payment date. Subject to any applicable laws
and regulations and the provisions of the Declaration, each payment in respect
of the Preferred Securities will be made as described in paragraph 10 hereof. If
any date on which Distributions are payable on the Preferred Securities is not a
Business Day, then payment of the Distribution payable on such date will be made
on the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
(d) All Distributions paid with respect to the Preferred Securities and
the Common Securities will be paid Pro Rata to the Holders thereof entitled
thereto. If an Event of Default has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities with respect to
Distributions.
(e) In the event of an election by the Holder to convert its Securities
through the Conversion Agent into Common Stock pursuant to the terms of the
Securities as set forth in this Exhibit B to the Declaration, no payment,
allowance or adjustment shall be made with respect to accumulated and unpaid
Distributions on such Securities, or be required to be made; provided, however,
that if a Security is surrendered for conversion after the close of business on
any regular record date for payment of a Distribution and before the opening of
business on the corresponding Distribution date, then, notwithstanding such
conversion, the Distribution payable on such Distribution date will be paid in
cash to the person in whose name the Security is registered at the close of
business on such record date, and (other than a Security or a portion of a
Security called for redemption on a redemption date occurring after such record
date and on or prior to such Distribution date) when so surrendered for
conversion, the Security must be accompanied by payment of an amount equal to
the Distribution payable on such Distribution date.
(f) In the event that there is any money or other property held by or for
the Trust that is not accounted for under the Declaration, such money or
property shall be distributed Pro Rata among the Holders of the Preferred
Securities and Common Securities.
3. Liquidation Distribution Upon Dissolution. In the event of any
voluntary or involuntary dissolution, winding-up or termination of the Trust,
the Holders of the Preferred Securities and Common Securities at the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive Pro Rata solely out of the assets of the Trust available for
distribution to Holders of Preferred Securities and Common Securities after
satisfaction of liabilities to creditors,
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an amount equal to the aggregate of the stated liquidation amount of $50 per
Preferred Security and Common Security plus accrued and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such dissolution, winding-up or
termination, and after satisfaction of liabilities to creditors, Debentures in
an aggregate principal amount equal to the aggregate stated liquidation amount
of such Preferred Securities and Common Securities and bearing accrued and
unpaid interest in an amount equal to the accrued and unpaid Distributions on,
such Preferred Securities and Common Securities, shall be distributed Pro Rata
to the Holders of the Preferred Securities and Common Securities in exchange for
such Securities.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Preferred Securities and Common Securities shall be paid, subject
to the next paragraph, on a Pro Rata basis.
Holders of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution Pro Rata with Holders of Preferred
Securities, except that if an Event of Default has occurred and is continuing,
the Preferred Securities shall have a priority over the Common Securities with
respect to such Liquidation Distribution.
4. Redemption and Distribution of Debentures. The Preferred Securities and
Common Securities may only be redeemed if Debentures having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities and Common Securities are repaid, redeemed or distributed as set
forth below:
(a) Upon the repayment of the Debentures, in whole or in part, whether at
maturity, upon redemption at any time or from time to time on or after
_________, 1997, the proceeds of such repayment will be promptly applied to
redeem Pro Rata Preferred Securities and Common Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Debentures so
repaid or redeemed, upon not less than 30 nor more than 60 days' notice, at a
redemption price per Preferred and Common Security equal to the redemption price
of the Debentures, together with accrued and unpaid Distributions thereon
through the date of redemption, payable in cash (the "Redemption Price"). The
date of any such repayment or redemption of Preferred Securities and Common
Securities shall be established to coincide with the repayment or redemption
date of the Debentures.
(b) If fewer than all the outstanding Preferred Securities and Common
Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed Pro Rata and the Preferred Securities to be redeemed
will be redeemed as described in
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paragraph 4(f)(ii) below. If a partial redemption would result in the delisting
of the Preferred Securities by any national securities exchange or other
organization on which the Preferred Securities are then listed, AES pursuant to
the Indenture will only redeem Debentures in whole and, as a result, the Trust
may only redeem the Preferred Securities in whole.
(c) If, at any time, a Tax Event or an Investment Company Event (each as
hereinafter defined, and each a "Special Event") shall occur and be continuing,
the Regular Trustees shall, unless the Debentures are redeemed in the limited
circumstances described below, dissolve the Trust and, after satisfaction of
creditors, cause Debentures held by the Property Trustee having an aggregate
principal amount equal to the aggregate stated liquidation amount of and accrued
and unpaid interest equal to accrued and unpaid Distributions on, and having the
same record date for payment as the Preferred Securities and Common Securities,
to be distributed to the Holders of the Preferred Securities and Common
Securities on a Pro Rata basis in liquidation of such Holders' interests in the
Trust, within 90 days following the occurrence of such Special Event (the "90
Day Period"), provided, however, that in the case of the occurrence of a Tax
Event, as a condition of such dissolution and distribution, the Regular Trustees
shall have received an opinion of a nationally recognized independent tax
counsel experienced in such matters (a "No Recognition Opinion"), which opinion
may rely on any then applicable published revenue ruling of the Internal Revenue
Service, to the effect that the Holders of the Preferred Securities will not
recognize any gain or loss for United States federal income tax purposes as a
result of the dissolution of the Trust and distribution of Debentures; and
provided, further, that, if and as long as at the time there is available to the
Trust the opportunity to eliminate, within the 90 Day Period, the Special Event
by taking some ministerial action, such as filing a form or making an election,
or pursuing some other similar reasonable measure that has no adverse effect on
the Trust, AES or the Holders of the Preferred Securities ("Ministerial
Action"), the Trust will pursue such measure in lieu of dissolution.
If in the case of the occurrence of a Tax Event, (i) the Regular Trustees
have received an opinion (a "Redemption Tax Opinion") of nationally recognized
independent tax counsel experienced in such matters that, as a result of a Tax
Event, there is more than an insubstantial risk that AES would be precluded from
deducting the interest on the Debentures for United States federal income tax
purposes even if the Debentures were distributed to the Holders of Preferred
Securities and Common Securities in liquidation of such Holder's interest in the
Trust as described in this paragraph 4(c) or (ii) the Regular Trustees shall
have been informed by such tax counsel that a No Recognition Opinion cannot be
delivered to the Trust, AES shall have the right at any time, upon not less than
30 nor more than 60 days' notice, to redeem the Debentures in whole or in part
for cash at the Redemption Price within 90 days following the occurrence of such
Tax Event, and promptly following such
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redemption Preferred Securities and Common Securities with an aggregate
liquidation amount equal to the aggregate principal amount of the Debentures so
redeemed will be redeemed by the Trust at the Redemption Price on a Pro Rata
basis; provided, however, that, if at the time there is available to AES or the
Regular Trustees on behalf of the Trust the opportunity to eliminate, within
such 90 day period, the Tax Event by taking some Ministerial Action, AES or the
Regular Trustees on behalf of the Trust will pursue such measure in lieu of
redemption and; provided, further, that AES shall have no right to redeem the
Debentures while the Regular Trustees on behalf of the Trust are pursuing such
Ministerial Action. The Common Securities will be redeemed Pro Rata with the
Preferred Securities, except that if an Event of Default under the Indenture has
occurred and is continuing, the Preferred Securities will have a priority over
the Common Securities with respect to payment of the Redemption Price.
"Tax Event" means that the Regular Trustees shall have obtained an opinion
of nationally recognized independent tax counsel experienced in such matters (a
"Dissolution Tax Opinion") to the effect that on or after ____________, 1997 as
a result of (a) any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, (b) any amendment
to, or change in, an interpretation or application of any such laws or
regulations by any legislative body, court, governmental agency or regulatory
authority (including the enactment of any legislation and the publication of any
judicial decision or regulatory determination), (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the theretofore generally accepted position or (d)
any action taken by any governmental agency or regulatory authority, which
amendment or change is enacted, promulgated, issued or announced or which
interpretation or pronouncement is issued or announced or which action is taken,
in each case on or after _________, 1997, there is more than an insubstantial
risk that (i) the Trust is, or will be within 90 days of the date thereof,
subject to United States federal income tax with respect to income accrued or
received on the Debentures, (ii) the Trust is, or will be within 90 days of the
date thereof, subject to more than a de minimis amount of other taxes, duties
or other governmental charges or (iii) interest payable by AES to the Trust on
the Debentures is not, or within 90 days of the date thereof will not be,
deductible by AES for United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of nationally recognized independent counsel experienced in
practice under the Investment Company Act that, as a result of the occurrence of
a change in law or regulation or a change in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority (a "Change in 1940 Act Law"), there is more than an
insubstantial risk that the Trust is or will be considered an Investment Company
which is required to be registered under
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the Investment Company Act, which Change in 1940 Act Law becomes effective on or
after _________, 1997.
On the date fixed for any distribution of Debentures, upon dissolution of
the Trust, (i) the Preferred Securities will no longer be deemed to be
outstanding and (ii) certificates representing Preferred Securities will be
deemed to represent beneficial interests in the Debentures having an aggregate
principal amount equal to the stated liquidation amount of, and bearing accrued
and unpaid interest equal to accrued and unpaid Distributions on, such Preferred
Securities until such certificates are presented to AES or its agent for
transfer or reissuance.
(d) The Trust may not redeem any outstanding Preferred Securities unless
all accrued and unpaid Distributions have been paid on all Preferred Securities
for all quarterly Distribution periods terminating on or prior to the date of
redemption.
(e) If Debentures are distributed to Holders of the Preferred Securities,
AES, pursuant to the terms of the Indenture, will use its best efforts to have
the Debentures listed on the New York Stock Exchange or on such other exchange
as the Preferred Securities were listed immediately prior to the distribution of
the Debentures.
(f) (i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Preferred Securities and Common Securities (a
"Redemption/ Distribution Notice") will be given by the Regular Trustees on
behalf of the Trust by mail to each Holder of Preferred Securities and Common
Securities to be redeemed or exchanged not less than 30 nor more than 60 days
prior to the date fixed for redemption or exchange thereof. For purposes of the
calculation of the date of redemption or exchange and the dates on which notices
are given pursuant to this paragraph (f)(i), a Redemption/Distribution Notice
shall be deemed to be given on the day such notice is first mailed by
first-class mail, postage prepaid, to Holders of Preferred Securities and Common
Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of Preferred Securities and Common Securities at the address of each
such Holder appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with respect
to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Preferred Securities
are to be redeemed, the Preferred Securities to be redeemed will be redeemed Pro
Rata from each Holder of Preferred Securities, it being understood that, in
respect of Preferred Securities registered in the name of and held of record by
DTC (or successor Clearing Agency) or any other nominee, the Preferred
Securities will be redeemed from, and the distribution of the proceeds of such
redemption will be made to, each Clearing Agency
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Participant (or person on whose behalf such nominee holds such securities) in
accordance with the procedures applied by such agency or nominee.
(iii) Subject to paragraph 10 hereof, if the Trust gives a Redemption/
Distribution Notice in respect of a redemption of Preferred Securities as
provided in this paragraph 4 (which notice will be irrevocable) then (A) while
the Preferred Securities are in book-entry only form, with respect to the
Preferred Securities, by 12:00 noon, New York City time, on the redemption date,
provided that AES has paid the Property Trustee, in immediately available funds,
a sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, the Property Trustee will deposit irrevocably with
DTC (or successor Clearing Agency) funds sufficient to pay the applicable
Redemption Price with respect to the Preferred Securities and will give DTC (or
successor Clearing Agency) irrevocable instructions and authority to pay the
Redemption Price to the Holders of the Preferred Securities and (B) if the
Preferred Securities are issued in definitive form, with respect to the
Preferred Securities and provided that AES has paid the Property Trustee, in
immediately available funds, a sufficient amount of cash in connection with the
related redemption or maturity of the Debentures, the Property Trustee will pay
the relevant Redemption Price to the Holders of such Preferred Securities by
check mailed to the address of the relevant Holder appearing on the books and
records of the Trust on the redemption date. If a Redemption/Distribution Notice
shall have been given and funds deposited as required, if applicable, then
immediately prior to the close of business on the date of such deposit,
Distributions will cease to accrue on the Preferred Securities called for
redemption, such Preferred Securities will no longer be deemed to be outstanding
and all rights of Holders of such Preferred Securities so called for redemption
will cease, except the right of the Holders of such Preferred Securities to
receive the Redemption Price, but without interest on such Redemption Price.
Neither the Trustees nor the Trust shall be required to register or cause to be
registered the transfer of any Preferred Securities which have been so called
for redemption. If any date fixed for redemption of Preferred Securities is not
a Business Day, then payment of the Redemption Price payable on such date will
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption. If AES fails to repay Debentures
on maturity or on the date fixed for this redemption or if payment of the
Redemption Price in respect of Preferred Securities is improperly withheld or
refused and not paid either by the Property Trustee or by AES pursuant to the
Preferred Securities Guarantee, Distributions on such Preferred Securities will
continue to accrue, from the original redemption date to the date of payment, in
which case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
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(iv) Redemption/Distribution Notices shall be sent by the Regular Trustees
on behalf of the Trust to DTC or its nominee (or any successor Clearing Agency
or its nominee) if the Global Certificates have been issued or, if Definitive
Preferred Security Certificates have been issued, to the Holders of the
Preferred Securities.
(v) Upon the date of dissolution of the Trust and distribution of
Debentures as a result of the occurrence of a Special Event, Preferred Security
Certificates shall be deemed to represent beneficial interests in the Debentures
so distributed, and the Preferred Securities will no longer be deemed
outstanding and may be canceled by the Regular Trustees. The Debentures so
distributed shall have an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities so distributed.
(vi) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), AES or any of its
subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private agreement.
5. Conversion Rights.
The Holders of Securities shall have the right at any time prior to the
close of business on ,2027 (or, in the case of Securities called for
redemption, prior to the close of business on the Business Day prior to the
redemption date), at their option, to cause the Conversion Agent to convert
Securities, on behalf of the converting Holders, into shares of Common Stock in
the manner described herein on and subject to the following terms and
conditions:
The Securities will be convertible at the office of the Conversion Agent
into fully paid and nonassessable shares of Common Stock pursuant to the
Holder's direction to the Conversion Agent to exchange such Securities for a
portion of the Debentures theretofore held by the Trust on the basis of one
Security per $__ principal amount of Debentures, and immediately convert such
amount of Debentures into fully paid and nonassessable shares of Common Stock at
an initial rate of _ shares of Common Stock per $__ principal amount of
Debentures (which is equivalent to a conversion price of per share of Common
Stock, subject to certain adjustments set forth in Sections 5.03 and 5.04 of the
Supplemental Indenture (as so adjusted, the "Conversion Price")).
(a) In order to convert Securities into Common Stock the Holder shall
submit to the Conversion Agent at the office referred to above an irrevocable
request to convert Securities on behalf of such Holder (the "Conversion
Request"), together, if the Securities are in certificated form, with such
certificates. The Conversion Request shall (i) set forth the number of
Securities to be converted and the name or names, if
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other than the Holder, in which the shares of Common Stock should be issued and
(ii) direct the Conversion Agent (a) to exchange such Securities for a portion
of the Debentures held by the Trust (at the rate of exchange specified in the
preceding paragraph) and (b) to immediately convert such Debentures on behalf of
such Holder, into Common Stock (at the conversion rate specified in the
preceding paragraph). The Conversion Agent shall notify the Property Trustee of
the Holder's election to exchange Securities for a portion of the Debentures
held by the Trust and the Property Trustee shall, upon receipt of such notice,
deliver to the Conversion Agent the appropriate principal amount of Debentures
for exchange in accordance with this Section. The Conversion Agent shall
thereupon notify the Property Trustee of the Holder's election to convert such
Debentures into shares of Common Stock. If a Security is surrendered for
conversion after the close of business on any regular record date for payment of
a Distribution and before the opening of business on the corresponding
Distribution payment date, then, notwithstanding such conversion, the
Distribution payable on such Distribution payment date will be paid in cash to
the person in whose name the Security is registered at the close of business on
such record date, and (other than a Security or a portion of a Security called
for redemption on a redemption date occurring after such record date and on or
prior to such Distribution payment date) when so surrendered for conversion, the
Security must be accompanied by payment of an amount equal to the Distribution
payable on such Distribution payment date. Except as provided above, neither the
Trust nor the Sponsor will make, or be required to make, any payment, allowance
or adjustment upon any conversion on account of any accumulated and unpaid
Distributions accumulated on the Securities surrendered for conversion, or on
account of any accumulated and unpaid dividends on the shares of Common Stock
issued upon such conversion. Securities shall be deemed to have been converted
immediately prior to the close of business on the day on which a notice of
conversion ("Notice of Conversion") relating to such Securities is received by
the Trust in accordance with the foregoing provision (the "Conversion Date").
The Person or Persons entitled to receive Common Stock issuable upon conversion
of the Debentures shall be treated for all purposes as the record holder or
holders of such Common Stock at such time. As promptly as practicable on or
after the Conversion Date, the Sponsor shall issue and deliver at the office of
the Conversion Agent a certificate or certificates for the number of full shares
of Common Stock issuable upon such conversion, together with the cash payment,
if any, in lieu of any fraction of any share to the Person or Persons entitled
to receive the same, unless otherwise directed by the Holder in the Notice of
Conversion and the Conversion Agent shall distribute such certificate or
certificates, together with the applicable cash payment, if any, to such Person
or Persons.
(b) Each Holder of a Security by his acceptance thereof appoints _________
_____________ "Conversion Agent" for the purpose of effecting the conversion of
Securities in accordance with this Section. In effecting the conversion and
transactions described in this Section, the Conversion Agent shall be acting as
agent of the Holders of Securities
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directing it to effect such conversion transactions. The Conversion Agent is
hereby authorized (i) to exchange Securities from time to time for Debentures
held by the Trust in connection with the conversion of such Securities in
accordance with this section and (ii) to convert all or a portion of the
Debentures into Common Stock and thereupon to deliver such shares of Common
Stock in accordance with the provisions of this section and to deliver to the
Trust a new Debenture or Debentures for any resulting unconverted principal
amount.
(c) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid in cash
by the Sponsor to the Conversion Agent, which in turn will make such payment to
the Holder or Holders of Securities so converted.
(d) The Sponsor shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for issuance upon the conversion of
the Debentures, free from any preemptive or other similar rights, such number of
shares of Common Stock as shall from time to time be issuable upon the
conversion of all the Debentures then outstanding. Notwithstanding the
foregoing, the Sponsor shall be entitled to deliver upon conversion of
Debentures, shares of Common Stock reacquired and held in the treasury of the
Sponsor (in lieu of the issuance of authorized and unissued shares of Common
Stock), so long as any such treasury shares are free and clear of all liens,
charges, security interests or encumbrances. Any shares of Common Stock issued
upon conversion of the Debentures shall be duly authorized, validly issued and
fully paid and nonassessable. The Trust shall deliver the shares of Common Stock
received upon conversion of the Debentures to the converting Holder free and
clear of all liens, charges, security interests and encumbrances, except for
United States withholding taxes. Each of the Sponsor and the Trust shall prepare
and shall use its best efforts to obtain and keep in force such governmental or
regulatory permits or other authorizations as may be required by law, and shall
comply with all applicable requirements as to registration or qualification of
Common Stock (and all requirements to list Common Stock issuable upon conversion
of Debentures that are at the time applicable), in order to enable the Sponsor
to lawfully issue Common Stock to the Trust upon conversion of the Debentures
and the Trust to lawfully deliver Common Stock to each Holder upon conversion of
the Securities.
(e) The Sponsor will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of Common Stock on conversion of Debentures
and the delivery of the shares of Common Stock by the Trust upon conversion of
the Securities. The Sponsor shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery of
shares of Common Stock in a name other than that in which the Securities so
converted were registered, and no such issue or delivery shall be made unless
and until the person
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requesting such issue has paid to the Trust the amount of any such tax, or has
established to the satisfaction of the Trust that such tax has been paid.
(f) Nothing in the preceding Paragraph (e) shall limit the requirement of
the Trust to withhold taxes pursuant to the terms of the Securities as set forth
in this Exhibit B to the Declaration or to the Declaration itself or otherwise
require the Property Trustee or the Trust to pay any amounts on account of
such withholdings.
6. Voting Rights. (a) Except as provided under paragraph 6(b) below and as
otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) If any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than in connection
with the distribution of Debentures held by the Property Trustee, upon the
occurrence of a Special Event or in connection with the redemption of Preferred
Securities as a consequence of a redemption of Debentures, then the Holders of
outstanding Securities will be entitled to vote on such amendment or proposal as
a class and such amendment or proposal shall not be effective except with the
approval of the Holders of Securities representing a Majority in liquidation
amount of such Securities; provided, however, that (A) if any amendment or
proposal referred to in clause (i) above would adversely affect only the
Preferred Securities or the Common Securities, then only the affected class will
be entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of a Majority in liquidation
amount of such class of Securities and (B) amendments to the Declaration shall
be subject to such further requirements as are set forth in Sections 12.01 and
12.02 of the Declaration.
In the event the consent of the Property Trustee, as the holder of the
Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders of the Securities
with respect to such amendment, modification or termination. The Property
Trustee shall vote with respect to such amendment, modification or termination
as directed by a Majority in liquidation amount of the Securities voting
together as a single class; provided that where such amendment, modification or
termination of the Indenture requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than a majority in
principal amount of the Debentures or (2) each holder of Debentures, the
Property Trustee may only vote with respect to that amendment, modification or
termination as directed by, in the case of clause (1) above, the vote of Holders
of Securities representing such specified percentage of the aggregate
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liquidation amount of the Securities, or, in the case of clause (2) above, each
Holder of Securities; and provided, further, that the Property Trustee shall be
under no obligation to take any action in accordance with the directions of the
Holders of Securities unless the Property Trustee shall have received, at the
expense of the Sponsor, an opinion of nationally recognized independent tax
counsel recognized as expert in such matters to the effect that the Trust will
not be classified for United States federal income tax purposes as an
association taxable as a corporation or a partnership on account of such action
and will be treated as a grantor trust for United States federal income tax
purposes following such action.
Subject to Section 2.06 of the Declaration, and the provisions of this and
the next succeeding paragraph, the Holders of a Majority in liquidation amount
of the Preferred Securities, voting separately as a class shall have the right
to (A) on behalf of all Holders of Preferred Securities, waive any past default
that is waivable under the Declaration (subject to, and in accordance with the
Declaration) and (B) direct the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under the Declaration,
including the right to direct the Property Trustee, as the holder of the
Debentures, to (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or exercising any
trust or power conferred on the Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 6.06 of
the Indenture, or (iii) exercise any right to rescind or annul a declaration
that the principal of all the Debentures shall be due and payable; provided that
where the taking of any action under the Indenture requires the consent or vote
of (1) holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of Debentures,
the Property Trustee may only take such action if directed by, in the case of
clause (1) above, the vote of Holders of Preferred Securities representing such
specified percentage of the aggregate liquidation amount of the Preferred
Securities, or, in the case of clause (2) above, each Holder of Preferred
Securities. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Preferred Securities.
Other than with respect to directing the time, method and place of conducting
any proceeding for any remedy available to the Property Trustee or the Debenture
Trustee as set forth above, the Property Trustee shall be under no obligation to
take any of the foregoing actions at the direction of the Holders of Preferred
Securities unless the Property Trustee shall have received, at the expense of
the Sponsor, an opinion of nationally recognized independent tax counsel
recognized as expert in such matters to the effect that the Trust will not be
classified for United States federal income tax purposes as an association
taxable as a corporation or a partnership on account of such action and will be
treated as a grantor trust for United States federal income tax purposes
following such action. If the Property Trustee fails to enforce its rights under
the Declaration (including, without limitation, its rights, powers and
privileges
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as a holder of the Debentures under the Indenture), any Holder of Preferred
Securities may, to the extent permitted by law, after a period of 30 days has
elapsed from such Holder's written request to the Property Trustee to enforce
such rights, institute a legal proceeding directly against AES to enforce the
Property Trustee's rights under the Declaration, without first instituting a
legal proceeding against the Property Trustee or any other Person.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Sponsor to pay
interest or principal on the Debentures on the date such interest or principal
is otherwise payable (or in the case of redemption, on the redemption date),
then the registered holder of the Preferred Securities may directly institute a
proceeding for enforcement of payment to such holder of the principal of or
interest on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such Holder (a "Holder Direct
Action") on or after the respective due date specified in the Debentures. In
connection with such Holder Direct Action, the Sponsor will be subrogated to the
rights of such Holder of Preferred Securities under the Declaration to the
extent of any payment made by the Sponsor to such Holder of Preferred Securities
in such Holder Direct Action. Except as provided in the preceding sentences, the
holders of Preferred Securities will not be able to exercise any other remedy
available to the holders of the Debentures.
A waiver of an Indenture Event of Default by the Property Trustee at the
direction of the Holders of the Preferred Securities will constitute a waiver of
the corresponding Event of Default under the Declaration in respect of the
Securities.
Any required approval or direction of Holders of Preferred Securities may
be given at a separate meeting of Holders of Preferred Securities convened for
such purpose, at a meeting of all of the Holders of Securities of the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of Preferred Securities will be required
for the Trust to redeem and cancel Preferred Securities or distribute
Debentures in accordance with the Declaration.
Notwithstanding that Holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities at such time that are owned by AES or by any entity directly or
indirectly
14
<PAGE> 74
controlling or controlled by or under direct or indirect common control with AES
shall not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
Except as provided in this paragraph 6, Holders of the Preferred
Securities will have no rights to increase or decrease the number of Trustees or
to appoint, remove or replace a Trustee, which voting rights are vested solely
in the Holders of the Common Securities.
7. Pro Rata Treatment. A reference in these terms of the Preferred
Securities to any payment, distribution or treatment as being "Pro Rata" shall
mean pro rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Securities outstanding unless, in
relation to a payment, an Event of Default has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the Preferred Securities pro rata according to the aggregate
liquidation amount of Preferred Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Preferred Securities outstanding, and
only after satisfaction of all amounts owed to the Holders of the Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
8. Ranking. The Preferred Securities rank pari passu and payment thereon
will be made Pro Rata with the Common Securities except that where an Event of
Default occurs and is continuing, the rights of Holders of Preferred Securities
to payment in respect of Distributions and payments upon liquidation, redemption
or otherwise rank in priority to the rights of Holders of the Common Securities.
9. Mergers, Consolidations or Amalgamations. The Trust may not
consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets to, any corporation or other entity.
10. Transfer, Exchange, Method of Payments. Payment of Distributions and
payments on redemption of the Preferred Securities will be payable, the transfer
of the Preferred Securities will be registrable, and Preferred Securities will
be exchangeable for Preferred Securities of other denominations of a like
aggregate liquidation amount, at the principal corporate trust office of the
Property Trustee in The City of New York; provided that payment of Distributions
may be made at the option of the Regular Trustees on behalf of the Trust by
check mailed to the address of the persons entitled thereto and that the payment
on redemption of any Preferred Security will be made only upon surrender of such
Preferred Security to the Property Trustee.
15
<PAGE> 75
11. Acceptance of Indenture and Preferred Guarantee. Each Holder of
Preferred Securities, by the acceptance thereof, agrees to the provisions of (i)
the Preferred Guarantee, including the subordination provisions therein and (ii)
the Indenture and the Debentures, including the subordination provisions of the
Indenture.
12. No Preemptive Rights. The Holders of Preferred Securities shall have
no preemptive rights to subscribe to any additional Preferred Securities or
Common Securities.
13. Miscellaneous. These terms shall constitute a part of the Declaration.
The Trust will provide a copy of the Declaration and the Indenture to a Holder
without charge on written request to the Trust at its principal place of
business.
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<PAGE> 76
Annex I
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - This
Preferred Security is a Global Certificate within the meaning of the Declaration
hereinafter referred to and is registered in the name of The Depository Trust
Company ("DTC") or a nominee of DTC. This Preferred Security is exchangeable for
Preferred Securities registered in the name of a person other than DTC or its
nominee only in the limited circumstances described in the Declaration and no
transfer of this Preferred Security (other than a transfer of this Preferred
Security as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or
another nominee of DTC) may be registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
the Trust or its agent for registration of transfer, exchange or payment, and
any Preferred Security issued is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.]
Number___________ ___________ Preferred Securities
CUSIP NO. ____________
Certificate Evidencing Preferred Securities
of
AES Trust I
$________ Term Convertible Securities, Series A
(liquidation amount $50 per security)
AES Trust I, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that _________ (the "Holder")
is the registered owner of _____ (______) preferred securities of the Trust
representing
<PAGE> 77
undivided beneficial interests in the assets of the Trust designated the $______
Term Convertible Securities (liquidation amount $50 per security) (the
"Preferred Securities"). The Preferred Securities are transferable on the books
and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer. The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities are set forth in, and this certificate
and the Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Declaration of Trust of the Trust dated as of March __, 1997, as the same may be
amended from time to time (the "Declaration") including the designation of the
terms of Preferred Securities as set forth in Exhibit B thereto. The Preferred
Securities and the Common Securities issued by the Trust pursuant to the
Declaration represent undivided beneficial interests in the assets of the Trust,
including the Debentures (as defined in the Declaration) issued by The AES
Corporation, a Delaware corporation ("AES"), to the Trust pursuant to the
Indenture referred to in the Declaration. The Holder is entitled to the benefits
of the Guarantee Agreement of AES dated as of March __, 1997 (the "Guarantee")
to the extent provided therein. The Trust will furnish a copy of the
Declaration, the Guarantee and the Indenture to the Holder without charge upon
written request to the Trust at its principal place of business or registered
office.
The Holder of this Certificate, by accepting this Certificate, is deemed
to have (i) agreed to the terms of the Indenture and the Debentures, including
that the Debentures are subordinate and junior in right of payment to all Senior
and Subordinated Debt (as defined in the Indenture) as and to the extent
provided in the Indenture and (ii) agreed to the terms of the Guarantee,
including that the Guarantee is subordinate and junior in right of payment to
all other liabilities of AES, including the Debentures, and ranks pari passu in
right payment with the most senior preferred stock issued, from time to time, by
AES.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
2
<PAGE> 78
IN WITNESS WHEREOF, the Trustees of the Trust have executed this
certificate this ____ day of March, 1997.
AES TRUST I
By:_________________________, as Trustee
Name:
Title: Trustee
By:_________________________, as Trustee
Name:
Title: Trustee
Dated:
Countersigned and Registered:
Transfer Agent and Registrar
By:___________________________
Authorized Signature
3
<PAGE> 79
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate
per annum of ___ % (the "Coupon Rate") of the stated liquidation amount of $50
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarter will bear interest thereon at the rate per annum of __% thereof
(to the extent permitted by law) compounded quarterly. The term "Distributions"
as used herein means such cash distributions and any such interest payable
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Property Trustee. The
amount of Distributions payable for any period will be computed for any
quarterly Distribution period on the basis of a 360-day year of twelve 30-day
months.
Except as otherwise described below, distributions on the Preferred
Securities will be cumulative, will accrue from _________, 1997 and will be
payable quarterly in arrears, on the last day of each quarter, commencing on
________, 1997, but only if and to the extent that interest payments are made in
respect of the Debentures held by the Property Trustee. So long as AES shall not
be in default in the payment of interest on the Debentures, AES has the right
under the Indenture for the Debentures to defer payments of interest by
extending the interest payment period from time to time on the Debentures for a
period not exceeding 20 consecutive quarters (each an "Extension Period") and,
as a consequence, quarterly Distributions will continue to accrue with interest
thereon (to the extent permitted by applicable law) at the rate of __% per
annum, compounded quarterly during such Extension period; provided that no
Extension Period shall last beyond the date of maturity or any redemption date
of the Debentures. Prior to the termination of any such Extension Period, AES
may commence a new Extension Period; provided that such Extension Period
together with all such previous and further extensions thereof may not exceed 20
consecutive quarterly interest periods. Payments of accrued Distributions will
be payable to Holders as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period. Upon the
termination of any Extension Period and the payment of all amounts then due, AES
may commence a new Extension Period, subject to the above requirements.
The Preferred Securities shall be redeemable as provided in the
Declaration.
The Preferred Securities shall be convertible into shares of Common Stock,
through (i) the exchange of Preferred Securities for a portion of the Debentures
and (ii) the immediate conversion of such Debentures into Common Stock, in the
manner and according to the terms set forth in the Declaration.
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<PAGE> 80
CONVERSION REQUEST
To: The First National Bank of Chicago as Property Trustee of AES Trust I
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into common stock of The AES Corporation (the "Common Stock") in
accordance with the terms of the Amended and Restated Declaration of Trust,
dated as of March __, 1997 (as amended from time to time, the "Declaration"), by
William R. Luraschi, Barry J. Sharp and Willard Hoagland as Regular Trustees,
First Chicago Delaware Inc., as Delaware Trustee, The First National Bank of
Chicago, as Property Trustee, The AES Corporation, as Sponsor, and by the
Holders, from time to time, of undivided beneficial interests in the assets of
the Trust to be issued pursuant to the Declaration. Pursuant to the
aforementioned exercise of the option to convert these Preferred Securities, the
undersigned hereby directs the Conversion Agent (as that term is defined in the
Declaration) to (i) exchange such Preferred Securities for a portion of the
Debentures (as that term is defined in the Declaration) held by the Trust (at
the rate of exchange specified in the terms of the Preferred Securities set
forth as Exhibit B to the Declaration) and (ii) immediately convert such
Debentures on behalf of the undersigned, into Common Stock (at the conversion
rate specified in the terms of the Trust Preferred Securities set forth as
Exhibit B to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
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<PAGE> 81
Date: _______________, _____
in whole ___ in part ___
Number of Preferred Securities to be converted:
_______________________
If a name or names other than the undersigned, please
indicate in the spaces below the name or names in
which the shares of Common Stock are to be issued,
along with the address or addresses of such person or
persons
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
Signature (for conversion only)
Please Print or Typewrite Name and Address, Including Zip
Code, and Social Security or Other Identifying Number
__________________________________
__________________________________
__________________________________
Signature Guarantee:** _________
- --------
(2) (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the
6
<PAGE> 82
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert assignee's social security or tax identification number)
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
____________________________________________________________
____________________________________________________________
____________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: _________________________
Signature: ____________________
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER.
- ----------
requirements of the Conversion Agent, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Conversion
Agent in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
7
<PAGE> 83
EXHIBIT C
TERMS OF
COMMON SECURITIES
Pursuant to Section 7.01 of the Amended and Restated Declaration of Trust
of AES Capital Trust I dated as of March __, 1997 (as amended from time to time,
the "Declaration"), the designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities are set
forth below (each capitalized term used but not defined herein having the
meaning set forth in the Declaration):
1. Designation and Number. Common Securities of the Trust with an
aggregate liquidation amount in the assets of the Trust of ____________________
Dollars ($____________) and a liquidation amount in the assets of the Trust of
$50 per Common Security, are hereby designated as "____% Common Trust
Securities". The Common Security Certificates evidencing the Common Securities
shall be substantially in the form attached hereto as Annex I, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice. The Common Securities are to be issued and sold to
The AES Corporation ("AES") in consideration of $_____________ in cash. In
connection with the issuance and sale of the Preferred Securities and the Common
Securities, the Trust will purchase as trust assets Debentures of AES having an
aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities and Common Securities so issued, and bearing interest at an
annual rate equal to the annual Distribution rate on the Preferred Securities
and Common Securities and having payment and redemption provisions which
correspond to the payment and redemption provisions of the Preferred Securities
and Common Securities.
2. Distributions. (a) Distributions payable on each Common Security will
be fixed at a rate per annum of ____% (the "Coupon Rate") of the stated
liquidation amount of $50 per Common Security. Distributions in arrears for more
than one calendar quarter will bear interest at the rate per annum of ____%
thereof (to the extent permitted by applicable law), compounded quarterly. The
term "Distributions" as used in these terms means such periodic cash
distributions and any such interest payable unless otherwise stated. A
Distribution will be made by the Property Trustee only to the extent that
interest payments are made in respect of the Debentures held by the Property
Trustee. The amount of Distributions payable
<PAGE> 84
for any period will be computed for any monthly Distribution period on the basis
of a 360-day year of twelve 30 day months.
(b) Distributions on the Common Securities will be cumulative, will accrue
from _________, 1997 and will be payable quarterly in arrears, on the last day
of each month commencing on __________, 1997, except as otherwise described
below, but only if and to the extent that interest payments are made in respect
of the Debentures held by the Property Trustee. So long as AES shall not be in
default in the payment of interest on the Debentures, AES has the right under
the Indenture for the Debentures to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding 20 consecutive quarterly interest periods (each, an "Extension
Period") and, as a consequence, quarterly Distributions will continue to accrue
with interest thereon (to the extent permitted by applicable law) at the rate of
____% per annum, compounded quarterly during any such Extension Period; provided
that no Extension Period shall last beyond the date of maturity or any
redemption date of the Debentures. Prior to the termination of any such
Extension Period, AES may further extend such Extension Period; provided that
such Extension Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarterly interest periods. Upon the
termination of any Extension Period and the payment of all amounts then due, AES
may commence a new Extension Period, subject to the above requirements. Payments
of accrued Distributions will be payable to Holders of Common Securities as they
appear on the books and records of the Trust on the first record date after the
end of the Extension Period.
(c) Distributions on the Common Securities will be payable promptly by the
Property Trustee (or other Paying Agent) upon receipt of immediately available
funds to the Holders thereof as they appear on the books and records of the
Trust on the relevant record dates which will be one business day prior to the
relevant Distribution date unless the Preferred Securities are no longer in
book-entry only form in which event the relevant record dates will be the
fifteenth (15th) day of the month in which the relevant Distribution date
occurs, which record and payment dates correspond to the record and interest
payment dates on the Debentures. Distributions payable on any Common Securities
that are not punctually paid on any Distribution date as a result of AES having
failed to make the corresponding interest payment on the Debentures will
forthwith cease to be payable to the person in whose name such Common Security
is registered on the relevant record date, and such defaulted Distribution will
instead be payable to the person in whose name such Common Security is
registered on the special record date established by the Regular Trustees, which
record date shall correspond to the special record date or other specified date
determined in accordance with the Indenture; provided, however, that
Distributions shall not be considered payable on any Distribution
2
<PAGE> 85
payment date falling within an Extension Period unless AES has elected to make a
full or partial payment of interest accrued on the Debentures on such
Distribution payment date. Subject to any applicable laws and regulations and
the provisions of the Declaration, each payment in respect of the Common
Securities will be made as described in paragraph 10 hereof. If any date on
which Distributions are payable on the Common Securities is not a Business Day,
then payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
(d) All Distributions paid with respect to the Common Securities and the
Preferred Securities will be paid Pro Rata to the Holders thereof entitled
thereto. If an Event of Default has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities with respect to
Distributions.
(e) In the event of an election by the Holder to convert its Securities
through the Conversion Agent into Common Stock pursuant to the terms of the
Securities as set forth in this Exhibit C to the Declaration no payment
allowance or adjustment shall be made with respect to accumulated and unpaid
Distributions on such Securities or be required to be made provided however
that if a Security is surrendered for conversion after the close of business on
any regular record date for payment of a Distribution and before the opening of
business on the corresponding Distribution date, then notwithstanding such
conversion, the Distribution payable on such Distribution date will be paid in
cash to the person in whose name the Security is registered at the close of
business on such record date and (other than a Security or a portion of a
Security called for redemption on a redemption date occurring after such record
date and on or prior to such Distribution date) when so surrendered for
conversion, the Security must be accompanied by payment of an amount equal to
the Distribution payable on such Distribution date.
(f) In the event that there is any money or other property held by or for
the Trust that is not accounted for under the Declaration, such money or
property shall be distributed Pro Rata among the Holders of the Preferred
Securities and Common Securities.
3. Liquidation Distribution Upon Dissolution. In the event of any
voluntary or involuntary dissolution, winding-up or termination of the Trust,
the Holders of the Preferred Securities and Common Securities at the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive Pro Rata solely out of the assets of the Trust available for
distribution to Holders of Preferred Securities and Common Securities, after
satisfaction of liabilities to creditors, an amount equal to the aggregate of
the stated liquidation amount of $50 per Preferred Security and Common Security
plus accrued and unpaid Distributions thereon to the date of payment (such
amount being the "Liquidation Distribution"), unless, in connection with such
dissolution, winding-up or termination, and after satisfaction of liabilities to
creditors, Debentures in an aggregate principal amount equal to the aggregate
stated liquidation amount of such Preferred Securities and Common Securities
bearing accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on, such Preferred Securities and Common Securities, shall be
distributed Pro Rata to the Holders of the Preferred Securities and Common
Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the
3
<PAGE> 86
Preferred Securities and Common Securities shall be paid, subject to the next
paragraph, on a Pro Rata basis.
Holders of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution Pro Rata with Holders of Preferred
Securities, except that if an Event of Default has occurred and is continuing,
the Preferred Securities shall have a priority over the Common Securities with
respect to such Liquidation Distribution.
4. Redemption and Distribution of Debentures. The Preferred Securities and
Common Securities may only be redeemed if Debentures having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities and Common Securities are repaid, redeemed or distributed as set
forth below:
(a) Upon the repayment of the Debentures, in whole or in part, whether at
maturity, upon redemption at any time or from time to time on or after
__________, 1997, the proceeds of such repayment will be promptly applied to
redeem Pro Rata Preferred Securities and Common Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Debentures so
repaid or redeemed, upon not less than 30 nor more than 60 days' notice, at a
redemption price per Preferred and Common Security equal to the redemption price
of the Debentures, together with accrued and unpaid Distributions thereon
through the date of redemption, payable in cash (the "Redemption Price"). The
date of any such repayment or redemption of Preferred Securities and Common
Securities shall be established to coincide with the repayment or redemption
date of the Debentures.
(b) If fewer than all the outstanding Preferred Securities and Common
Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed Pro Rata and the Common Securities to be redeemed
will be redeemed as described in paragraph 4(e)(ii) below. If a partial
redemption would result in the delisting of the Preferred Securities by any
national securities exchange or other organization on which the Preferred
Securities are then listed, AES pursuant to the Indenture will only redeem
Debentures in whole and, as a result, the Trust may only redeem the Common
Securities in whole.
(c) If, at any time, a Tax Event or an Investment Company Event (each as
hereinafter defined, and each a "Special Event") shall occur and be continuing,
the Regular Trustees shall, unless the Debentures are redeemed in the limited
circumstances described below, dissolve the Trust and, after satisfaction of
creditors, cause Debentures held by the Property Trustee having an aggregate
principal amount equal to the aggregate stated liquidation amount of and accrued
4
<PAGE> 87
and unpaid interest equal to accrued and unpaid Distributions on, and having the
same record date for payment as the Preferred Securities and Common Securities,
to be distributed to the Holders of the Preferred Securities and Common
Securities on a Pro Rata basis in liquidation of such Holders' interests in the
Trust, within 90 days following the occurrence of such Special Event (the "90
Day Period"); provided, however, that in the case of the occurrence of a Tax
Event, as a condition of such dissolution and distribution, the Regular Trustees
shall have received an opinion of a nationally recognized independent tax
counsel experienced in such matters (a "No Recognition Opinion"), which opinion
may rely on any then applicable published revenue rulings of the Internal
Revenue Service, to the effect that the Holders of the Preferred Securities will
not recognize any gain or loss for United States federal income tax purposes as
a result of the dissolution of the Trust and distribution of Debentures; and
provided, further, that, if and as long as at the time there is available to the
Trust the opportunity to eliminate, within such 90 Day Period, the Special Event
by taking some ministerial action, such as filing a form or making an election,
or pursuing some other similar reasonable measure that has no adverse effect on
the Trust, AES or the Holders of the Preferred Securities ("Ministerial Action")
the Trust will pursue such measure in lieu of dissolution.
If in the case of the occurrence of a Tax Event, (i) the Regular Trustees
have received an opinion (a "Redemption Tax Opinion") of nationally recognized
independent tax counsel experienced in such matters that, as a result of a Tax
Event, there is more than an insubstantial risk that AES would be precluded from
deducting the interest on the Debentures for United States federal income tax
purposes even if the Debentures were distributed to the Holders of Preferred
Securities and Common Securities in liquidation of such Holder's interest in the
Trust as described in this paragraph 4(c) or (ii) the Regular Trustees shall
have been informed by such tax counsel that a No Recognition Opinion cannot be
delivered to the Trust, AES shall have the right at any time, upon not less than
30 nor more than 60 days' notice, to redeem the Debentures in whole or in part
for cash at the Redemption Price within 90 days following the occurrence of such
Tax Event, and promptly following such redemption Preferred Securities and
Common Securities with an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so redeemed will be redeemed by the Trust at
the Redemption Price on a Pro Rata basis: provided, however, that, if at the
time there is available to AES or the Regular Trustees on behalf of the Trust
the opportunity to eliminate, within such 90 day period, the Tax Event by taking
some Ministerial Action, AES or the Holders of the Preferred Securities, AES or
the Regular Trustees on behalf of the Trust will pursue such measure in lieu of
redemption; and provided, further, that AES shall have no right to redeem the
Debentures while the Regular Trustees on behalf of the Trust are pursuing such
Ministerial Action. The Common Securities will be redeemed Pro Rata with the
Preferred Securities, except that if an Event of
5
<PAGE> 88
Default under the Indenture has occurred and is continuing, the Preferred
Securities will have a priority over the Common Securities with respect to
payment of the Redemption Price.
"Tax Event" means that the Regular Trustees shall have obtained an opinion
of nationally recognized independent tax counsel experienced in such matters (a
"Dissolution Tax Opinion") to the effect that on or after __________, 1997 as a
result of (a) any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, (b) any amendment
to, or change in, an interpretation or application of any such laws or
regulations by any legislative body, court, governmental agency or regulatory
authority (including the enactment of any legislation and the publication of any
judicial decision or regulatory determination), (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the theretofore generally accepted position or (d)
any action taken by any governmental agency or regulatory authority, which
amendment or change is enacted, promulgated, issued or announced or which
interpretation or pronouncement is issued or announced or which action is taken,
in each case on or after __________, 1997, there is more than an insubstantial
risk that (i) the Trust is, or will be within 90 days of the date thereof,
subject to United States federal income tax with respect to income accrued or
received on the Debentures, (ii) the Trust is, or will be within 90 days of the
date thereof, subject to more than a de minimis amount of taxes, duties or other
governmental charges or (iii) interest payable by AES to the Trust on the
Debentures is not, or within 90 days of the date thereof will not be, deductible
by AES for United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of nationally recognized independent counsel experienced in
practice under the Investment Company Act that, as a result of the occurrence of
a change in law or regulation or a change in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority (a "Change in 1940 Act Law"), there is more than an
insubstantial risk that the Trust is or will be considered an Investment Company
which is required to be registered under the Investment Company Act, which
Change in 1940 Act Law becomes effective on or after __________, 1997.
On the date fixed for any distribution of Debentures, upon dissolution of
the Trust, (i) the Common Securities will no longer be deemed to be outstanding
and (ii) any certificates representing Common Securities will be deemed to
represent beneficial interests in the Debentures having an aggregate principal
amount equal to the stated liquidation amount of, and bearing accrued and unpaid
interest equal to
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<PAGE> 89
accrued and unpaid Distributions on, such Common Securities until such
certificates are presented to AES or its agent for transfer or reissuance.
(d) The Trust may not redeem any outstanding Common Securities unless all
accrued and unpaid Distributions have been paid on all Common Securities for all
quarterly Distribution periods terminating on or prior to the date of
redemption.
(e)(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Preferred Securities and Common Securities (a
"Redemption/ Distribution Notice") will be given by the Regular Trustees on
behalf of the Trust by mail to each Holder of Preferred Securities and Common
Securities to be redeemed or exchanged not less than 30 nor more than 60 days
prior to the date fixed for redemption or exchange thereof. For purposes of the
calculation of the date of redemption or exchange and the dates on which notices
are given pursuant to this paragraph (e)(i), a Redemption/Distribution Notice
shall be deemed to be given on the day such notice is first mailed by
first-class mail, postage prepaid, to Holders of Preferred Securities and Common
Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of Preferred Securities and Common Securities at the address of each
such Holder appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with respect
to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Common Securities
are to be redeemed, the Common Securities to be redeemed will be redeemed Pro
Rata from each Holder of Common Securities (subject to adjustment to eliminate
fractional Common Securities).
(iii) If the Trust gives a Redemption/Distribution Notice in respect of a
redemption of Common Securities as provided in this paragraph 4 (which notice
will be irrevocable) then immediately prior to the close of business on the
redemption date, provided that AES has paid to the Property Trustee in
immediately available funds a sufficient amount of cash in connection with the
related redemption or maturity of the Debentures, Distributions will cease to
accrue on the Common Securities called for redemption, such Common Securities
will no longer be deemed to be outstanding and all rights of Holders of such
Common Securities so called for redemption will cease, except the right of the
Holders of such Common Securities to receive the Redemption Price, but without
interest on such Redemption Price. Neither the Trustees nor the Trust shall be
required to register or cause to be registered the transfer of any Common
Securities which have been so called for redemption. If any date fixed for
redemption of Common Securities is
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<PAGE> 90
not a Business Day, then payment of the Redemption Price payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption. If payment of the Redemption Price
in respect of Common Securities is improperly withheld or refused and not paid
by the Property Trustee, Distributions on such Common Securities will continue
to accrue, from the original redemption date to the date of payment, in which
case the actual payment date will be considered the date fixed for redemption
for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular Trustees
on behalf of the Trust to the Holders of the Common Securities.
(v) Upon the date of dissolution of the Trust and distribution of
Debentures as a result of the occurrence of a Special Event, Common Security
Certificates shall be deemed to represent beneficial interests in the Debentures
so distributed, and the Common Securities will no longer be deemed outstanding
and may be canceled by the Regular Trustees. The Debentures so distributed shall
have an aggregate principal amount equal to the aggregate liquidation amount of
the Common Securities so distributed.
5. Conversion Rights.
The Holders of Securities shall have the right at any time prior to the
close of business on , 2027 (or, in the case of Securities called for
redemption, prior to the close of business on the Business Day prior to the
redemption date), at their option, to cause the Conversion Agent to convert
Securities, on behalf of the converting Holders, into shares of Common Stock in
the manner described herein on and subject to the following terms and
conditions:
The Securities will be convertible at the office of the Conversion Agent
into fully paid and nonassessable shares of Common Stock pursuant to the
Holder's direction to the Conversion Agent to exchange such Securities for a
portion of the Debentures theretofore held by the Trust on the basis of one
Security per $__ principal amount of Debentures, and immediately convert such
amount of Debentures into fully paid and nonassessable shares of Common Stock at
an initial rate of _ shares of Common Stock per $__ principal amount of
Debentures (which is equivalent to a conversion price of per share of Common
Stock, subject to certain adjustments set forth in Sections 5.03 and 5.04 of the
Supplemental Indenture (as so adjusted, "Conversion Price")).
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<PAGE> 91
(a) In order to convert Securities into Common Stock the Holder shall
submit to the Conversion Agent at the office referred to above an irrevocable
request to convert Securities on behalf of such Holder (the "Conversion
Request"), together, if the Securities are in certificated form, with such
certificates. The Conversion Request shall (i) set forth the number of
Securities to be converted and the name or names, if other than the Holder, in
which the shares of Common Stock should be issued and (ii) direct the Conversion
Agent (a) to exchange such Securities for a portion of the Debentures held by
the Trust (at the rate of exchange specified in the preceding paragraph) and (b)
to immediately convert such Debentures on behalf of such Holder, into Common
Stock (at the conversion rate specified in the preceding paragraph). The
Conversion Agent shall notify the Property Trustee of the Holder's election to
exchange Securities for a portion of the Debentures held by the Trust and the
Property Trustee shall, upon receipt of such notice, deliver to the Conversion
Agent the appropriate principal amount of Debentures for exchange in accordance
with this Section. The Conversion Agent shall thereupon notify the Property
Trustee of the Holder's election to convert such Debentures into shares of
Common Stock. If a Security is surrendered for conversion after the close of
business on any regular record date for payment of a Distribution and before the
opening of business on the corresponding Distribution payment date, then,
notwithstanding such conversion, the Distribution payable on such Distribution
payment date will be paid in cash to the person in whose name the Security is
registered at the close of business on such record date, and (other than a
Security or a portion of a Security called for redemption on a redemption date
occurring after such record date and on or prior to such Distribution payment
date) when so surrendered for conversion, the Security must be accompanied by
payment of an amount equal to the Distribution payable on such Distribution
payment date. Except as provided above, neither the Trust nor the Sponsor will
make, or be required to make, any payment, allowance or adjustment upon any
conversion on account of any accumulated and unpaid Distributions accumulated on
the Securities surrendered for conversion, or on account of any accumulated and
unpaid dividends on the shares of Common Stock issued upon such conversion.
Securities shall be deemed to have been converted immediately prior to the close
of business on the day on which a Notice of Conversion relating to such
Securities is received by the Trust in accordance with the foregoing provision
(the "Conversion Date"). The Person or Persons entitled to receive Common Stock
issuable upon conversion of the Debentures shall be treated for all purposes as
the record holder or holders of such Common Stock at such time. As promptly as
practicable on or after the Conversion Date, the Sponsor shall issue and deliver
at the office of the Conversion Agent a certificate or certificates for the
number of full shares of Common Stock issuable upon such conversion, together
with the cash payment, if any, in lieu of any fraction of any share to the
Person or Persons entitled to receive the same, unless otherwise directed by the
Holder in the Notice of Conversion and
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the Conversion Agent shall distribute such certificate or certificates, together
with the applicable cash payment, if any, to such Person or Persons.
(b) Each Holder of a Security by his acceptance thereof appoints _________
"Conversion Agent" for the purpose of effecting the conversion of Securities in
accordance with this Section. In effecting the conversion and transactions
described in this Section, the Conversion Agent shall be acting as agent of the
Holders of Securities directing it to effect such conversion transactions. The
Conversion Agent is hereby authorized (i) to exchange Securities from time to
time for Debentures held by the Trust in connection with the conversion of such
Securities in accordance with this section and (ii) to convert all or a portion
of the Debentures into Common Stock and thereupon to deliver such shares of
Common Stock in accordance with the provisions of this section and to deliver to
the Trust a new Debenture or Debentures for any resulting unconverted principal
amount.
(c) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid in cash
by the Company to the Conversion Agent, which in turn will make such payment to
the Holder or Holders of Securities so converted.
(d) The Sponsor shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for issuance upon the conversion of
the Debentures, free from any preemptive or other similar rights, such number of
shares of Common Stock as shall from time to time be issuable upon the
conversion of all the Debentures then outstanding. Notwithstanding the
foregoing, shall be entitled to deliver upon conversion of Debentures, shares of
Common Stock reacquired and held in the treasury of the Sponsor (in lieu of the
issuance of authorized and unissued shares of Common Stock), so long as any such
treasury shares are free and clear of all liens, charges, security interests or
encumbrances. Any shares of Common Stock issued upon conversion of the
Debentures shall be duly authorized, validly issued and fully paid and
nonassessable. The Trust shall deliver the shares of Common Stock received upon
conversion of the Debentures to the converting Holder free and clear of all
liens, charges, security interests and encumbrances, except for United States
withholding taxes. Each of the Sponsor and the Trust shall prepare and shall use
its best efforts to obtain and keep in force such governmental or regulatory
permits or other authorizations as may be required by law, and shall comply with
all applicable requirements as to registration or qualification of Common Stock
(and all requirements to list Common Stock issuable upon conversion of
Debentures that are at the time applicable), in order to enable the company to
lawfully issue Common Stock to the Trust upon conversion of the Debentures and
the Trust to lawfully deliver Common Stock to each Holder upon conversion of the
Securities.
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(e) The Sponsor will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of Common Stock on conversion of Debentures
and the delivery of the shares of Common Stock by the Trust upon conversion of
the Securities. The Sponsor shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery of
shares of Common Stock in a name other than that in which the Securities so
converted were registered, and no such issue or delivery shall be made unless
and until the person requesting such issue has paid to the Trust the amount of
any such tax, or has established to the satisfaction of the Trust that such tax
has been paid.
(f) Nothing in the preceding Paragraph (e) shall limit the requirement of
the Trust to withhold taxes pursuant to the terms of the Securities or set forth
in this Exhibit C to the Declaration or to the Declaration itself or otherwise
require the Property Trustee or the Trust to pay any amounts on account of such
withholdings.
6. Voting Rights. (a) Except as provided under paragraph 5(b) below and as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) Holders of Common Securities have the sole right under the Declaration
to increase or decrease the number of Trustees, and to appoint, remove or
replace a Trustee, any such increase, decrease, appointment, removal or
replacement to be approved by Holders of Common Securities representing a
Majority in liquidation amount of the Common Securities.
If any proposed amendment to the Declaration provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of the Securities, whether by way of
amendment to the Declaration or otherwise, or (ii) the dissolution, winding-up
or termination of the Trust, other than in connection with the distribution of
Debentures held by the Property Trustee, upon the occurrence of a Special Event
or in connection with the redemption of Common Securities as a consequence of a
redemption of Debentures, then the Holders of outstanding Securities will be
entitled to vote on such amendment or proposal as a class and such amendment or
proposal shall not be effective except with the approval of the Holders of
Securities representing a Majority in liquidation amount of such Securities;
provided, however, that (A) if any amendment or proposal referred to in clause
(i) above would adversely affect only the Preferred Securities or the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities, (B) the rights of Holders of Common Securities under Article 4.02 of
the Declaration to increase or decrease
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<PAGE> 94
the number of, and to appoint, replace or remove, Trustees shall not be amended
without the consent of each Holder of Common Securities, and (C) amendments to
the Declaration shall be subject to such further requirements as are set forth
in Sections 12.01 and 12.02 of the Declaration.
In the event the consent of the Property Trustee as the holder of the
Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders of the Securities
with respect to such amendment, modification or termination. The Property
Trustee shall vote with respect to such amendment, modification or termination
as directed by a Majority in liquidation amount of the Securities voting
together as a single class; provided that where such amendment, modification or
termination of the Indenture requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than a majority in
principal amount of the Debentures or (2) each holder of Debentures, the
Property Trustee may only vote with respect to that amendment, modification or
termination as directed by, in the case of clause (1) above, the vote of Holders
of Securities representing such specified percentage of the aggregate
liquidation amount of the Securities, or, in the case of clause (2) above, each
Holder of Securities; and provided, further, that the Property Trustee shall be
under no obligation to take any action in accordance with the directions of the
Holders of the Securities unless the Property Trustee shall have received, at
the expense of the Sponsor, an opinion of nationally recognized independent tax
counsel recognized as an expert in such matters to the effect that the Trust
will not be classified for United States federal income tax purposes as an
association taxable as a corporation or a partnership on account of such action
and will be treated as a grantor trust for United States federal income tax
purposes following such action.
Subject to Section 2.06 of the Declaration, and the provisions of this and
the next succeeding paragraph, the Holders of a Majority in liquidation amount
of the Common Securities, voting separately as a class shall have the right to
(A) on behalf of all Holders of Common Securities, waive any past default that
is waivable under the Declaration (subject to, and in accordance with the
Declaration) and (B) direct the time, method, and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under the Declaration,
including the right to direct the Property Trustee, as holder of the Debentures,
to (i) direct the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee, or exercising any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii) waive
any past default and its consequences that is waivable under Section 6.06 of the
Indenture, or (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and
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<PAGE> 95
payable; provided that where the taking of any action under the Indenture
requires the consent or vote of (1) holders of Debentures representing a
specified percentage greater than a majority in principal amount of the
Debentures or (e) each holder of Debentures, the Property Trustee may only take
such action if directed by, in the case of clause (1) above, the vote of Holders
of Common Securities representing such specified percentage of the aggregate
liquidation amount of the Common Securities, or, in the case of clause (2)
above, each Holder of Common Securities. Pursuant to this paragraph, the
Property Trustee shall not revoke, or take any action inconsistent with, any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities, and shall not take any action in accordance with the
direction of the Holders of the Common Securities under this paragraph if the
action is prejudicial to the Holders of Preferred Securities. Other than with
respect to directing the time, method and place of conducting any proceeding for
any remedy available to the Property Trustee or the Debenture Trustee as set
forth above, the Property Trustee shall be under no obligation to take any of
the foregoing actions at the direction of the Holders of Common Securities
unless the Properties Trustee shall have received, at the expense of the
Sponsor, an opinion of nationally recognized independent tax counsel recognized
as expert in such matters to the effect that the Trust will not be classified
for United States federal income tax purposes as an association taxable as a
corporation or a partnership on account of such action and will be treated as a
grantor trust for United States income tax purposes following such action.
Notwithstanding any other provision of these terms, each Holder of Common
Securities will be deemed to have waived any Event of Default with respect to
the Common Securities and its consequences until all Events of Default with
respect to the Preferred Securities have been cured, waived by the Holders of
Preferred Securities as provided in the Declaration or otherwise eliminated, and
until all Events of Default with respect to the Preferred Securities have been
so cured, waived by the Holders of Preferred Securities or otherwise eliminated,
the Property Trustee will be deemed to be acting solely on behalf of the Holders
of Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Declaration or of the Securities. In the event that any Event of Default
with respect to the Preferred Securities is waived by the Holders of Preferred
Securities as provided in the Declaration, the Holders of Common Securities
agree that such waiver shall also constitute the waiver of such Event of Default
with respect to the Common Securities for all purposes under the Declaration
without any further act, vote or consent of the Holders of the Common
Securities.
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<PAGE> 96
A waiver of an Indenture Event of Default by the Property Trustee at the
direction of the Holders of the Preferred Securities will constitute a waiver of
the corresponding Event of Default under the Declaration in respect of the
Securities.
Any required approval of Holders of Common Securities may be given at a
separate meeting of Holders of Common Securities convened for such purpose, at a
meeting of all of the Holders of Securities of the Trust or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed to each
Holder of record of Common Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the Holders of Common Securities will be required
for the Trust to redeem and cancel Common Securities in accordance with the
Declaration.
7. Pro Rata Treatment. A reference in these terms of the Common Securities
to any payment, distribution or treatment as being "Pro Rata" shall mean pro
rata to each Holder of Securities according to the aggregate liquidation amount
of the Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities outstanding unless, in relation to a
payment, an Event of Default has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
8. Ranking. The Common Securities rank pari passu and payment thereon will
be made Pro Rata with the Preferred Securities except that where an Event of
Default occurs and is continuing, the rights of Holders of Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption or
otherwise are subordinate to the rights of Holders of the Preferred Securities.
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<PAGE> 97
9. Mergers, Consolidations or Amalgamations. The Trust may not
consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets to, any corporation or other body.
10. Transfers, Exchanges, Method of Payments. Payment of Distributions and
payments on redemption of the Common Securities will be payable, the transfer of
the Common Securities will be registrable, and Common Securities will be
exchangeable for Common Securities of other denominations of a like aggregate
liquidation amount, at the principal corporate trust office of the Property
Trustee in The City of New York; provided that payment of Distributions may be
made at the option of the Regular Trustees on behalf of the Trust by check
mailed to the address of the persons entitled thereto and that the payment on
redemption of any Common Security will be made only upon surrender of such
Common Security to the Property Trustee. Notwithstanding the foregoing,
transfers of Common Securities are subject to conditions set forth in Section
9.01(c) of the Declaration.
11. Acceptance of Indenture. Each Holder of Common Securities, by the
acceptance thereof, agrees to the provisions of the Indenture and the
Debentures, including the subordination provisions thereof.
12. No Preemptive Rights. The Holders of Common Securities shall have no
preemptive rights to subscribe to any additional Common Securities or Preferred
Securities.
13. Miscellaneous. These terms shall constitute a part of the Declaration.
The Trust will provide a copy of the Declaration and the Indenture to a Holder
without charge on written request to the Trust at its principal place of
business.
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Annex I
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
______ __________
Certificate Evidencing Common Securities
of
AES Trust I
____% Common Trust Securities
(liquidation amount $50 per Common Security)
AES Trust I, a statutory business trust formed under the laws of the State
of Delaware (the "Trust"), hereby certifies that The AES Corporation (the
"Holder") is the registered owner of ____________________________ (_________)
common securities of the Trust representing undivided beneficial interests in
the assets of the Trust designated the "____% Common Trust Securities"
(liquidation amount $50 per security) (the "Common Securities"). The Common
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer and satisfaction of the other conditions set
forth in the Declaration (as defined below) including, without limitation
Section 9.01(c) thereof. The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities are set
forth in, and this certificate and the Common Securities represented hereby are
issued and shall in all respects be subject to the terms and provisions of, the
Amended and Restated Declaration of Trust of the Trust dated as of March __,
1997, as the same may be amended from time to time (the "Declaration") including
the designation of the terms of Common Securities as set
<PAGE> 99
forth in Exhibit C thereto. The Common Securities and the Preferred Securities
issued by the Trust pursuant to the Declaration represent undivided beneficial
interests in the assets of the Trust, including the Debentures (as defined in
the Declaration) issued by The AES Corporation, a Delaware corporation, to the
Trust pursuant to the Indenture referred to in the Declaration. The Trust will
furnish a copy of the Declaration and the Indenture to the Holder without charge
upon written request to the Trust at its principal place of business or
registered office.
The Holder of this Certificate, by accepting this Certificate, is deemed
to have agreed to the terms of the Indenture and the Debentures, including that
the Debentures are subordinate and junior in right of payment to all Senior Debt
(as defined in the Indenture) as and to the extent provided in the Indenture.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed this
certificate this ____ day of March, 1997.
AES TRUST I
By________________________, as Trustee
Name:
Title: Trustee
By_________________________, as Trustee
Name:
Title: Trustee
Dated:
Countersigned and Registered:
Transfer Agent and Registrar
By:___________________________
Authorized Signature
2
<PAGE> 100
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per
annum of ___ % (the "Coupon Rate") of the stated liquidation amount of $50 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Distributions in arrears for more than one
quarter will bear interest thereon at the rate per annum of __% thereof (to the
extent permitted by law) compounded monthly. The term "Distributions" as used
herein means such cash distributions and any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that payments are
made in respect of the Debentures held by the Property Trustee. The amount of
Distributions payable for any period will be computed for any monthly
Distribution period on the basis of a 360-day year of twelve 30-day months.
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from _________, 1997 and will be
payable quarterly in arrears, on the last day of each quarter, commencing on
________, 1997, but only if and to the extent that interest payments are made in
respect of the Debentures held by the Property Trustee. So long as AES shall not
be in default in the payment of interest on the Debentures, AES has the right
under the Indenture for the Debenture to defer payments of interest by extending
the interest payment period from time to time on the Debentures for a period not
exceeding 20 consecutive quarters (each an "Extension Period") and, as a
consequence, quarterly Distributions will continue to accrue with interest
thereon (to the intent permitted by applicable law) at the rate of __% per
annum, compounded quarterly during such Extension period; provided that no
Extension Period shall last beyond the date of maturity or any redemption date
of the Debentures. . Prior to the termination of any such Extension Period, AES
may commence a new Extension Period; provided that such Extension Period
together with all such previous and further extensions thereof may not exceed 20
consecutive quarterly interest periods. Payments of accrued Distributions will
be payable to Holders as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period. Upon the
termination of any Extension Period and the payment of all amounts then due, AES
may commence a new Extension Period, subject to the above requirements.
The Common Securities shall be redeemable as provided in the Declaration.
The Common Securities shall be convertible into shares of Common Stock,
through (i) the exchange of Common Securities for a portion of the Debentures
and (ii) the immediate conversion of such Debentures into Common Stock, in the
manner and according to the terms set forth in the Declaration.
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<PAGE> 101
CONVERSION REQUEST
To: The First National Bank of Chicago
as Property Trustee of AES Trust I
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock of The AES Corporation (the "Common Stock") in
accordance with the terms of the Amended and Restated Declaration of Trust dated
as of March __, 1997 (as amended from time to time, the "Declaration"), by
William R. Luraschi, Barry J. Sharp and Willard Hoagland, as Regular Trustees,
First Chicago Delaware Inc., as Delaware Trustee, The First National Bank of
Chicago as Property Trustee, The AES Corporation, as Sponsor, and by the
Holders, from time to time, of undivided beneficial interests in the assets of
the Trust to be issued pursuant to the Declaration. Pursuant to the
aforementioned exercise of the option to convert these Common Securities, the
undersigned hereby directs the Conversion Agent (as that term is defined in the
Declaration) to (i) exchange such Common Securities for a portion of the
Debentures (as that term is defined in the Declaration) held by the Trust (at
the rate of exchange specified in the terms of the Common Securities set forth
as Exhibit C to the Declaration) and (ii) immediately convert such Debentures on
behalf of the undersigned, into Common Stock (at the conversion rate specified
in the terms of the Common Securities set forth as Exhibit C to the
Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
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Date: _____________, _____
in whole ___in part ___
Number of Common Securities to be
converted: _______________
If a name or names other than the
undersigned, please indicate in the
spaces below the name or names in
which the shares of Common Stock are
to be issued, along with the address or
addresses of such person or persons
_________________________________
_________________________________
_________________________________
_________________________________
_________________________________
_________________________________
_________________________________
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and
Social Security or Other Identifying
Number
___________________________________
___________________________________
___________________________________ Signature Guarantee:* _____________
- --------
(1) (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the
5
<PAGE> 103
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert assignee's social security or tax identification number)
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
____________________________________________________________
____________________________________________________________
____________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: _________________________
Signature: ____________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
- ----------
requirements of the Conversion Agent, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Conversion
Agent in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
6
<PAGE> 1
EXHIBIT 4.2
-----------
================================================================================
THE AES CORPORATION
AND
THE FIRST NATIONAL BANK OF CHICAGO
AS TRUSTEE
------------------------------------------------
JUNIOR SUBORDINATED INDENTURE
Dated as of March __, 1997
------------------------------------------------
JUNIOR SUBORDINATED DEBENTURES
================================================================================
<PAGE> 2
TABLE OF CONTENTS
---------------
PAGE
----
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions............................................. 2
ARTICLE 2
ISSUE, DESCRIPTION, TERMS, EXECUTION REGISTRATION AND EXCHANGE OF DEBENTURES
SECTION 2.01. Designation, Terms, Amount, Authentication
and Delivery of Debentures.............................. 8
SECTION 2.02. Form of Debenture and Trustee's Certificate............. 10
SECTION 2.03. Date and Denominations of Debentures and
Provisions for Payment of Principal, Premium
and Interest............................................ 10
SECTION 2.04. Execution of Debentures................................. 12
SECTION 2.05. Exchange of Debentures.................................. 14
SECTION 2.06. Temporary Debentures.................................... 15
SECTION 2.07. Mutilated, Destroyed, Lost or Stolen Debentures......... 15
SECTION 2.08. Cancellation of Surrendered Debentures.................. 16
SECTION 2.09. Provisions of Indenture and Debentures for
Sole Benefit of Parties and Debentureholders............ 16
SECTION 2.10. Appointment of Authenticating Agent..................... 16
SECTION 2.11. Global Debenture........................................ 17
SECTION 2.12. CUSIP Numbers........................................... 18
ARTICLE 3
REDEMPTION OF DEBENTURES AND SINKING FUND PROVISIONS
SECTION 3.01. Payment of Principal of (And Premium, if any)
and Interest on Debentures.............................. 19
SECTION 3.02. Notice of Redemption.................................... 19
SECTION 3.03. Debentures Due and Payable.............................. 20
SECTION 3.04. Sinking Funds for Debentures............................ 20
SECTION 3.05. Satisfaction of Sinking Fund Payments With Debentures... 21
SECTION 3.06. Redemption of Debentures for Sinking Fund............... 21
i
<PAGE> 3
PAGE
----
ARTICLE 4
PARTICULAR COVENANTS OF THE COMPANY
SECTION 4.01. Payment of Principal of (And Premium, if any)
and Interest on Debentures.............................. 22
SECTION 4.02. Maintenance of Office or Agent for Payment of
Debentures, Designation of Office or Agency for
Payment, Registration, Transfer and Exchange of
Debentures.............................................. 22
SECTION 4.03. Duties of Paying Agent; Company as Payment Agent;
and Holding Sums of Trust............................... 22
SECTION 4.04. Appointment to Fill Vacancy in Office of Trustee........ 23
ARTICLE 5
DEBENTUREHOLDER'S LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
SECTION 5.01. Company to Furnish Trustee Information as to
Names and Addresses of Debentures....................... 24
SECTION 5.02. Trustee to Preserve Information as to Names and
Addresses of Debentureholders .......................... 24
SECTION 5.03. Annual and Other Reports to Be Filed by Company
With Trustee ........................................... 25
SECTION 5.04. Trustee to Transmit Annual Report to
Debentureholders ....................................... 26
ARTICLE 6
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON EVENT OF DEFAULT
SECTION 6.01. Events of Default Defined .............................. 28
SECTION 6.02. Covenant of Company to Pay to Trustee Whole
Amount Due on Debentures on Default in Payment of
Interest or Principal (and Premiums, if any) ........... 31
SECTION 6.03. Application of Moneys Collected by Trustee.............. 32
SECTION 6.04. Limitation on Suits by Holders of Debentures ........... 33
SECTION 6.05. Remedies Cumulative; Delay or Omission in
Exercise of Rights Not Waiver of Default................ 33
SECTION 6.06. Rights of Holders of Majority in Principal Amount
of Debentures to Direct Trustee and to Waive
Defaults................................................ 34
SECTION 6.07. Trustee to Give Notice of Defaults Known To It,
But May Withhold in Certain Circumstances .............. 35
SECTION 6.08. Requirements of an Undertaking to Pay Costs in
Certain Suits Under Indenture or Against
Trustee ................................................ 35
ii
<PAGE> 4
PAGE
----
ARTICLE 7
CONCERNING THE TRUSTEE
SECTION 7.01. Upon Event of Default Occurring and Continuing,
Trustee Shall Exercise Powers Vested In It, and
Use Same Degree of Care and Skill In Their
Exercise, as Prudent Individual Would Use............... 36
SECTION 7.02. Subject to Provisions of Section 7.01 .................. 38
SECTION 7.03. Trustee Not Liable for Recitals In Indenture Or
In Debentures .......................................... 39
SECTION 7.04. Trustee, Paying Agent or Debenture Registrar May
Own Debentures.......................................... 39
SECTION 7.05. Moneys Received by Trustee to Be Held In Trust
Without Interest ....................................... 39
SECTION 7.06. Trustee Entitled to Compensation, Reimbursement
and Indemnity .......................................... 40
SECTION 7.07. Right of Trustee to Rely on Certificate of
Officers of Company Where No Other Evidence
Specifically Prescribed................................. 40
SECTION 7.08. Trustee Acquiring Conflicting Interest to
Eliminate Conflict or Resign............................ 40
SECTION 7.09. Requirements for Eligibility of Trustee ................ 47
SECTION 7.10. Resignation of Trustee and Appointment of Successor .... 47
SECTION 7.11. Acceptance by Successor to Trustee...................... 49
SECTION 7.12. Successor to Trustee by Merger, Consolidation or
Succession to Business ................................. 50
SECTION 7.13. Limitations on Rights of Trustee as a Creditor to
Obtain Payment of Certain Claims Within Four
Months Prior to Default or During Default, or to
Realize on Property as such Creditor Thereafter ........ 51
ARTICLE 8
CONCERNING THE DEBENTURES
SECTION 8.01. Evidence of Action by Debentureholders.................. 55
SECTION 8.02. Proof of Execution of Instruments and of Holding
of Debentures .......................................... 55
SECTION 8.03. Who May Be Deemed Owners of Debentures.................. 56
SECTION 8.04. Debentures Owned by a Company or Controlled or
Controlling Companies Disregarded for Certain
Purposes ............................................... 56
SECTION 8.05. Instruments Executed by Debentureholders Bind
Future Holders ......................................... 56
ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 9.01. Purposes for Which Supplemental Indenture May Be
Entered Into Without Consent of
Debentureholders........................................ 57
SECTION 9.02. Modification of Indenture with Consent of
Debentureholders ....................................... 58
iii
<PAGE> 5
PAGE
----
SECTION 9.03. Effect of Supplemental Indentures ...................... 59
SECTION 9.04. Debentures May Bear Notation of Changes By
Supplemental Indentures................................. 60
SECTION 9.05. Opinion of Counsel...................................... 60
ARTICLE 10
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 10.01. Satisfaction and Discharge of Indenture................. 60
SECTION 10.02. Successor Corporation Substituted....................... 61
SECTION 10.03. Opinion of Counsel ..................................... 61
ARTICLE 11
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 11.01. Satisfaction and Discharge of Indentures................ 61
SECTION 11.02. Application of Trustee of Funds Deposited For
Payment of Debentures................................... 64
SECTION 11.03. Application by Trustee of Funds Deposited For
Payment of Debentures................................... 64
SECTION 11.04. Repayment of Moneys Held by Paying Agent ............... 64
SECTION 11.05. Repayment of Moneys Paid by Trustee..................... 64
ARTICLE 12
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 12.01. Incorporators, Stockholders, Officers and
Directors of Company Exempt From Individual
Liability .............................................. 65
ARTICLE 13
MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors and Assigns of Company Bound by
Indenture .............................................. 65
SECTION 13.02. Acts of Board, Committee or Officer of Successor
Company Valid .......................................... 65
SECTION 13.03. Surrender of Powers of Company ......................... 65
SECTION 13.04. Required Notices or Demands May be Served by
Mail ................................................... 66
SECTION 13.05. Indenture and Debentures to Be Construed in
Accordance with Laws of the State of New York........... 66
SECTION 13.06. Officer's Certificate and Opinion of Counsel to
be Furnished Upon Application or Demands by
Company; Statements To Be
iv
<PAGE> 6
PAGE
----
Included In Each Certificate or Opinion With
Respect to Compliance With Condition or Covenant........ 66
SECTION 13.07. Payments Due on Sundays or Holidays..................... 67
SECTION 13.08. Provisions Required by Trust Indenture Act of
1939 to Control ........................................ 67
SECTION 13.09. Indenture May Be Executed by its Counterparts .......... 67
SECTION 13.10. Separability of Indenture Provisions ................... 67
SECTION 13.11. Assignment by Company to Subsidiary..................... 67
SECTION 13.12. Holders of Preferred Securities as Third Party
Beneficiaries of the Indenture; Holders of
Preferred Securities May Institute Legal
Proceedings Against the Company in Certain
Cases .................................................. 67
ARTICLE 14
SUBORDINATION OF DEBENTURES
SECTION 14.01. Agreement to Subordinate ............................... 68
SECTION 14.02. Payments to Debentureholders ........................... 68
SECTION 14.03. Subrogation of Debentures............................... 70
SECTION 14.04. Authorization by Debentureholders....................... 71
SECTION 14.05. Notice to Trustee....................................... 71
SECTION 14.06. Trustee's Relation to Senior and Subordinated
Debt ................................................... 72
SECTION 14.07. No Impairment to Subordination ......................... 73
v
<PAGE> 7
THIS INDENTURE, is dated as of the ____ day of March, 1997, between The
AES Corporation, a corporation duly organized and existing under the laws of the
State of Delaware (hereinafter sometimes referred to as the "Company"), and The
First National Bank of Chicago, as Trustee (hereinafter sometimes referred to as
the "Trustee"):
WHEREAS, for its lawful corporate purposes, the Company has fully
authorized the execution and delivery of this Indenture to provide for the
issuance of unsecured debentures (hereinafter referred to as the "Debentures"),
in an unlimited aggregate principal amount to be issued from time to time in one
or more series in accordance with the terms of this Indenture, as registered
Debentures without coupons, to be authenticated by the certificate of the
Trustee;
WHEREAS, to provide the terms and conditions upon which the Debentures are
to be authenticated, issued and delivered, the Company has duly authorized the
execution of this Indenture;
WHEREAS, the Debentures and the certificate of authentication to be borne
by the Debentures (the "Certificate of Authentication") are to be substantially
in such forms as may be approved by the Board of Directors (as defined below) or
set forth in any indenture supplemental to this Indenture;
AND WHEREAS, all acts and things necessary to make the Debentures issued
pursuant hereto, when executed by the Company and authenticated and delivered by
the Trustee in accordance with the terms of this Indenture, the valid, binding
and legal obligations of the Company, and to constitute a valid indenture and
agreement according to its terms, have been done and performed or will be done
and performed prior to the issuance of such Debentures, and the execution of
this Indenture has been and the issuance hereunder of the Debentures has been or
will be prior to issuance in all respects duly authorized, and the Company, in
the exercise of the legal right and power in it vested, executes this Indenture
and proposes to make, execute, issue and deliver the Debentures;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Debentures are and are to be authenticated, issued and delivered, and in
consideration of the premises and of the acquisition and acceptance of the
Debentures by the holders thereof, the Company covenants and agrees with the
Trustee, for the equal and proportionate benefit (subject to the provisions of
this Indenture) of the respective holders from time to time of the Debentures,
without any discrimination, preference or priority of any one Debenture over any
other by reason of priority in the time of issue, sale or negotiation thereof,
or otherwise, except as provided herein, as follows:
<PAGE> 8
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The terms defined in this Section (except as in
this Indenture otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture, any resolution of the Board of
Directors of the Company and of any indenture supplemental hereof shall have the
respective meanings specified in this Section. All other terms used in this
Indenture which are defined in the Trust Indenture Act of 1939, as amended, or
which are by reference in such Act defined in the Securities Act of 1933, as
amended (except as herein otherwise expressly provided or unless the context
otherwise requires), shall have the meanings assigned to such terms in said
Trust Indenture Act and in said Securities Act as in force at the date of this
instrument.
"AES Trust" means such statutory business trust created under the laws of
the State of Delaware specified in the applicable Board Resolution or
supplemental indenture establishing a particular series of Debentures pursuant
to Section 2.01 hereof.
"Affiliate" of the Company means any company at least a majority of whose
outstanding voting stock shall at the time be owned by the Company, or by one or
more direct or indirect subsidiaries of the Company or by the Company and one or
more direct or indirect subsidiaries of the Company. For the purposes only of
this definition of the term "Affiliate", the term "voting stock", as applied to
the stock of any company, shall mean stock of any class or classes having
ordinary voting power for the election of a majority of the directors of such
company, other than stock having such power only by reason of the occurrence of
a contingency.
"Authenticating Agent" means an authenticating agent with respect to all
or any of the series of Debentures, as the case may be, appointed with respect
to all or any series of the Debentures, as the case may be, by the Trustee
pursuant to Section 2.10.
"Bank Credit Agreement" means the Credit Agreement dated as of May 20,
1996 among the Company, the Banks named on the signature pages thereof and
Morgan Guaranty Trust Company of New York, as such Agreement has been and may be
amended, restated, supplemented or otherwise modified from time to time, and
includes any agreement extending the maturity of, or restructuring (including,
but not limited to, the inclusion of additional borrowers thereunder that are
Subsidiaries of the Company and whose obligations are guaranteed by the Company
thereunder) all or any portion of, the Debt under such Agreement or any
successor agreements and includes any agreement with one or more banks or other
lending institutions refinancing all or any portion of the Debt under such
Agreement or any successor agreements.
2
<PAGE> 9
"Board of Directors" means the Board of Directors of the Company, or any
committee of such Board duly authorized to act hereunder.
"Board Resolution" means a copy of one or more resolutions, certified by
the secretary or an assistant secretary of the Company to have been adopted or
consented to by the Board of Directors and to be in full force and effect, and
delivered to the Trustee.
"Business day", with respect to any series of Debentures, means any day
other than a day on which banking institutions in the Borough of Manhattan, the
City and State of New York, are authorized or obligated by law or executive
order to close.
"Certificate" means a certificate signed by the principal executive
officer, the principal financial officer or the principal accounting officer of
the Company. The Certificate need not comply with the provisions of Section
13.06.
"Change of Control" means the occurrence of one or more of the following
events: (i) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the assets of
the Company to any Person or group (as that term is used in Section 13(d)(3) of
the Securities Exchange Act of 1934) of Persons, (ii) a Person or group (as so
defined) of Persons (other than management of the Company on the date of this
Indenture or their Affiliates) shall have become the beneficial owner of more
than 35% of the outstanding voting stock of the Company, or (iii) during any
one-year period, individuals who at the beginning of such period constitute the
Board of Directors (together with any new director whose election or nomination
was approved by a majority of the directors then in office who were either
directors at the beginning of such period or who were previously so approved)
cease to constitute a majority of the Board of Directors.
"Common Securities" means the common undivided beneficial interests in the
assets of the applicable AES Trust.
"Common Stock" means the common stock of the Company, par value $.01 per
share.
"Company" means The AES Corporation, a corporation duly organized and
existing under the laws of the State of Delaware, and, subject to the provisions
of Article Ten, shall also include its successors and assigns.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of the execution of this Indenture is located at One
First National Plaza, Suite 0126, Chicago, IL 60670-0126, Attention: Corporate
Trust Administration.
3
<PAGE> 10
"Currency Agreement" means, with respect to any Person, any foreign
exchange contract, currency swap agreement or other similar agreement or
arrangement designed to protect such Person or any of its Subsidiaries against
fluctuations in currency values to or under which such Person or any of its
Subsidiaries is a party or a beneficiary on the date hereof or becomes a party
or a beneficiary thereafter.
"Debt" means, with respect to any Person at any date of determination
(without duplication), (i) all indebtedness of such Person for borrowed money,
(ii) all obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments, (iii) all obligations of such Person in respect of
letters of credit or bankers' acceptance or other similar instruments (or
reimbursement obligations with respect thereto), (iv) all obligations of such
Person to pay the deferred purchase price of property or services, except Trade
Payables, (v) all obligations of such Person as lessee under Capitalized Leases,
(vi) all Debt of others secured by a Lien on any asset of such Person, whether
or not such Debt is assumed by such Person; provided that, for purposes of
determining the amount of any Debt of the type described in this clause, if
recourse with respect to such Debt is limited to such asset, the amount of such
Debt shall be limited to the lesser of the fair market value of such asset or
the amount of such Debt, (vii) all Debt of others Guaranteed by such Person to
the extent such Debt is Guaranteed by such Person, (viii) all redeemable stock
valued at the greater of its voluntary or involuntary liquidation preference
plus accrued and unpaid dividends and (ix) to the extent not otherwise included
in this definition, all obligations of such Person under Currency Agreements and
Interest Rate Agreements.
"Declaration of Trust" means the Declaration of Trust of the AES Trust, if
any, specified in the applicable Board Resolution or supplemental indenture
establishing a particular series of Debentures pursuant to Section 2.01 hereof.
"Debenture" or "Debentures" means any Debenture or Debentures, as the case
may be, authenticated and delivered under this Indenture.
"Debentureholder", "holder of Debentures", "registered holder", or other
similar term, means the person or persons in whose name or names a particular
Debenture shall be registered on the books of the Company kept for the purpose
in accordance with the terms of this Indenture.
"Default" means any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default.
"Depositary" means with respect to Debentures of any series, for which the
Company shall determine that such Debentures will be issued as a Global
Debenture, The Depository Trust Company, New York, New York, another clearing
agency, or any successor registered as a clearing agency under the Securities
Exchange Act of 1934, as
4
<PAGE> 11
amended (the "Exchange Act"), or other applicable statute or regulation, which,
in each case, shall be designated by the Company pursuant to either Section 2.01
or 2.11.
"Designated Senior and Subordinated Debt" means (i) Debt under the Bank
Credit Agreement and (ii) Debt constituting Senior and Subordinated Debt which,
at the time of its determination, (A) has an aggregate principal amount of at
least $30 million and (B) is specifically designated in the instrument
evidencing such Senior and Subordinated Debt as "Designated Senior and
Subordinated Debt" by the Company.
"Event of Default", with respect to Debentures of a particular series
means any event specified in Section 6.01(a), continued for the period of time,
if any, therein designated.
"Global Debenture" means, with respect to any series of Debentures, a
Debenture executed by the Company and delivered by the Trustee to the Depositary
or pursuant to the Depositary's instruction, all in accordance with the
Indenture, which shall be registered in the name of the Depositary or its
nominee.
"Governmental 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, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a) (2) of
the Securities Act of 1933, as amended) as custodian with respect to any such
Governmental Obligation or a specific payment of principal of or interest on any
such Governmental Obligation held by such custodian for the account of the
holder of such depository receipt; provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced by such
depository receipt.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Debt or other obligation of any other
Person and, without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of such Person (i) to purchase or
pay (or advance or supply funds for the purchase or payment of) such Debt or
other obligation of such other Person (whether arising by virtue of partnership
arrangements, or by agreement to keep well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for purposes of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof
or to protect such
5
<PAGE> 12
obligee against loss in respect thereof (in whole or in part); provided that the
term "Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Guarantee Agreement" means the guarantee, if any, that the Company may
enter into that operates directly or indirectly for the benefit of holders of
Preferred Securities issued by a AES Trust.
"Indenture" means this instrument as originally executed, or, if amended
or supplemented as herein provided, as so amended or supplemented.
"Interest Payment Date" when used with respect to any installment of
interest on a Debenture of a particular series means the date specified in such
Debenture or in a Board Resolution or in an indenture supplemental hereto with
respect to such series as the fixed date on which an installment of interest
with respect to Debentures of that series is due and payable.
"Interest Rate Agreement" means, with respect to any Person, 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 such Person or any of its Subsidiaries
against fluctuations in interest rates to or under which such Person or any of
its Subsidiaries is a party or a beneficiary on the date hereof or becomes a
party or a beneficiary thereafter.
"Lien" means, with respect to any Property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
Property. For purposes of this Indenture, the Company shall be deemed to own
subject to a Lien any Property which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such Property.
"Officers' Certificate" means a certificate signed by the President or a
Vice President and by the Treasurer or an Assistant Treasurer or the Controller
or an Assistant Controller or the Secretary or an Assistant Secretary of the
Company and who shall be satisfactory to the Trustee. Each such certificate
shall include the statements provided for in Section 13.06, if and to the extent
required by the provisions thereof.
"Opinion of Counsel" means an opinion in writing signed by legal counsel,
who may be an employee of or counsel for the Company and who shall be
satisfactory to the Trustee. Each such opinion shall include the statements
provided for in section 13.06, if and to the extent required by the provisions
thereof.
6
<PAGE> 13
"Outstanding", when used with reference to Debentures of any series,
subject to the provisions of Section 8.01, means, as of any particular time, all
Debentures of that series theretofore authenticated and delivered by the Trustee
under this Indenture, except (a) Debentures theretofore canceled by the Trustee
or any paying agent, or delivered to the Trustee or any paying agent for
cancellation or which have previously been canceled; (b) Debentures or portions
thereof for the payment or redemption of which moneys or Governmental
Obligations in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or shall have been set
aside and segregated in trust for the holders of such Debentures by the Company
(if the Company shall act as its own paying agent); provided, however, that if
such Debentures or portions of such Debentures are to be redeemed prior to the
maturity thereof, notice of such redemption shall have been given as in Article
Three provided, or provision satisfactory to the Trustee shall have been made
for giving such notice; and (c) Debentures in lieu of or in substitution for
which other Debentures shall have been authenticated and delivered pursuant to
the terms of Section 2.07.
"Person" means any individual, corporation, joint venture, association,
joint stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Predecessor Debenture" of any particular Debenture means every previous
Debenture evidencing all or a portion of the same debt as that evidenced by such
particular Debenture; and, for the purposes of this definition, any Debenture
authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or
stolen Debenture shall be deemed to evidence the same debt as the lost,
destroyed or stolen Debenture.
"Preferred Securities" means the preferred undivided beneficial interests
in the assets of the applicable AES Trust.
"Property Trustee" means the entity performing the function of the
Property Trustee under the applicable Declaration of Trust of a AES Trust.
"Responsible Officer" when used with respect to the Trustee means the
chairman of the board of directors, the president, any vice president, the
secretary, the treasurer, any trust officer, any corporate trust officer or any
other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.
"Security Exchange" when used with respect to the Debentures of any series
which are held as trust assets of a AES Trust pursuant to the Declaration of
Trust of such AES Trust, means the distribution of the Debentures of such series
by such AES Trust in
7
<PAGE> 14
exchange for the Preferred Securities and Common Securities of such AES Trust in
dissolution of such AES Trust pursuant to the Declaration of Trust of such AES
Trust.
"Senior and Subordinated Debt" means the principal of (and premium, if
any) and interest on all Debt of the Company whether created, incurred or
assumed before, on or after the date of this Indenture; provided that such
Senior and Subordinated Debt shall not include (i) Debt of the Company that,
when incurred and without respect to any election under Section 1111(b) of Title
11, U.S. Code, was without recourse, (ii) any other Debt of the Company which by
the terms of the instrument creating or evidencing the same is specifically
designated as not being senior in right of payment to the Debentures, and in
particular the Debentures shall rank pari passu with all other debt securities
and guarantees issued to any trust, partnership or other entity affiliated with
the Company which is a financing vehicle of the Company in connection with an
issuance of preferred securities by such financing entity and (iii) redeemable
stock of the Company.
"Subsidiary" means any corporation at least a majority of whose
outstanding voting stock shall at the time be owned by the Company or by one or
more subsidiaries or by the Company and one or more Subsidiaries. For the
purposes only of this definition of the term "Subsidiary", the term "voting
stock", as applied to the stock of any corporation, shall mean stock of any
class or classes having ordinary voting power for the election of a majority of
the directors of such corporation, other than stock having such power only by
reason of the occurrence of a contingency.
"Trade Payables" means, with respect to any Person, any accounts payable
or any other indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person or any of its Subsidiaries arising in the
ordinary course of business in connection with the acquisition of goods or
services.
"Trustee" means The First National Bank of Chicago, and, subject to the
provisions of Article Seven, shall also include its successors and assigns, and,
if at any time there is more than one person acting in such capacity hereunder,
"Trustee" shall mean each such person. The term "Trustee" as used with respect
to a particular series of the Debentures shall mean the trustee with respect to
that series.
"Trust Indenture Act", subject to the provisions of Section 9.01 and 9.02,
means the Trust Indenture Act of 1939, as amended and in effect at the date of
execution of this Indenture.
"Trust Securities" means the Common Securities and the Preferred
Securities of the applicable AES Trust.
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ARTICLE 2
ISSUE, DESCRIPTION, TERMS, EXECUTION REGISTRATION AND EXCHANGE OF
DEBENTURES
SECTION 2.01. Designation, Terms, Amount, Authentication and Delivery of
Debentures. The aggregate principal amount of Debentures which may be
authenticated and delivered under this Indenture is unlimited.
The Debentures may be issued in one or more series up to the aggregate
principal amount of Debentures of that series from time to time authorized by or
pursuant to a Board Resolution or pursuant to one or more indentures
supplemental hereto, prior to the initial issuance of Debentures of a particular
series. Prior to the initial issuance of Debentures of any series, there shall
be established in or pursuant to a Board Resolution, and set forth in an
Officers' Certificate, or established in one or more indentures supplemental
hereto:
(1) the title of the Debentures of the series (which shall
distinguish the Debentures of the series from all other Debentures);
(2) any limit upon the aggregate principal amount of the Debentures
of that series which may be authenticated and delivered under this
Indenture (except for Debentures authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of,
other Debentures of that series):
(3) the date or dates on which the principal of the Debentures of
the series is payable;
(4) the rate or rates at which the Debentures of the series shall
bear interest or the manner of calculation of such rate or rates, if
any;
(5) the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest will be payable or the
manner of determination of such Interest Payment Dates and the
record date for the determination of holders to whom interest is
payable on any such Interest Payment Dates;
(6) the right, if any, to extend or defer the interest payment
periods and the duration of such extension;
(7) the period or periods within which, the price or prices at
which, and the terms and conditions upon which, Debentures of the
series may be redeemed, in whole or in part, at the option of the
Company;
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(8) the obligation, if any, of the Company to redeem or purchase
Debentures of the series pursuant to any sinking fund or analogous
provisions (including payments made in cash in anticipation of
future sinking fund obligations) or at the option of a holder
thereof and the period or periods within which, the price or prices
at which, and the terms and conditions upon which, Debentures of the
series shall be redeemed or purchased, in whole or in part, pursuant
to such obligation;
(9) any exchangeability, conversion or prepayment provisions of the
Debentures;
(10) the form of the Debentures of the series including the form of
the Certificate of Authentication for such series;
(11) if other than denominations of $25 or any integral multiple
thereof, the denominations in which the Debentures of the series
shall be issuable;
(12) any and all other terms with respect to such series (which
terms shall not be inconsistent with the terms of this Indenture);
and
(13) whether the Debentures are issuable as a Global Debenture and,
in such case, the identity of the Depositary for such series.
(14) If the Debentures of such series are to be deposited as trust
assets in a AES Trust the name of the applicable AES Trust (which
shall distinguish such statutory business trust from all other AES
Trusts) into which the Debentures of such series are to be deposited
as trust assets and the date of its Declaration of Trust.
All Debentures of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to any
such Board Resolution or in any indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
SECTION 2.02. Form of Debenture and Trustee's Certificate. The Debentures
of any series and the Trustee's certificate of authentication to be borne by
such Debentures shall be substantially of the tenor and purport as set forth in
one or more indentures supplemental hereto or as provided in a Board Resolution
and as set forth in an Officers' Certificate, and may have such letters, numbers
or other marks of identification or
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designation and such legends or endorsements printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with the
provisions of this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which Debentures of that series may be listed, or to
conform to usage.
SECTION 2.03. Date and Denominations of Debentures and Provisions for
Payment of Principal, Premium and Interest. The Debentures shall be issuable as
registered Debentures and in the denominations of $50 or any integral multiple
thereof, subject to Section 2.01(10). The Debentures of a particular series
shall bear interest payable on the dates and at the rate specified with respect
to that series. The principal of and the interest on the Debentures of any
series, as well as any premium thereon in case of redemption thereof prior to
maturity, shall be payable in the coin or currency of the United States of
America which at the time is legal tender for public and private debt, at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City and State of New York. Each Debenture shall be dated the
date of its authentication. Interest on the Debentures shall be computed on the
basis of a 360-day year composed of twelve 30-day months.
The interest installment on any Debenture which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date for
Debentures of that series shall be paid to the person in whose name said
Debenture (or one or more Predecessor Debentures) is registered at the close of
business on the regular record date for such interest installment. In the event
that any Debenture of a particular series or portion thereof is called for
redemption and the redemption date is subsequent to a regular record date with
respect to any Interest Payment Date and prior to such Interest Payment Date,
interest on such Debenture will be paid upon presentation and surrender of such
Debenture as provided in Section 3.03.
Any interest on any Debenture which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date for Debentures of the same
series (herein called "Defaulted Interest") shall forthwith cease to be payable
to the registered holder on the relevant regular record date by virtue of having
been such holder; and such Defaulted Interest shall be paid by the Company, at
its election, as provided in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted Interest on
Debentures to the persons in whose names such Debentures (or their
respective Predecessor Debentures) are registered at the close of
business on a special record date for the payment of such Defaulted
Interest, which shall be fixed in the following manner: the Company
shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each such Debenture and the date of
the proposed payment, and at the
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same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the
benefit of the persons entitled to such Defaulted Interest as in
this clause provided. Thereupon the Trustee shall fix a special
record date for the payment of such Defaulted Interest which shall
not be more than 15 nor less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such special record date and, in the
name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the special record
date therefor to be mailed, first class postage prepaid, to each
Debentureholder at his or her address as it appears in the Debenture
Register (as hereinafter defined), not less than 10 days prior to
such special record date. Notice of the proposed payment of such
Defaulted Interest and the special record date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the
persons in whose names such Debentures (or their Predecessor
Debentures) are registered on such special record date and shall be
no longer payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on any
Debentures in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Debentures may
be listed, and upon such notice as may be required by such exchange,
if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
Unless otherwise set forth in a Board Resolution or one or more indentures
supplemental hereto establishing the terms of any series of Debentures pursuant
to Section 2.01 hereof, the term "regular record date" as used in this Section
with respect to a series of Debentures with respect to any Interest Payment Date
for such series shall mean either the fifteenth day of the month immediately
preceding the month in which an Interest Payment Date established for such
series pursuant to Section 2.01 hereof shall occur, if such Interest Payment
Date is the first day of a month, or the last day of the month immediately
preceding the month in which an Interest Payment Date established for such
series pursuant to Section 2.01 hereof shall occur, if such Interest Payment
Date is the fifteenth day of a month, whether or not such date is business day.
Subject to the foregoing provisions of this Section, each Debenture of a
series delivered under this Indenture upon transfer of or in exchange for or in
lieu of any other
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Debenture of such series shall carry the rights to interest accrued and unpaid,
and to accrue, which were carried by such other Debenture.
SECTION 2.04. Execution of Debentures. The Debentures shall, subject to
the provisions of Section 2.06, be printed on steel engraved borders or fully or
partially engraved, or legibly typed, as the proper officers of the Company may
determine, and shall be signed on behalf of the Company by the Chairman or Vice
Chairman of its Board of Directors or its President or one of its Vice
Presidents, under its corporate seal attested by its Secretary or one of its
Assistant Secretaries. The signature of the Chairman, Vice Chairman, President
or a Vice President and/or the signature of the Secretary or an Assistant
Secretary in attestation of the corporate seal, upon the Debentures, may be in
the form of a manual or facsimile signature of a present or any future Chairman,
Vice Chairman, President or Vice President and of a present or any future
Secretary or Assistant Secretary and may be imprinted or otherwise reproduced on
the Debentures and for that purpose the Company may use the manual or facsimile
signature of any person who shall have been a Chairman, Vice Chairman, President
or Vice President, or of any person who shall have been a Secretary or Assistant
Secretary, notwithstanding the fact that at the time the Debentures shall be
authenticated and delivered or disposed of such person shall have ceased to be
the Chairman, Vice Chairman, President or a Vice President, or the Secretary or
an Assistant Secretary, of the Company, as the case may be. The seal of the
Company may be in the form of a facsimile of the seal of the Company and may be
impressed, affixed, imprinted or otherwise reproduced on the Debentures.
Only such Debentures as shall bear thereon a Certificate of Authentication
substantially in the form established for such Debentures, executed manually by
an authorized signatory of the Trustee, or by any Authenticating Agent with
respect to such Debentures, shall be entitled to the benefits of this Indenture
or be valid or obligatory for any purpose. Such certificate executed by the
Trustee, or by any Authenticating Agent appointed by the Trustee with respect to
such Debentures, upon any Debenture executed by the Company shall be conclusive
evidence that the Debenture so authenticated has been duly authenticated and
made available for delivery hereunder and that the holder is entitled to the
benefits of this Indenture.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Debentures of any series executed by the
Company to the Trustee for authentication, together with a written order of the
Company for the authentication and delivery of such Debentures, signed by its
President or any Vice President and its Treasurer or any Assistant Treasurer,
and the Trustee in accordance with such written order shall authenticate and
make available for delivery such Debentures.
In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Opinion
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<PAGE> 20
of Counsel stating that the form and terms thereof have been established in
conformity with the provisions of this Indenture.
The Trustee shall not be required to authenticate such Debentures if the
issue of such Debentures pursuant to this Indenture will affect the Trustee's
own rights, duties or immunities under the Debentures and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee.
SECTION 2.05. Exchange of Debentures. (a) Debentures of any series may be
exchanged upon presentation thereof at the office or agency of the Company
designated for such purpose in the Borough of Manhattan, The City and State of
New York, for other Debentures of such series of authorized denominations, and
for a like aggregate principal amount, upon payment of a sum sufficient to cover
any tax or other governmental charge in relation thereto, all as provided in
this Section. In respect of any Debentures so surrendered for exchange, the
Company shall execute, the Trustee shall authenticate and such office or agency
shall make available for delivery in exchange therefor the Debenture or
Debentures of the same series which the Debentureholder making the exchange
shall be entitled to receive, bearing numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at its office or agency
designated for such purpose in the Borough of Manhattan, The City and State of
New York, or such other location designated by the Company a register or
registers (herein referred to as the "Debenture Register") in which, subject to
such reasonable regulations as it may prescribe, the Company shall register the
Debentures and the transfers of Debentures as in this Article provided and which
at all reasonable times shall be open for inspection by the Trustee. The
registrar for the purpose of registering Debentures and transfer of Debentures
as herein provided shall be appointed as authorized by Board Resolution (the
"Debenture Registrar").
Upon surrender for transfer of any Debenture at the office or agency of
the Company designated for such purpose in the Borough of Manhattan, The City
and State of New York, the Company shall execute, the Trustee shall authenticate
and such office or agency shall make available for delivery in the name of the
transferee or transferees a new Debenture or Debentures of the same series as
the Debenture presented for a like aggregate principal amount.
All Debentures presented or surrendered for exchange or registration of
transfer, as provided in this Section, shall be accompanied (if so required by
the Company or the Debenture Registrar) by a written instrument or instruments
of transfer, in form satisfactory to the Company or the Debenture Registrar,
duly executed by the registered holder or by his duly authorized attorney in
writing.
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(c) No service charge shall be made for any exchange or registration of
transfer of Debentures, or issue of new Debentures in case of partial redemption
of any series, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge in relation thereto, other than exchanges
pursuant to Section 2.06, the second paragraph of Section 3.03 and Section 9.04
not involving any transfer.
(d) The Company shall not be required (i) to issue, exchange or register
the transfer of any Debentures during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of less
than all the outstanding Debentures of the same series and ending at the close
of business on the day of such mailing, nor (ii) to register the transfer of or
exchange any Debentures of any series or portions thereof called for redemption.
The provisions of this Section 2.05 are, with respect to any Global Debenture,
subject to Section 2.11 hereof.
SECTION 2.06. Temporary Debentures. Pending the preparation of definitive
Debentures of any series, the Company may execute, and the Trustee shall
authenticate and make available for delivery, temporary Debentures (printed,
lithographed or typewritten) of any authorized denomination, and substantially
in the form of the definitive Debentures in lieu of which they are issued, but
with such omissions, insertions and variations as may be appropriate for
temporary Debentures, all as may be determined by the Company. Every temporary
Debenture of any series shall be executed by the Company and be authenticated by
the Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Debentures of such series. Without
unnecessary delay the Company will execute and will furnish definitive
Debentures of such series and thereupon any or all temporary Debentures of such
series may be surrendered in exchange therefor (without charge to the holders),
at the office or agency of the Company designated for the purpose in the Borough
of Manhattan, The City and State of New York, and the Trustee shall authenticate
and such office or agency shall make available for delivery in exchange for such
temporary Debentures an equal aggregate principal amount of definitive
Debentures of such series, unless the Company advises the Trustee to the effect
that definitive Debentures need not be executed and furnished until further
notice from the Company. Until so exchanged, the temporary Debentures of such
series shall be entitled to the same benefits under this Indenture as definitive
Debentures of such series authenticated and delivered hereunder.
SECTION 2.07. Mutilated, Destroyed, Lost or Stolen Debentures. In case any
temporary or definitive Debenture shall become mutilated or be destroyed, lost
or stolen, the Company (subject to the next succeeding sentence) shall execute,
and upon its request the Trustee (subject as aforesaid) shall authenticate and
make available for delivery, a new Debenture of the same series bearing a number
not contemporaneously outstanding, in exchange and substitution for the
mutilated Debenture, or in lieu of and in substitution for the Debenture so
destroyed, lost or stolen. In every case the applicant for a substituted
Debenture shall furnish to the Company and to the Trustee such security or
indemnity as
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may be required by them to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company and
to the Trustee evidence to their satisfaction of the destruction, loss or theft
of the applicant's Debenture and of the ownership thereof. The Trustee may
authenticate any such substituted Debenture and make available for delivery the
same upon the written request or authorization of any officer of the Company.
Upon the issuance of any substituted Debenture, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee) connected therewith. In case any Debenture which
has matured or is about to mature shall become mutilated or be destroyed, lost
or stolen, the Company may, instead of issuing a substitute Debenture, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated Debenture) if the applicant for such payment shall furnish to the
Company and to the Trustee such security or indemnity as they may require to
save them harmless, and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction, loss or theft of
such Debenture and of the ownership thereof.
Every Debenture issued pursuant to the provisions of this Section in
substitution for any Debenture which is mutilated, destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the mutilated, destroyed, lost or stolen Debenture shall be found at any
time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Debentures of
the same series duly issued hereunder. All Debentures shall be held and owned
upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Debentures, and shall preclude (to the extent lawful) any and all other rights
or remedies, notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
SECTION 2.08. Cancellation of Surrendered Debentures. All Debentures
surrendered for the purpose of payment, redemption, exchange or registration of
transfer shall, if surrendered to the Company or any paying agent, be delivered
to the Trustee for cancellation, or, if surrendered to the Trustee, shall be
canceled by it, and no Debentures shall be issued in lieu thereof except as
expressly required or permitted by any of the provisions of this Indenture. On
written request of the Company, the Trustee shall deliver to the Company
canceled Debentures held by the Trustee. If the Company shall otherwise acquire
any of the Debentures, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Debentures
unless and until the same are delivered to the Trustee for cancellation.
SECTION 2.09. Provisions of Indenture and Debentures for Sole Benefit of
Parties and Debentureholders. Nothing in this Indenture or in the Debentures,
express or
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implied, shall give or be construed to give to any person, firm or corporation,
other than the parties hereto and the holders of the Debentures, any legal or
equitable right, remedy or claim under or in respect of this Indenture, or under
any covenant, condition or provision herein contained; all such covenants,
conditions and provisions being for the sole benefit of the parties hereto and
of the holders of the Debentures.
SECTION 2.10. Appointment of Authenticating Agent. So long as any of the
Debentures of any series remain outstanding there may be an Authenticating Agent
for any or all such series of Debentures which the Trustee shall have the right
to appoint. Said Authenticating Agent shall be authorized to act on behalf of
the Trustee to authenticate Debentures of such series issued upon exchange,
transfer or partial redemption thereof, and Debentures so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. All references in
this Indenture to the authentication of Debentures by the Trustee shall be
deemed to include authentication by an Authenticating Agent for such series
except for authentication upon original issuance or pursuant to Section 2.07
hereof. Each Authenticating Agent shall be acceptable to the Company and shall
be a corporation which has a combined capital and surplus, as most recently
reported or determined by it, sufficient under the laws of any jurisdiction
under which it is organized or in which it is doing business to conduct a trust
business, and which is otherwise authorized under such laws to conduct such
business and is subject to supervision or examination by Federal or State
authorities. If at any time any Authenticating Agent shall cease to be eligible
in accordance with these provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving written notice
of resignation to the Trustee and to the Company. The Trustee may at any time
(and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Company. Any successor
Authenticating Agent, upon acceptance of its appointment hereunder, shall become
vested with all the rights, powers and duties of its predecessor hereunder as if
originally named as an Authenticating Agent pursuant hereto.
SECTION 2.11. Global Debenture. (a) If the Company shall establish
pursuant to Section 2.01 that the Debentures of a particular series are to be
issued as one or more Global Debentures, then the Company shall execute and the
Trustee shall, in accordance with Section 2.04, authenticate and deliver, one or
more Global Debentures which (i) shall represent, and shall be denominated in an
aggregate amount equal to the aggregate principal amount of, all of the
Outstanding Debentures of such series, (ii) shall be registered in the name of
the Depositary or its nominee, (iii) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary's instruction and (iv) shall bear a
legend substantially to the following effect: "Except as otherwise provided in
Section 2.11
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of the Indenture, this Debenture may be transferred, in whole but not in part,
only to another nominee of the Depositary or to a successor Depositary or to a
nominee of such successor Depositary."
(b) Notwithstanding the provisions of Section 2.05, the Global Debenture
of a series may be transferred, in whole but not in part and in the manner
provided in Section 2.05, only to another nominee of the Depositary for such
series, or to a successor Depositary for such series selected or approved by the
Company or to a nominee of such successor Depositary.
(c) If at any time the Depositary for a series of Debentures notifies the
Company that it is unwilling or unable to continue as Depositary for such series
or if at any time the Depositary for such series shall no longer be registered
or in good standing under the Exchange Act, or other applicable statute or
regulation and a successor Depositary for such series is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware
of such condition, as the case may be, this Section 2.11 shall no longer be
applicable to the Debentures of such series and the Company will execute, and
subject to Section 2.05, the Trustee will authenticate and make available for
delivery Debentures of such series in definitive registered form without
coupons, in authorized denominations, and in an aggregate principal amount equal
to the principal amount of the Global Debentures of such series in exchange for
such Global Debenture. In addition, the Company may at any time determine that
the Debentures of any series shall no longer be represented by one or more
Global Debentures and that the provisions of this Section 2.11 shall no longer
apply to the Debentures of such series. In such event the Company will execute
and subject to Section 2.05, the Trustee, upon receipt of an Officers'
Certificate evidencing such determination by the Company, will authenticate and
deliver Debentures of such series in definitive registered form without coupons,
in authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Debentures of such series in exchange for such
Global Debentures. Upon the exchange of the Global Debentures for such
Debentures in definitive registered form without coupons, in authorized
denominations, the Global Debentures shall be canceled by the Trustee. Such
Debentures in definitive registered form issued in exchange for the Global
Debentures pursuant to this Section 2.11(c) shall be registered in such names
and in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Debentures to the Depositary for
delivery to the persons in whose names such Debentures are so registered.
SECTION 2.12. CUSIP Numbers. The Company in issuing the Debentures may use
"CUSIP" and "CINS" numbers (if then generally in use), and the Trustee shall use
CUSIP numbers or CINS numbers, as the case may be, in notices of redemption or
exchange as a convenience to Debentureholders and no representation shall be
made as to the
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correctness of such numbers either as printed on the Debentures or as
contained in any notice of redemption or exchange.
ARTICLE 3
REDEMPTION OF DEBENTURES AND SINKING FUND PROVISIONS
SECTION 3.01. Payment of Principal of (And Premium, if any) and Interest
on Debentures. The Company may redeem the Debentures of any series issued
hereunder on and after the dates and in accordance with the terms established
for such series pursuant to Section 2.01 hereof.
SECTION 3.02. Notice of Redemption. (a) In case the Company shall desire
to exercise such right to redeem all or, as the case may be, a portion of the
Debentures of any series in accordance with the right reserved so to do, it
shall give notice of such redemption to holders of the Debentures of such series
to be redeemed by mailing, first class postage prepaid, a notice of such
redemption not less than 30 days and not more than 60 days before the date fixed
for redemption of that series to such holders at their last addresses as they
shall appear upon the Debenture Register. Any notice which is mailed in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the registered holder receives the notice. In any case, failure
duly to give such notice to the holder of any Debenture of any series designated
for redemption in whole or in part, or any defect in the notice, shall not
affect the validity of the proceedings for the redemption of any other
Debentures of such series or any other series. In the case of any redemption of
Debentures prior to the expiration of any restriction on such redemption
provided in the terms of such Debentures or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with any such restriction.
Each such notice of redemption shall specify the date fixed for redemption
and the redemption price at which Debentures of that series are to be redeemed,
and shall state that payment of the redemption price of such Debentures to be
redeemed will be made at the office or agency of the Company in the Borough of
Manhattan, the City and State of New York, upon presentation and surrender of
such Debentures, that interest accrued to the date fixed for redemption will be
paid as specified in said notice, that from and after said date interest will
cease to accrue and that the redemption is for a sinking fund, if such is the
case. If less than all the Debentures of a series are to be redeemed, the notice
to the holders of Debentures of that series to be redeemed in whole or in part
shall specify the particular Debentures to be so redeemed. In case any Debenture
is to be redeemed in part only, the notice which relates to such Debenture shall
state the portion of the principal amount thereof to be redeemed, and shall
state that on and after the redemption date,
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upon surrender of such Debenture, a new Debenture or Debentures of such series
in principal amount equal to the unredeemed portion thereof will be issued.
(b) If less than all the Debentures of a series are to be redeemed, the
Company shall give the Trustee at least 45 days' notice in advance of the date
fixed for redemption as to the aggregate principal amount of Debentures of the
series to be redeemed, and thereupon the Trustee shall select, by lot or in such
other manner as it shall deem appropriate and fair in its discretion and which
may provide for the selection of a portion or portions (equal to $50 or any
integral multiple thereof) of the principal amount of such Debentures of a
denomination larger than $50, the Debentures to be redeemed and shall thereafter
promptly notify the Company in writing of the numbers of the Debentures to be
redeemed, in whole or in part.
The Company may, if and whenever it shall so elect, by delivery of
instructions signed on its behalf by its President or any Vice President,
instruct the Trustee or any paying agent to call all or any part of the
Debentures of a particular series for redemption and to give notice of
redemption in the manner set forth in this Section, such notice to be in the
name of the Company or its own name as the Trustee or such paying agent may deem
advisable. In any case in which notice of redemption is to be given by the
Trustee or any such paying agent, the Company shall deliver or cause to be
delivered to, or permit to remain with, the Trustee or such paying agent, as the
case may be, such Debenture Register, transfer books or other records, or
suitable copies or extracts therefrom, sufficient to enable the Trustee or such
paying agent to give any notice by mail that may be required under the
provisions of this Section.
SECTION 3.03. Debentures Due and Payable. (a) If the giving of notice of
redemption shall have been completed as above provided, the Debentures or
portions of Debentures of the series to be redeemed specified in such notice
shall become due and payable on the date and at the place stated in such notice
at the applicable redemption price, together with interest accrued to the date
fixed for redemption and interest on such Debentures or portions of Debentures
shall cease to accrue on and after the date fixed for redemption, unless the
Company shall default in the payment of such redemption price and accrued
interest with respect to any such Debenture or portion thereof. On presentation
and surrender of such Debentures on or after the date fixed for redemption at
the place of payment specified in the notice, said Debentures shall be paid and
redeemed at the applicable redemption price for such series, together with
interest accrued thereon to the date fixed for redemption (but if the date fixed
for redemption is an interest payment date, the interest installment payable on
such date shall be payable to the registered holder at the close of business on
the applicable record date pursuant to Section 2.03).
(b) Upon presentation of any Debenture of such series which is to be
redeemed in part only, the Company shall execute and the Trustee shall
authenticate and the office or agency where the Debenture is presented shall
make available for delivery to the holder
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thereof, at the expense of the Company, a new Debenture or Debentures of the
same series, of authorized denominations in principal amount equal to the
unredeemed portion of the Debenture so presented.
SECTION 3.04. Sinking Funds for Debentures. The provisions or Sections
3.04, 3.05 and 3.06 shall be applicable to any sinking fund for the retirement
of Debentures of a series, except as otherwise specified as contemplated by
section 2.01 for Debentures of such series.
The minimum amount of any sinking fund payment provided for by the terms
of Debentures of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Debentures of any series is herein referred to as on "optional sinking
fund payment". If provided for by the terms of Debentures for any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 3.05. Each sinking fund payment shall be applied to the redemption of
Debentures of any series as provided for by the terms of Debentures of such
series.
SECTION 3.05. Satisfaction of Sinking Fund Payments With Debentures. The
Company (i) may deliver outstanding Debentures of a series (other than any
previously called for redemption) and (ii) may apply as a credit Debentures of a
series which have been redeemed either at the election of the Company pursuant
to the terms of such Debentures or through the application of permitted optional
sinking fund payments pursuant to the terms of such Debentures, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Debentures of such series required to be made pursuant to the terms of such
Debentures as provided for by the terms of such series; provided that such
Debentures have not been previously so credited. Such Debentures shall be
received and credited for such purpose by the Trustee at the redemption price
specified in such Debentures for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 3.06. Redemption of Debentures for Sinking Fund. Not less than 45
days prior to each sinking fund payment date for any series of Debentures, the
Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for that series pursuant to the
terms for that series, the portion thereof, if any, which is to be satisfied by
delivering and crediting Debentures of that series pursuant to Section 3.05 and
the basis for such credit and will, together with such Officers' Certificate,
deliver to the Trustee any Debentures to be so delivered. Not less than 30 days
before each such sinking fund payment date the Trustee shall select the
Debentures to be redeemed upon such sinking fund payment date in the manner
specified in Section 3.02 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Company in the manner provided in
Section 3.02. Such notice having
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been duly given, the redemption of such Debentures shall be made upon the terms
and in the manner stated in Section 3.03.
ARTICLE 4
PARTICULAR COVENANTS OF THE COMPANY
The Company covenants and agrees for each series of the Debentures as follows:
SECTION 4.01. Payment of Principal of (And Premium, if any) and Interest
on Debentures. The Company will duly and punctually pay or cause to be paid the
principal of (and premium, if any) and interest on the Debentures of that series
at the time and place and in the manner provided herein and established with
respect to such Debentures.
SECTION 4.02. Maintenance of Office or Agent for Payment of Debentures,
Designation of Office or Agency for Payment, Registration, Transfer and Exchange
of Debentures. So long as any series of the Debentures remain outstanding, the
Company agrees to maintain an office or agency in the Borough of Manhattan, The
City and State of New York, with respect to each such series and at such other
location or locations as may be designated as provided in this Section 4.02,
where (i) Debentures of that series may be presented for payment, (ii)
Debentures of that series may be presented as herein above authorized for
registration of transfer and exchange, and (iii) notices and demands to or upon
the Company in respect of the Debentures of that series and this Indenture may
be given or served, such designation to continue with respect to such office or
agency until the Company shall, by written notice signed by its President or a
Vice President and delivered to the Trustee, designate some other office or
agency for such purposes or any of them. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
notices and demands.
SECTION 4.03. Duties of Paying Agent; Company as Payment Agent; and
Holding Sums of Trust. (a) If the Company shall appoint one or more paying
agents for all or any series of the Debentures, other than the Trustee, the
Company will cause each such paying agency to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section:
(1) that it will hold all sums held by it as such agent for the
payment of the principal of (and premium, if any) or interest on the
Debentures of that series (whether such sums have been paid to it by
the Company or by any
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other obligor of such Debentures) in trust for the benefit of the
persons entitled thereto:
(2) that it will give the Trustee written notice of any failure by
the Company (or by any other obligor of such Debentures) to make any
payment of the principal of (and premium, if any) or interest on the
Debentures of that series when the same shall be due and payable;
(3) that it will, at any time during the continuance of any failure
referred to in the preceding paragraph (a)(2) above, upon the
written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such paying agent; and
(4) that it will perform all other duties of paying agent as set
forth in this Indenture.
(b) If the Company shall act as its own paying agent with respect to any
series of the Debentures, it will on or before each due date of the principal of
(and premium, if any) or interest on Debentures of that series, set aside,
segregate and hold in trust for the benefit of the persons entitled thereto a
sum sufficient to pay such principal (and premium, if any) or interest so
becoming due on Debentures of that series until such sums shall be paid to such
persons or otherwise disposed of as herein provided and will promptly notify in
writing the Trustee of such action, or any failure (by it or any other obligor
on such Debentures) to take such action. Whenever the Company shall have one or
more paying agents for any series of Debentures, it will, prior to each due date
of the principal of (and premium, if any) or interest on any Debentures of that
series, deposit with the paying agent a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due, such sum to be held in trust for
the benefit of the persons entitled to such principal, premium or interest, and
(unless such paying agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
(c) Anything in this Section to the contrary notwithstanding, (i) the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Section 11.05, and (ii) the Company may at any time, for the
purpose of obtaining the satisfaction and discharge of this Indenture or for any
other purpose, pay, or direct any paying agent to pay, to the Trustee all sums
held in trust by the Company or such paying agent, such sums to be held by the
Trustee upon the same terms and conditions as those upon which such sums were
held by the Company or such paying agent; and, upon such payment by any paying
agent to the Trustee, such paying agent shall be released from all further
liability with respect to such money.
SECTION 4.04. Appointment to Fill Vacancy in Office of Trustee. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the
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manner provided in Section 7.10, a Trustee, so that there shall at all times be
a Trustee hereunder.
ARTICLE 5
DEBENTUREHOLDER'S LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
SECTION 5.01. Company to Furnish Trustee Information as to Names and
Addresses of Debentures. The Company will furnish or cause to be furnished to
the Trustee (a) on a monthly basis on each regular record date (as defined in
Section 2.03) a list, in such form as the Trustee may reasonably require, of the
names and addresses of the holders of each series of Debentures as of such
regular record date, provided, that the Company shall not be obligated to
furnish or cause to furnish such list at any time that the list shall not differ
in any respect from the most recent list furnished to the Trustee by the Company
and (b) at such other times as the Trustee may request in writing within 30 days
after the receipt by the Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the time such list is
furnished; provided, however, no such list need be furnished for any series for
which the Trustee shall be the Debenture Registrar.
SECTION 5.02. Trustee to Preserve Information as to Names and Addresses of
Debentureholders. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Debentures contained in the most recent list furnished to it as
provided in Section 5.01 and as to the names and addresses of holders of
Debentures received by the Trustee in its capacity as Debenture Registrar (if
acting in such capacity).
(b) The Trustee may destroy any list furnished to it as provided in
Section 5.01 upon receipt of a new list so furnished.
(c) In case three or more holders of Debentures of a series (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Debenture for a
period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other holders
of Debentures of such series or holders of all Debentures with respect to their
rights under this Indenture or under such Debentures, and is accompanied by a
copy of the form of proxy or other communication which such applicants propose
to transmit, then the Trustee shall within five business days after the receipt
of such application, at its election, either:
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(1) afford to such applicants access to the information preserved at
the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 5.02; or
(2) inform such applicants as to the approximate number of holders
of Debentures of such series or of all Debentures, as the case may
be, whose names and addresses appear in the information preserved at
the time by the Trustee, in accordance with the provisions of
subsection (a) of this Section 5.02, and as to the approximate cost
of mailing to such Debentureholders the form of proxy or other
communication, if any, specified in such application.
(d) If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each holder of such series or of all Debentures, as the case
may be, whose name and address appears in the information preserved at the time
by the Trustee in accordance with the provisions of subsection (a) of this
Section 5.02, a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender, the Trustee shall mail to such applicants and file with the
Securities and Exchange Commission (the "Commission"), together with a copy of
the material to be mailed, a written statement to the effect that, in the
opinion of the Trustee, such mailing would be contrary to the best interests of
the holders of Debentures of such series or of all Debentures, as the case may
be, or would be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after opportunity for a
hearing upon the objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or if, after the entry
of an order sustaining one or more of such objections, the Commission shall
find, after notice and opportunity for hearing, that all the objections so
sustained have been met and shall enter an order so declaring, the Trustee shall
mail copies of such material to all such Debentureholders with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise, the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.
(e) Each and every holder of the Debentures, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any paying agent nor any Debenture Registrar shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the holders of Debentures in accordance with the provisions of
subsection (b) of this Section, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under said subsection
(b).
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SECTION 5.03. Annual and Other Reports to Be Filed by Company With
Trustee. (a) The Company covenants and agrees to file with the Trustee, within
15 days after the Company is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company may be
required to file with the Commission pursuant to Section 13 or Section 15 (d) of
the Exchange Act; or, if the Company is not required to file information,
documents or reports pursuant to either of such sections, then to file with the
Trustee and the Commission in accordance with the rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act, in respect of a security listed and registered
on a national securities exchange as may be prescribed from time to time in such
rules and regulations. Delivery of such reports, information and documents to
the Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein,
including the Company's compliance with any of its covenants hereunder (as to
which the Trustee is entitled to rely exclusively on Officers' Certificates).
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time to
time by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations.
(c) The Company covenants and agrees to transmit by mail, first class
postage prepaid, or reputable over-night delivery service which provides for
evidence of receipt, to the Debentureholders, as their names and addresses
appear upon the Debenture Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports required
to be filed by the Company pursuant to subsections (a) and (b) of this Section
as may be required by rules and regulations prescribed from time to time by the
Commission.
(d) The Company covenants and agrees to furnish to the Trustee, on or
before May 15 in each calendar year in which any of the Debentures are
outstanding, or on or before such other day in each calendar year as the Company
and the Trustee may from time to time agree upon, a Certificate as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Indenture. For purposes of this subsection (d), such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture.
SECTION 5.04. Trustee to Transmit Annual Report to Debentureholders. (a)
On or before July 15 in each year in which any of the Debentures are
outstanding, the Trustee shall transmit by mail, first class postage prepaid, to
the Debentureholders, as their names
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and addresses appear upon the Debenture Register, a brief report dated as of the
preceding May 15, with respect to any of the following events which may have
occurred within the previous twelve months (but if no such event has occurred
within such period no report need be transmitted):
(1) any change to its eligibility under Section 7.09, and its
qualifications under Section 7.08;
(2) the creation of or any material change to a relationship
specified in paragraphs (1) through (10) of subsection (c) of
Section 7.08;
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) which remain unpaid on the
date of such report, and for the reimbursement of which it claims or
may claim a lien or charge, prior to that of the Debentures, on any
property or funds held or collected by it as Trustee if such
advances so remaining unpaid aggregate more than 1/2 of 1% of the
principal amount of the Debentures outstanding on the date of such
report;
(4) any change to the amount, interest rate, and maturity date of
all other indebtedness owing by the Company, or by any other obligor
on the Debentures, to the Trustee in its individual capacity, on the
date of such report, with a brief description of any property held
as collateral security therefor, except any indebtedness based upon
a creditor relationship arising in any manner described in paragraph
(2), (3), (4), or (6) of subsection (b) of Section 7.13;
(5) any change to the property and funds, if any, physically in the
possession of the Trustee as such on the date of such report;
(6) any release, or release and substitution, of property subject to
the lien of this Indenture (and the consideration thereof, if any)
which it has not previously reported;
(7) any additional issue of Debentures which the Trustee has not
previously reported; and
(8) any action taken by the Trustee in the performance of its duties
under this Indenture which it has not previously reported and which
in its opinion materially affects the Debentures or the Debentures
of any series, except any action in respect of a default, notice of
which has been or is to be withheld by it in accordance with the
provisions of Section 6.07.
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(b) The Trustee shall transmit by mail, first class postage prepaid, to
the Debentureholders, as their names and addresses appear upon the Debenture
Register, a brief report with respect to the character and amount of any
advances (and if the Trustee elects so to state, the circumstances surrounding
the making thereof) made by the Trustee as such since the date of the last
report transmitted pursuant to the provisions of subsection (a) of this Section
(or if no such report has yet been so transmitted, since the date of execution
of this Indenture), for the reimbursement of which it claims or may claim a lien
or charge prior to that of the Debentures of any series on property or funds
held or collected by it as Trustee, and which it has not previously reported
pursuant to this subsection if such advances remaining unpaid at any time
aggregate more than 10% of the principal amount of Debentures of such series
outstanding at such time, such report to be transmitted within 90 days after
such time.
(c) A copy of each such report shall, at the time of such transmission to
Debentureholders, be filed by the Trustee with the Company, with each stock
exchange upon which any Debentures are listed (if so listed) and also with the
Commission. The Company agrees to notify the Trustee when any Debentures become
listed on any stock exchange.
ARTICLE 6
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON EVENT OF DEFAULT
SECTION 6.01. Events of Default Defined. (a) Whenever used herein with
respect to Debentures of a particular series, "Event of Default" means any one
or more of the following events which has occurred and is continuing:
(1) default in the payment of any installment of interest upon any
of the Debentures of that series, as and when the same shall become
due and payable, and continuance of such default for a period of 30
days; provided, however, that a valid extension of an interest
payment period by the Company in accordance with the terms of any
indenture supplemental hereto, shall not constitute a default in the
payment of interest for this purpose;
(2) default in the payment of the principal of (or premium, if any,
on) any of the Debentures of that series as and when the same shall
become due and payable whether at maturity, upon redemption, by
declaring or otherwise, or in any payment required by any sinking or
analogous fund established with respect to that series;
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(3) failure on the part of the Company duly to observe or perform
any other of the covenants or agreements on the part of the Company
with respect to that series contained in such Debentures or
otherwise established with respect to that series of Debentures
pursuant to Section 2.01 hereof or contained in this Indenture
(other than a covenant or agreement which has been expressly
included in this Indenture solely for the benefit of one or more
series of Debentures other than such series) for a period of 90 days
after the date on which written notice of such failure, requiring
the same to be remedied and stating that such notice is a "Notice of
Default" hereunder, shall have been given to the Company by the
Trustee, by registered or certified mail, or to the Company and the
Trustee by the holders of at least 25% in principal amount of the
Debentures of that series at the time outstanding;
(4) a decree or order by a court having jurisdiction in the premises
shall have been entered adjudging the Company as bankrupt or
insolvent, or approving as properly filed a petition seeking
liquidation or reorganization of the Company under the Federal
Bankruptcy Code or any other similar applicable Federal or State
law, and such decree or order shall have continued unvacated and
unstayed for a period of 90 days; or an involuntary case shall be
commenced under such Code in respect of the Company and shall
continue undismissed for a period of 90 days or an order for relief
in such case shall have been entered; or a decree or order of a
court having jurisdiction in the premises shall have been entered
for the appointment on the ground of insolvency or bankruptcy of a
receiver or custodian or liquidator or trustee or assignee in
bankruptcy or insolvency of the Company or of its property, or for
the winding up or liquidation of its affairs, and such decree or
order shall have remained in force unvacated and unstayed for a
period of 90 days; or
(5) the Company shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or consent
seeking liquidation or reorganization under the Federal Bankruptcy
Code or any other similar applicable Federal or State law, or shall
consent to the filing of any such petition, or shall consent to the
appointment on the ground of insolvency or bankruptcy of a receiver
or custodian or liquidator or trustee or assignee in bankruptcy or
insolvency of it or of its property, or shall make an assignment for
the benefit of creditors.
(b) In each and every such case, unless the principal of all the
Debentures of that series shall have already become due and payable, either the
Trustee or the holders of not less than 25% in aggregate principal amount of the
Debentures of that series then
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outstanding hereunder, by notice in writing to the Company (and to the Trustee
if given by such Debentureholders), may declare the principal of all the
Debentures of that series to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything contained in this Indenture or in the Debentures of that series or
established with respect to that series pursuant to Section 2.01 hereof to the
contrary notwithstanding.
(c) Section 6.01(b), however, is subject to the condition that if, at any
time after the principal of the Debentures of that series shall have been so
declared due and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of interest upon all the Debentures of that series and the
principal of (and premium, if any, on) any and all Debentures of that series
which shall have become due otherwise than by acceleration (with interest upon
such principal and premium, if any, and, to the extent that such payment is
enforceable under applicable law, upon overdue installments of interest, at the
rate per annum expressed in the Debentures of that series to the date of such
payment or deposit) and the amount payable to the Trustee under Section 7.06,
and any and all defaults under the Indenture, other than the nonpayment of
principal on Debentures of that series which shall not have become due by their
terms, shall have been remedied or waived as provided in Section 6.06 then and
in every such case the holders of a majority in aggregate principal amount of
the Debentures of that series then outstanding (subject to, in the case of any
series of Debentures held as trust assets of a AES Trust and with respect to
which a Security Exchange has not theretofore occurred, such consent of the
holders of the Preferred Securities and the Common Securities of such AES Trust
as may be required under the Declaration of Trust of such AES Trust), by written
notice to the Company and to the Trustee, may rescind and annul such declaration
and its consequences with respect to that series of Debentures; but no such
rescission and annulment shall extend to or shall affect any subsequent default,
or shall impair any right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any right with
respect to Debentures of that series under this Indenture and such proceedings
shall have been discontinued or abandoned because of such rescission or
annulment or for any other reason or shall have been determined adversely to the
Trustee, then and in every such case the Company and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company and the Trustee shall continue as
though no such proceedings had been taken.
(e) If, prior to a Security Exchange with respect to the Debentures of any
series, a Default with respect to the Debentures of such series shall have
occurred, the Company expressly acknowledges that under the circumstances set
forth in the applicable Declaration of Trust, any holder of Preferred Securities
of the applicable AES Trust may enforce directly against the Company the
applicable Property Trustee's rights hereunder.
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In furtherance of the foregoing and for the avoidance of any doubt, the Company
acknowledges that, under the circumstances described in the applicable
Declaration of Trust, any such holder of Preferred Securities, in its own name,
in the name of the applicable AES Trust or in the name of the holders of the
Preferred Securities issued by such AES Trust, may institute or cause to be
instituted a proceeding, including, without limitation, any suit in equity, an
action at law or other judicial or administrative proceeding, to enforce the
applicable Property Trustee's rights hereunder directly against the Company as
issuer of the applicable series of Debentures, and may prosecute such proceeding
to judgment or final decree, and enforce the same against the Company.
SECTION 6.02. Covenant of Company to Pay to Trustee Whole Amount Due on
Debentures on Default in Payment of Interest or Principal (and Premiums, if
any). (a) The Company covenants that (1) in case default shall be made in the
payment of any installment of interest on any of the Debentures of a series, or
any payment required by any sinking or analogous fund established with respect
to that series as and when the same shall have become due and payable, and such
default shall have continued for a period of 10 business days, or (2) in case
default shall be made in the payment of the principal of (or premium, if any,
on) any of the Debentures of a series when the same shall have become due and
payable, whether upon maturity of the Debentures of a series or upon redemption
or upon declaration or otherwise, then, upon demand of the Trustee, the Company
will pay to the Trustee, for the benefit of the holders of the Debentures of
that series, the whole amount that then shall have become due and payable on all
such Debentures for principal (and premium, if any) or interest, or both, as the
case may be, with interest upon the overdue principal (and premium, if any) and
(to the extent that payment of such interest is enforceable under applicable law
and without duplication of any other amounts paid by the Company or the
applicable AES Trust in respect thereof) upon overdue installments of interest
at the rate per annum expressed in the Debentures of that series; and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, and the amount payable to the Trustee under Section
7.06.
(b) In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon the
Debentures of that series and collect in the manner provided by law out of the
property of the Company or other obligor upon the Debentures of that series
wherever situated the moneys adjudged or decreed to be payable.
(c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, readjustment, arrangement, composition or other judicial
proceedings affecting the Company, any other obligor on such Debentures, or the
creditors or property of either, the Trustee shall have the power to intervene
in such proceedings and take any
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action therein that may be permitted by the court and shall (except as may be
otherwise provided by law) be entitled to file such proofs of claim and other
papers and documents as may be necessary or advisable in order to have the
claims of the Trustee and of the holders of Debentures of such series allowed
for the entire amount due and payable by the Company or such other obligor under
the Indenture at the date of institution of such proceedings and for any
additional amount which may become due and payable by the Company or such other
obligor after such date, and to collect and receive any moneys or other property
payable or deliverable on any such claim, and to distribute the same after the
deduction of the amount payable to the Trustee under Section 7.06; and any
receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the holders of Debentures of such series to make such
payments to the Trustee, and, in the event that the Trustee shall consent to the
making of such payments directly to such Debentureholders, to pay to the Trustee
any amount due it under Section 7.06.
(d) All rights of action and of asserting claims under this Indenture, or
under any of the terms established with respect to Debentures of that series,
may be enforced by the Trustee without the possession of any of such Debentures,
or the production thereof at any trial or other proceeding relative thereto, and
any such suit or proceeding instituted by the Trustee shall be brought in its
own name as trustee of an express trust, and any recovery of judgment shall,
after provision for payment to the Trustee of any amounts due under Section
7.06, be for the ratable benefit of the holders of the Debentures of such
series.
In case of an Event of Default hereunder, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in the Indenture or in aid of the exercise
of any power granted in this Indenture, or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Debentureholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Debentures of that series or the rights of any holder thereof or to authorize
the Trustee to vote in respect of the claim of any Debentureholder in any such
proceeding.
SECTION 6.03. Application of Moneys Collected by Trustee. Any moneys
collected by the Trustee pursuant to Section 6.02 with respect to a particular
series of Debentures shall be applied in the order following, at the date or
dates fixed by the Trustee and, in case of the distribution of such moneys on
account of principal (or premium, if any) or interest, upon presentation of the
several Debentures of that series,
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and stamping thereon the payment, if only partially paid, and upon surrender
thereof if fully paid:
FIRST: To the payment of costs and expenses of collection and of all
amounts payable to the Trustee under Section 7.06; and
SECOND: To the payment of the amounts then due and unpaid upon
Debentures of such series for principal (and premium, if any) and
interest, in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Debentures
for principal (and premium, if any) and interest, respectively.
SECTION 6.04. Limitation on Suits by Holders of Debentures. No holder of
any Debenture of any series shall have any right by virtue or by availing of any
provision of this Indenture to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Indenture or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
such holder previously shall have given to the Trustee written notice of an
Event of Default and of the continuance thereof with respect to Debentures of
such series specifying such Event of Default, as hereinbefore provided, and
unless also the holders of not less than 25% in aggregate principal amount of
the Debentures of such series then outstanding shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity, shall have failed to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by the taker and holder of every Debenture of such series
with every other such taker and holder and Trustee, that no one or more holders
of Debentures of such series shall have any right in any manner whatsoever by
virtue or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of the holders of any other of such Debentures, or to
obtain or seek to obtain priority over or preference to any other such holder,
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all holders of
Debentures of such series. For the protection and enforcement of the provisions
of this Section, each and every Debentureholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Notwithstanding any other provisions of this Indenture, however, the right
of any holder of any Debenture to receive payment of the principal of (and
premium, if any) and interest on such Debenture, as therein provided, on or
after the respective due dates expressed in such Debenture (or in the case of
redemption, on the redemption date), or to
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institute suit for the enforcement of any such payment on or after such
respective dates or redemption date, shall not be impaired or affected without
the consent of such holder.
SECTION 6.05. Remedies Cumulative; Delay or Omission in Exercise of Rights
Not Waiver of Default. (a) All powers and remedies given by this Article to the
Trustee or to the Debentureholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any others thereof or of any other powers
and remedies available to the Trustee or the holders of the debentures, by
judicial proceedings or otherwise, to enforce performance or observance of the
covenants and agreements contained in this Indenture or otherwise established
with respect to such Debentures.
(b) No delay or omission of the Trustee or of any holder of any of the
Debentures to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed to be a waiver of any such default or an acquiescence
therein; and, subject to the provisions of Section 6.04, every power and remedy
given by this Article or by law to the Trustee or to the Debentureholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Debentureholders.
SECTION 6.06. Rights of Holders of Majority in Principal Amount of
Debentures to Direct Trustee and to Waive Defaults. The holders of a majority in
aggregate principal amount of the Debentures of any series at the time
outstanding, determined in accordance with Section 8.04 (with, in the case of
any series of Debentures held as trust assets of a AES Trust and with respect to
which a Security Exchange has not theretofore occurred, such consent of holders
of the Preferred Securities and the Common Securities of such AES Trust as may
be required under the Declaration of Trust of such AES Trust), shall have the
right to 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
the Trustee with respect to such series; provided, however, that such direction
shall not be in conflict with any rule of law or with this Indenture or unduly
prejudicial to the rights of holders of Debentures of any other series at the
time outstanding determined in accordance with Section 8.04 not parties thereto.
Subject to the provisions of Section 7.01, the Trustee shall have the right to
decline to follow any such direction if the Trustee in good faith shall, by a
Responsible Officer or Officers of the Trustee, determine that the proceeding so
directed would involve the Trustee in personal liability. The holders of a
majority in aggregate principal amount of the Debentures of any series at the
time outstanding affected thereby, determined in accordance with section 8.04
(with, in the case of any series of Debentures held as trust assets of a AES
Trust and with respect to which a Security Exchange has not theretofore
occurred, such consent of holders of the Preferred Securities and the Common
Securities of such AES Trust as may be required under the Declaration of Trust
of such AES Trust), may on behalf of the holders of all of the Debentures of
such series waive any past default in the performance of any of the covenants
contained herein or established pursuant to section 2.01 with respect to such
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series and its consequences, except a default in the payment of the principal
of, or premium, if any, or interest on, any of the Debentures of that series as
and when the same shall become due by the terms of such Debentures otherwise
than by acceleration (unless such default has been cured and a sum sufficient to
pay all matured installments of interest and principal and any premium has been
deposited with the Trustee (in accordance with Section 6.01(c)) or a call for
redemption of Debentures of that series. Upon any such waiver, the default
covered thereby shall be deemed to be cured for all purposes of this Indenture
and the Company, the Trustee and the holders of the Debentures of such series
shall be restored to their former positions and rights hereunder, respectively;
but no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
SECTION 6.07. Trustee to Give Notice of Defaults Known To It, But May
Withhold in Certain Circumstances. The Trustee shall, within 90 days after the
occurrence of a default with respect to a particular series, transmit by mail,
first class postage prepaid, to the holders of Debentures of that series, as
their names and addresses appear upon the Debenture Register, notice of all
defaults with respect to that series known to the Trustee, unless such defaults
shall have been cured before the giving of such notice (the term "defaults" for
the purposes of this Section being hereby defined to be the events specified in
subsections (1), (2), (3), (4) and (5) of Section 6.01(a), not including any
periods of grace provided for therein and irrespective of the giving of notice
provided for by subsection (3) of Section 6.01(a)); provided, that, except in
the case of default in the payment of the principal of (or premium, if any) or
interest on any of the Debentures of that series or in the payment of any
sinking fund installment established with respect to that series, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors and/or
Responsible Officers, of the Trustee in good faith determine that the
withholding of such notice is in the interests of the holders of Debentures of
that series; provided further, that in the case of any default of the character
specified in Section 6.01(a)(3) with respect to Debentures of such series no
such notice to the holders of the Debentures of that series shall be given until
at least 30 days after the occurrence thereof.
The Trustee shall not be deemed to have knowledge of any default, except
(i) a default under subsection (a)(1) or (a)(2) of Section 6.01 as long as the
Trustee is acting as paying agent for such series of Debentures or (ii) any
default as to which the Trustee shall have received written notice or a
Responsible Officer charged with the administration of this Indenture shall have
obtained written notice.
SECTION 6.08. Requirements of an Undertaking to Pay Costs in Certain Suits
Under Indenture or Against Trustee. All parties to this Indenture agree, and
each holder of any Debentures by his or her acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, 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
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omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Debentureholder, or group of
Debentureholders, holding more than 10% in aggregate principal amount of the
outstanding Debentures of any series, or to any suit instituted by any
Debentureholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Debenture of such series, on or after the
respective due dates expressed in such Debenture or established pursuant to this
Indenture.
ARTICLE 7
CONCERNING THE TRUSTEE
SECTION 7.01. Upon Event of Default Occurring and Continuing, Trustee
Shall Exercise Powers Vested In It, and Use Same Degree of Care and Skill In
Their Exercise, as Prudent Individual Would Use. (a) The Trustee, prior to the
occurrence of an Event of Default with respect to Debentures of a series and
after the curing of all Events of Default with respect to Debentures of that
series which may have occurred, shall undertake to perform with respect to
Debentures of such series such duties and only such duties as are specifically
set forth in this Indenture, and no implied covenants shall be read into this
Indenture against the Trustee. In case an Event of Default with respect to
Debentures of a series has occurred (which has not been cured or waived), the
Trustee shall exercise with respect to Debentures of that series 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 man would exercise or use under
the circumstances in the conduct of his own affairs.
(b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) prior to the occurrence of an Event of Default with respect to
Debentures of a series and after the curing or waiving of all such
Events of Default with respect to that series which may have
occurred:
(i) the duties and obligations of the Trustee shall with
respect to Debentures of such series be determined solely by
the express provisions of this
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Indenture, and the Trustee shall not be liable with respect
to Debentures of such series except for the performance of
such duties and obligations as are specifically set forth in
this Indenture, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may with respect to Debentures of such series
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the
case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Indenture but need not confirm or
investigate the accuracy of mathematical calculations or other
facts stated therein;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
direction of the holders of not less than a majority in principal
amount of the Debentures of any series at the time outstanding
relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee under this Indenture with respect
to the Debentures of that series; and
(4) none of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Indenture or adequate indemnity against such risk is not reasonably
assured to it.
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(5) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of
or affording protection to the Trustee shall be subject to the
provisions of this Article 7.
SECTION 7.02. Subject to Provisions of Section 7.01. Except as otherwise
provided in Section 7.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order,
approval, bond, security or other paper or document believed by it
to the genuine and to have been signed or presented by the proper
party or parties;
(b) Any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Board
Resolution or an instrument signed in the name of the Company by the
President or any Vice President and by the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer (unless other
evidence in respect thereof is specifically prescribed herein);
(c) The Trustee may consult with counsel of its selection and
the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection in respect of any
action taken or suffered or omitted hereunder in good faith and in
reliance thereon;
(d) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Debentureholders, pursuant
to the provisions of this Indenture, unless such Debentureholders
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred
therein or thereby; nothing herein contained shall, however, relieve
the Trustee of the obligation, upon the occurrence of an Event of
Default with respect to a series of the Debentures (which has not
been cured or waived) to exercise with respect to Debentures of that
series such of the rights and powers vested in it by this Indenture,
and to use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the
conduct of his own affairs;
(e) The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred
upon it by this Indenture;
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(f) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, security, or other papers or documents,
unless requested in writing so to do by the holders of not less than
a majority in principal amount of the outstanding Debentures of the
particular series affected thereby (determined as provided in
Section 8.04); provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee
by the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such costs,
expenses or liabilities as a condition to so proceeding. The
reasonable expense of every such examination shall be paid by the
Company or, if paid by the Trustee, shall be repaid by the Company
upon demand; and
(g) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder.
SECTION 7.03. Trustee Not Liable for Recitals In Indenture Or In
Debentures. (a) The recitals contained herein and in the Debentures (other than
the Certificate of Authentication on the Debentures) shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same.
(b) The Trustee makes no representations as to the validity or sufficiency
of this Indenture or of the Debentures.
(c) The Trustee shall not be accountable for the use or application by the
Company of any of the Debentures or of the proceeds of such Debentures, or for
the use or application of any moneys paid over by the Trustee in accordance with
any provision of this Indenture or established pursuant to Section 2.01, or for
the use or application of any moneys received by any paying agent other than the
Trustee.
SECTION 7.04. Trustee, Paying Agent or Debenture Registrar May Own
Debentures. The Trustee or any paying agent or Debenture Registrar, in its
individual or any other capacity, may become the owner or pledgee of Debentures
with the same rights it would have if it were not Trustee, paying agent or
Debenture Registrar.
SECTION 7.05. Moneys Received by Trustee to Be Held In Trust Without
Interest. Subject to the provisions of Section 11.04, all moneys received by the
Trustee shall, until
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used or applied as herein provided, be held in trust for the purposes for which
they were received, but need not be segregated from other funds except to the
extent required by law. The Trustee shall be under no liability for interest on
any moneys received by it hereunder except such as it may agree with the Company
to pay thereon.
SECTION 7.06. Trustee Entitled to Compensation, Reimbursement and
Indemnity. (a) The Company covenants and agrees to pay to the Trustee from time
to time, and the Trustee shall be entitled to, such reasonable compensation as
the Company and the Trustee shall from time to time agree in writing (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it in the execution of
the trusts hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or bad faith. The Company also covenants to indemnify
the Trustee (and its officers, agents, directors and employees) for, and to hold
it harmless against, any loss, liability or expense including taxes (other than
taxes based upon, measured by or determined by the income of the Trustee)
incurred without negligence or bad faith on the part of the Trustee and arising
out of or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim of
liability in the premises.
(b) The obligations of the Company under this Section to compensate and
indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior to that of the
Debentures upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the holders of particular
Debentures.
SECTION 7.07. Right of Trustee to Rely on Certificate of Officers of
Company Where No Other Evidence Specifically Prescribed. Except as otherwise
provided in Section 7.01, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting to take any
action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of negligence or bad faith
on the part of the Trustee, be deemed to be conclusively proved and established
by an Officers' Certificate delivered to the Trustee and such certificate, in
the absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted to be taken by
it under the provisions of this Indenture upon the faith thereof.
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SECTION 7.08. Trustee Acquiring Conflicting Interest to Eliminate Conflict
or Resign. (a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section, with respect to the Debentures of any series and if the
Default to which such conflicting interest relates has not been cured, duly
waived or otherwise eliminated, within 90 days after ascertaining that it has
such conflicting interest, it shall either eliminate such conflicting interest,
except as otherwise provided herein, or resign with respect to the Debentures of
that series in the manner and with the effect specified in Section 7.10 and the
Company shall promptly appoint a successor Trustee in the manner provided
herein.
(b) In the event that the Trustee shall fail to comply with the provisions
of subsection (a) of this Section, with respect to the Debentures of any series
the Trustee shall, within ten days after the expiration of such 90-day period,
transmit notice of such failure by mail, first class postage prepaid, to the
Debentureholders of that series as their names and addresses appear upon the
registration books.
(c) For the purposes of this Section the Trustee shall be deemed to have a
conflicting interest with respect to the Debentures of any series if a Default
has occurred and is continuing and:
(1) the Trustee is trustee under this Indenture with respect to the
outstanding Debentures of any series other than that series, or is
trustee under another indenture under which any other securities, or
certificates of interest or participation in any other securities,
of the Company are outstanding, unless such other indenture is a
collateral trust indenture under which the only collateral consists
of Debentures issued under this Indenture; provided that there shall
be excluded from the operation of this paragraph the Debentures of
any series other than that series and any other indenture or
indentures under which other securities, or certificates of interest
or participation in other securities, of the Company are outstanding
if (i) this Indenture and such other indenture or indentures and all
series of securities issuable thereunder are wholly unsecured and
rank equally and such other indenture or indentures (and such
series) are hereafter qualified under the Trust Indenture Act,
unless the Commission shall have found and declared by order
pursuant to subsection (b) of Section 305 or subsection (c) of
Section 307 of the Trust Indenture Act, that differences exist
between (A) the provisions of this Indenture with respect to
Debentures of that series and with respect to one or more other
series or (B) the provisions of this Indenture and the provisions of
such other indenture or indentures (or such series), which are so
likely to involve a material conflict of interest as to make it
necessary in the public interest or for the protection of investors
to disqualify the Trustee from acting as such under this Indenture
with respect to the Debentures of that series and such other series
or such other indenture or indentures, or (ii) the Company shall
have
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sustained the burden of proving, on application to the Commission
and after opportunity for hearing thereon, that the trusteeship
under this Indenture with respect to Debentures of that series and
such other series or such other indenture or indentures is not so
likely to involve a material conflict of interest as to make it
necessary in the public interest or for the protection of investors
to disqualify the Trustee from acting as such under this Indenture
with respect to Debentures of that series and such other series or
under such other indentures;
(2) the Trustee or any of its directors or executive officers is an
underwriter for the Company;
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common
control with or an underwriter for the Company;
(4) the Trustee or any of its directors or executive officers is a
director, officer, partner, employee, appointee or representative of
the Company, or of an underwriter (other than the Trustee itself)
for the Company who is currently engaged in the business of
underwriting, except that (A) one individual may be a director
and/or an executive officer of the Trustee and a director and/or an
executive officer of the Company, but may not be at the same time an
executive officer of both the Trustee and the Company; (B) if and so
long as the number of directors of the Trustee in office is more
than nine, one additional individual may be a director and/or an
executive officer of the Trustee and a director of the Company; and
(C) the Trustee may be designated by the Company or by an
underwriter for the Company to act in the capacity of transfer
agent, registrar, custodian, paying agent, fiscal agent, escrow
agent, or depository, or in any other similar capacity, or, subject
to the provisions of paragraph (1) of this subsection (c), to act as
trustee whether under an indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director,
partner, or executive officer thereof, or 20% or more of such voting
securities is beneficially owned, collectively, by any two or more
of such persons; or 10% or more of the voting securities of the
Trustee is beneficially owned either by an underwriter for the
Company or by any director, partner, or executive officer thereof,
or is beneficially owned, collectively by any two or more such
persons;
(6) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in
this subsection (c)
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defined), (A) 5% or more of the voting securities, or 10% or more of
any other class of security, of the Company, not including the
Debentures issued under this Indenture and securities issued under
any other indenture under which the Trustee is also trustee, or (B)
10% or more of any class of security of an underwriter for the
Company;
(7) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in
this subsection (c) defined), 5% or more of the voting securities of
any person who, to the knowledge of the Trustee, owns 10% or more of
the voting securities of, or controls directly or indirectly or is
under direct or indirect common control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in
this subsection (c) defined), 10% or more of any class of security
of any person who, to the knowledge of the Trustee, owns 50% or more
of the voting securities of the Company;
(9) the Trustee owns, on the date of Default upon the Debentures of
any series or any anniversary of such Default while such Default
upon the Debentures issued under this Indenture remains outstanding,
in the capacity of executor, administrator, testamentary or inter
vivos trustee, guardian, committee or conservator, or in any other
similar capacity, an aggregate of 25% or more of the voting
securities, or of any class of security, of any person, the
beneficial ownership of a specified percentage of which would have
constituted a conflict of interest under paragraph (6), (7), or (8)
of this subsection (c). As to any such securities of which the
Trustee acquired ownership through becoming executor, administrator
or testamentary trustee of an estate which includes them, the
provisions of the preceding sentence shall not apply, for a period
of two years from the date of such acquisition, to the extent that
such securities in such estate do not exceed 25% of such voting
securities or 25% of any such class of security. Promptly after the
dates of any such Default upon the Debentures issued under this
Indenture and annually in each succeeding year that the Debentures
issued under this Indenture remain in Default, the Trustee shall
make a check of its holding of such securities in any of the
above-mentioned capacities as of such dates. If the Company fails to
make payment in full of principal of or interest on any of the
Debentures when and as the same becomes due and payable, and such
failure continues for 30 days thereafter, the Trustee shall make a
prompt check of its holding of such securities in any of the
above-mentioned capacities as of the date of the expiration of such
30-day period, and after such date, notwithstanding
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the foregoing provisions of this paragraph (9), all such securities
so held by the Trustee, with sole or joint control over such
securities vested in it, shall, but only so long as such failure
shall continue, be considered as though beneficially owned by the
Trustee for the purposes of paragraphs (6), (7) and (8) of this
subsection (c); or
(10) except under the circumstances described in paragraph (1), (3),
(4), (5) or (6) of subsection (b) of Section 7.13 the Trustee shall
be or shall become a creditor of the Company.
For purposes of paragraph (1) of this subsection (c), and of Section 6.06,
the term "series of securities" or "securities" means a series, class or group
of securities issuable under an indenture pursuant to whose terms holders of one
such series may vote to direct the indenture trustee, or otherwise take action
pursuant to a vote of such holders, separately from holders of another such
series; provided, that, "series of securities" or "series" shall not include any
series of securities issuable under an indenture if all such series rank equally
and are wholly secured.
The specification of percentages in paragraphs (5) to (9), inclusive, of
this subsection (c) shall not be construed as indicating that the ownership of
such percentages of securities of a person is or is not necessary or sufficient
to constitute direct or indirect control for the purposes of paragraph (3) or
(7) of this subsection (c).
For the purposes of paragraphs (6), (7), (8) and (9) of this subsection
(c) only, (A) the terms "security" and "securities" shall include only such
securities as are generally known as corporate securities, but shall not include
any note or other evidence of indebtedness issued to evidence an obligation to
repay moneys lent to a person by one or more banks, trust companies or banking
firms, or any certificate of interest or participation in any such note or
evidence of indebtedness; (B) an obligation shall be deemed to be in "default",
when a default in payment of principal shall have continued for 30 days or more
and shall not have been cured; and (C) the Trustee shall not be deemed to be the
owner or holder of (i) any security which it holds as collateral security (as
trustee or otherwise) for any obligation which is not in default as defined in
clause (B) above, or (ii) any security which it holds as collateral security
under this Indenture, irrespective of any Default hereunder, or (iii) any
security which it holds as agent for collection, or as custodian, escrow agent
or depositary, or in any similar representative capacity.
Except as above provided, the word "security" or securities" as used in
this Indenture shall mean any note, stock, treasury stock, bond, debenture,
evidence of indebtedness, certificate of interest or participation in any
profit-sharing agreement, collateral trust certificate, pre-organization
certificate or subscription, transferable share, investment contract, voting
trust certificate, certificate of deposit for a security, fractional undivided
interest in oil, gas, or other mineral rights, or, in general, any interest or
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instrument commonly known as a "security", or any certificate of interest or
participation in, temporary or interim certificate for, receipt for, guarantee
of, or warrant or right to subscribe to or purchase, any of the foregoing.
(d) For the purposes of this Section:
(1) The term "underwriter" when used with reference to the Company
shall mean every person, who, within one year prior to the time as
of which the determination is made, has purchased from the Company
with a view to, or has offered or sold for the Company in connection
with, the distribution of any security of the Company, or has
participated or has had a direct or indirect participation in any
such undertaking, or has participated or has had a participation in
the direct or indirect underwriting of any such undertaking, but
such term shall not include a person whose interest was limited to a
commission from an underwriter or dealer not in excess of the usual
and customary distributors' or sellers' commission.
(2) The term "director" shall mean any member of the board of
directors of a corporation or any individual performing similar
functions with respect to any organization whether incorporated or
unincorporated.
(3) The term "person" shall mean an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an
unincorporated organization or a government or political subdivision
thereof. As used in this paragraph, the term "trust" shall include
only a trust where the interest or interests of the beneficiary or
beneficiaries are evidenced by a security.
(4) The term "voting security" shall mean any security presently
entitling the owner or holder thereof to vote in the direction or
management of the affairs of a person, or any security issued under
or pursuant to any trust, agreement or arrangement whereby a trustee
or trustees or agent or agents for the owner or holder of such
security are presently entitled to vote in the direction or
management of the affairs of a person.
(5) The term "Company" shall mean any obligor upon the Debentures.
(6) The term "executive officer" shall mean the chairman of the
board of directors, president, every vice president, every assistant
vice president, every trust officer, the cashier, the secretary, and
the treasurer of a corporation, and any individual customarily
performing similar functions with respect to any organization
whether incorporated or unincorporated.
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(e) The percentages of voting securities and other securities specified in
this Section shall be calculated in accordance with the following provisions:
(1) A specified percentage of the voting securities of the Trustee,
the Company or any other person referred to in this Section (each of
whom is referred to as a "person" in this paragraph) means such
amount of the outstanding voting securities of such person as
entitles the holder or holders thereof to cast such specified
percentage of the aggregate votes which the holders of all the
outstanding voting securities of such person are entitled to cast in
the direction or management of the affairs of such person.
(2) A specified percentage of a class of securities of a person
means such percentage of the aggregate amount of securities of the
class outstanding.
(3) The term "amount", when used in regard to securities, means the
principal amount if relating to evidences of indebtedness, the
number of shares if relating to capital shares and the number of
units if relating to any other kind of security.
(4) The term "outstanding" means issued and not held by or for the
account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund relating
to another class of securities of the issuer, if the
obligation evidenced by such other class of securities is not
in default as to principal or interest or otherwise;
(iii) securities pledged by the issuer thereof as security for
an obligation of the issuer not in default as to principal or
interest or otherwise; and
(iv) securities held in escrow if placed in escrow by the
issuer thereof, provided, however, that any voting securities
of an issuer shall be deemed outstanding if any person other
than the issuer is entitled to exercise the voting rights
thereof.
(5) A security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders
thereof substantially the
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same rights and privileges; provided, however, that, in the case of
secured evidences of indebtedness, all of which are issued under a
single indenture, differences in the interest rates or maturity
dates of various series thereof shall not be deemed sufficient to
constitute such series different classes; and provided, further,
that, in the case of unsecured evidences of indebtedness,
differences in the interest rates or maturity dates thereof shall
not be deemed sufficient to constitute them securities of different
classes, whether or not they are issued under a single indenture.
(f) Except in the case of a default in the payment of the principal of (or
premium, if any) or interest on any Debentures issued under this Indenture, or
in the payment of any sinking or analogous fund installment, the Trustee shall
not be required to resign as provided by this Section 7.08 if such Trustee shall
have sustained the burden of proving, on application to the Commission and after
opportunity for hearing thereon, that (i) the default under the Indenture may be
cured or waived during a reasonable period and under the procedures described in
such application and (ii) a stay of the Trustee's duty to resign will not be
inconsistent with the interests of Debentureholders. The filing of such an
application shall automatically stay the performance of the duty to resign until
the Commission orders otherwise.
Any resignation of the Trustee shall become effective only upon the
appointment of a successor trustee and such successor's acceptance of such an
appointment.
SECTION 7.09. Requirements for Eligibility of Trustee. There shall at all
times be a Trustee with respect to the Debentures issued hereunder which shall
at all times be a corporation organized and doing business under the laws of the
United States of America or any State or Territory thereof or of the District of
Columbia, or a corporation or other person permitted to act as trustee by the
Commission, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million dollars, and
subject to supervision or examination by Federal, State, Territorial, or
District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. The Company may not, nor may any person directly or
indirectly controlling, controlled by, or under common control with the Company,
serve as Trustee. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 7.10.
SECTION 7.10. Resignation of Trustee and Appointment of Successor. (a) The
Trustee or any successor hereafter appointed, may at any time resign with
respect to the Debentures of one or more series by giving written notice thereof
to the Company and by
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transmitting notice of resignation by mail, first class postage prepaid, to the
Debentureholders of such series, as their names and addresses appear upon the
Debenture Register. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee with respect to Debentures of such series
by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment within 30 days after the
mailing of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee with
respect to Debentures of such series, or any Debentureholder of that series who
has been a bona fide holder of a Debenture or Debentures for at least six months
may, subject to the provisions of Section 6.08, on behalf of himself and all
others similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon after such notice, if any, as it may
deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of
subsection (a) of Section 7.08 after written request therefor by the
Company or by any Debentureholder who has been a bona fide holder of
a Debenture or Debentures for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.09 and shall fail to resign after written
request therefor by the Company or by any such Debentureholder; or
(3) the Trustee shall become incapable of acting, or shall be
adjudged bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then, in
any such case, the Company may remove the Trustee with respect to
all Debentures and appoint a successor trustee by written
instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee. If no
successor trustee shall have been so appointed and have accepted
appointment within 30 days after the mailing of such notice of
removal, the Trustee so removed may petition any court of competent
jurisdiction for the appointment of a successor trustee with respect
to Debentures of such series, or any Debentureholder of that series
who has been a bona fide holder of a Debenture or Debentures for at
least six months may, subject to the provisions of Section 6.08, on
behalf of himself and all others similarly situated, petition any
such court for the removal of the Trustee and the
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appointment of a successor trustee. Such court may thereupon after
such notice, if any, as it may deem proper and prescribe, remove the
Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debentures of any series at the time outstanding may at any time remove the
Trustee with respect to such series and appoint a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Debentures of a series pursuant to any of
the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section may be
appointed with respect to the Debentures of one or more series or all of such
series, and at any time there shall be only one Trustee with respect to the
Debentures of any particular series.
SECTION 7.11. Acceptance by Successor to Trustee. (a) In case of the
appointment hereunder of a successor trustee with respect to all Debentures,
every such successor trustee so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
successor trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor trustee all the
rights, powers, and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor trustee all property and money held by
such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor trustee with
respect to the Debentures of one or more (but not all) series, the Company, the
retiring Trustee and each successor trustee with respect to the Debentures of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor trustee shall accept such appointment and which shall (1)
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Debentures of that
or those series to which the appointment of such successor trustee relates, (2)
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Debentures of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental
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indenture shall constitute such Trustees co-trustees of the same trust, that
each such Trustee shall be trustee of a trust or trusts hereunder separate and
apart from any trust or trusts hereunder administered by any other such Trustee
and that no Trustee shall be responsible for any act or failure to act on the
part of any other Trustee hereunder; and upon the execution and delivery of such
supplemental indenture the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein, such retiring Trustee shall
with respect to the Debentures of that or those series to which the appointment
of such successor trustee relates have no further responsibility for the
exercise of rights and powers or for the performance of the duties and
obligations vested in the Trustee under this Indenture, and each such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Debentures of that or those series to which the appointment of such
successor trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor trustee, to the extent contemplated by such supplemental indenture,
the property and money held by such retiring Trustee hereunder with respect to
the Debentures of that or those series to which the appointment of such
successor trustee relates.
(c) Upon request of any such successor trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor trustee all such rights, power and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor trustee shall accept its appointment unless at the time
of such acceptance such successor trustee shall be qualified and eligible under
this Article.
(e) Upon acceptance of appointment by a successor trustee as provided in
this Section, the Company shall transmit notice of the succession of such
trustee hereunder by mail, first class postage prepaid, to the Debentureholders,
as their names and addresses appear upon the Debenture Register. If the Company
fails to transmit such notice within ten days after acceptance of appointment by
the successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company.
SECTION 7.12. Successor to Trustee by Merger, Consolidation or Succession
to Business. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to substantially all of the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be qualified under the provisions of Section 7.08 and eligible
under the provisions of Section 7.09, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding. In case any Debentures shall have been
authenticated, but not made available for delivery, by the Trustee then in
office, any
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successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and make available for delivery the Debentures so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Debentures.
SECTION 7.13. Limitations on Rights of Trustee as a Creditor to Obtain
Payment of Certain Claims Within Four Months Prior to Default or During Default,
or to Realize on Property as such Creditor Thereafter. (a) Subject to the
provisions of subsection (b) of this Section, if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the Company
within three months prior to a default, as defined in subsection (b) of this
Section, or subsequent to such a default, then, unless and until such default
shall be cured, the Trustee shall set apart and hold in a special account for
the benefit of the Trustee individually, the holders of the Debentures and the
holders of other indenture securities (as defined in subsection (c) of this
Section):
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or
interest, effected after the beginning of such three months' period
and valid as against the Company and its other creditors, except any
such reduction resulting from the receipt or disposition of any
property described in paragraph (2) of this subsection, or from the
exercise of any right of set-off which the Trustee could have
exercised if a petition in bankruptcy had been filed by or against
the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such three
months' period, or an amount equal to the proceeds of any such
property, if disposed of, subject, however, to the rights, if any,
of the Company and its other creditors in such property or such
proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account of
any such claim by any person (other than the Company) who is liable
thereon, and (ii) the proceeds of the bona fide sale of any such
claim by the Trustee to a third person, and (iii) distributions made
in cash, securities, or other property in respect of claims filed
against the Company in bankruptcy or receivership or in a case for
reorganization pursuant to the Federal Bankruptcy Code or applicable
State law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to
the beginning of such three months' period;
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(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was created after the
beginning of such three months' period and such property was
received as security therefor simultaneously with the creation
thereof, and if the Trustee shall sustain the burden of proving that
at the time such property was so received the Trustee had no
reasonable cause to believe that a default, as defined in subsection
(c) of this Section, would occur within three months; or
(D) to receive payment on any claim referred to in paragraph (B) or
(C), against the release of any property held as security for such
claim as provided in such paragraph (B) or (C), as the case may be,
to the extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such three months' period for property held as security
at the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property held
in such special account and the proceeds thereof shall be apportioned between
the Trustee, the Debentureholders and the holders of other indenture securities
in such manner that the Trustee, the Debentureholders and the holders of other
indenture securities realize, as a result of payments from such special account
and payments of dividends on claims filed against the Company in bankruptcy or
receivership or in a case for reorganization pursuant to the Federal Bankruptcy
Code or applicable State law, the same percentage of their respective claims,
figured before crediting to the claim of the Trustee anything on account of the
receipt by it from the Company of the funds and property in such special account
and before crediting to the respective claims of the Trustee, the
Debentureholders and the holders of other indenture securities dividends on
claims filed against the Company in bankruptcy or receivership or in a case for
reorganization pursuant to the Federal Bankruptcy Code or applicable State law,
but after crediting thereon receipts on account of the indebtedness represented
by their respective claims from all sources other than from such dividends and
from the funds and property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividends" shall include any
distribution with respect to such claim, in bankruptcy or receivership or in a
case for reorganization pursuant to the Federal Bankruptcy Code or applicable
State law, whether such distribution is made in cash, securities, or other
property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such bankruptcy,
receivership or a case for reorganization is pending shall have
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jurisdiction (i) to apportion between the Trustee, the Debentureholders and the
holders of other indenture securities, in accordance with the provisions of this
paragraph, the funds and property held in such special account and the proceeds
thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to
the provisions of this paragraph due consideration in determining the fairness
of the distributions to be made to the Trustee, the Debentureholders and the
holders of other indenture securities with respect to their respective claims,
in which event it shall not be necessary to liquidate or to appraise the value
of any securities or other property held in such special account or as security
for any such claim, or to make a specific allocation of such distributions as
between the secured and unsecured portions of such claims, or otherwise to apply
the provisions of this paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the beginning of such
three months' period shall be subject to the provisions of this subsection (a)
as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such three months' period, it
shall be subject to the provisions of this subsection (a) if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim which would have
given rise to the obligation to account, if such Trustee had
continued as trustee, occurred after the beginning of such three
months' period; and
(ii) such receipt of property or reduction of claim occurred within
three months after such resignation or removal.
(b) There shall be excluded from the operation of subsection (a) of this
Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one
year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of
preserving any property other than cash which shall at any time be
subject to the lien, if any, of this Indenture or of discharging tax
liens or other prior liens or encumbrances thereon, if notice of
such advance and of the circumstances surrounding the making thereof
is given to the Debentureholders at the time and in the manner
provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying
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agent, subscription agent, fiscal agent or depositary, or other
similar capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c)
of this Section;
(5) the ownership of stock or of other securities of a Company
organized under the provisions of Section 25(a) of the Federal
Reserve Act, as amended, which is directly or indirectly a creditor
of the Company; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptance or obligations which fall
within the classification of self-liquidating paper as defined in
subsection (c) of this Section.
(c) As used in this Section:
(1) The term "default" shall mean any failure to make payment in
full of the principal of (or premium, if any) or interest upon any
of the Debenture or upon the other indenture securities when and as
such principal (or premium, if any) or interest becomes due and
payable.
(2) The term "other indenture securities" shall mean securities upon
which the Company is an obligor (as defined in the Trust Indenture
Act) outstanding under any other indenture (A) under which the
Trustee is also trustee, (B) which contains provisions substantially
similar to the provisions of subsection (a) of this Section, and (C)
under which a default exists at the time of the apportionment of the
funds and property held in said special account.
(3) The term "cash transaction" shall mean any transaction in which
full payment for goods or securities sold is made within seven days
after delivery of the goods or securities in currency or in checks
or other orders drawn upon banks or bankers and payable upon demand.
(4) The term "self-liquidating paper" shall mean any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated
or incurred by the Company for the purpose of financing the
purchase, processing, manufacture, shipment, storage or sale of
goods, wares or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon , the goods,
wares or merchandise or the receivables or proceeds arising from the
sale of the goods, wares or merchandise previously
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constituting the security, provided the security is received by the
Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance
or obligation.
(5) The term "Company" shall mean any obligor upon any of the
Debentures.
ARTICLE 8
CONCERNING THE DEBENTURES
SECTION 8.01. Evidence of Action by Debentureholders. Whenever in this
Indenture it is provided that the holders of a majority or specified percentage
in aggregate principal amount of the Debentures of a particular series may take
any action (including the making of any demand or request, the giving of any
notice, consent or waiver or the taking of any other action) the fact that at
the time of taking any such action the holders of such majority or specified
percentage of that series have joined therein may be evidenced by any instrument
or any number of instruments of similar tenor executed by such holders of
Debentures of that series in person or by agent or proxy appointed in writing.
If the Company shall solicit from the Debentureholders of any series any
request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, as evidenced by an Officers'
Certificate, fix in advance a record date for such series for the determination
of Debentureholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Debentureholders of record at the
close of business on the record date shall be deemed to be Debentureholders for
the purposes of determining whether Debentureholders of the requisite proportion
of outstanding Debentures of that series have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the outstanding Debentures of that series
shall be computed as of the record date; provided that no such authorization,
agreement or consent by such Debentureholders on the record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
SECTION 8.02. Proof of Execution of Instruments and of Holding of
Debentures. Subject to the provisions of Section 7.01, proof of the execution of
any instrument by a Debentureholder (such proof will not require notarization)
or his agent or proxy and proof
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of the holding by any person of any of the Debentures shall be sufficient if
made in the following manner;
(a) The fact and date of the execution by any such person of any
instrument may be proved in any reasonable manner acceptable to the
Trustee.
(b) The ownership of Debentures shall be proved by the Debenture
Register of such Debentures or by a certificate of the Debenture
Registrar thereof.
(c) The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
SECTION 8.03. Who May Be Deemed Owners of Debentures. Prior to the due
presentment for registration of transfer of any Debenture, the Company, the
Trustee, any paying agent and any Debenture Registrar may deem and treat the
person in whose name such Debenture shall be registered upon the books of the
Company as the absolute owner of such Debenture (whether or not such Debenture
shall be overdue and notwithstanding any notice of ownership or writing thereon
made by anyone other than the Debenture Registrar) for the purpose of receiving
payment of or on account of the principal of, premium, if any, and (subject to
Section 2.03) interest on such Debenture and for all other purposes; and neither
the Company nor the Trustee nor any paying agent nor any Debenture Registrar
shall be affected by any notice to the contrary.
SECTION 8.04. Debentures Owned by a Company or Controlled or Controlling
Companies Disregarded for Certain Purposes. In determining whether the holders
of the requisite aggregate principal amount of Debentures of a particular series
have concurred in any direction, consent or waiver under this Indenture,
Debentures of that series which are owned by the Company or any other obligor on
the Debentures of that series or by any Subsidiary of the Company or of such
other obligor on the Debentures of that series shall be disregarded and deemed
not to be outstanding for the purpose of any such determination, except that for
the purpose of determining whether the Trustee shall be protected in relying on
any such direction, consent or waiver, only Debentures of such series which the
Trustee actually knows are so owned shall be so disregarded. Debentures so owned
which have been pledged in good faith may be regarded as outstanding for the
purposes of this Section, if the pledgee shall establish to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Debentures and
that the pledgee is not a person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
such other obligor. In case of a dispute as to such right, any decision by the
Trustee taken upon the advice of counsel shall be full protection to the
Trustee.
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SECTION 8.05. Instruments Executed by Debentureholders Bind Future
Holders. At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.01, of the taking of any action by the holders of the
majority or percentage in aggregate principal amount of the Debentures of a
particular series specified in this Indenture in connection with such action,
any holder of a Debenture of that series which is shown by the evidence to be
included in the Debentures the holders of which have consented to such action
may, by filing written notice with the Trustee, and upon proof of holding as
provided in Section 8.02, revoke such action so far as concerns such Debenture.
Except as aforesaid any such action taken by the holder of any Debenture shall
be conclusive and binding upon such holder and upon all future holders and
owners of such Debenture, and of any Debenture issued in exchange therefor, on
registration of transfer thereof or in place thereof, irrespective of whether or
not any notation in regard thereto is made upon such Debenture. Any action taken
by the holders of the majority or percentage in aggregate principal amount of
the Debentures of a particular series specified in this Indenture in connection
with such action shall be conclusively binding upon the Company, the Trustee and
the holders of all the Debentures of that series.
ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 9.01. Purposes for Which Supplemental Indenture May Be Entered
Into Without Consent of Debentureholders. In addition to any supplemental
indenture otherwise authorized by this Indenture, the Company, when authorized
by a Board Resolution, and the Trustee may from time to time and at any time
enter into an indenture or indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act as then in effect), without the
consent of the Debentureholders, for one or more of the following purposes:
(a) to evidence the succession of another corporation to the
Company, and the assumption by any such successor of the covenants
of the Company contained herein or otherwise established with
respect to the Debentures; or
(b) to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions for the protection of the
holders of the Debentures of all or any series as the Board of
Directors and the Trustee shall consider to be for the protection of
the holders of Debentures of all or any series, and to make the
occurrence, or the occurrence and continuance, of a default in any
of such additional covenants, restrictions, conditions or provisions
a default or an Event of Default with respect to such series
permitting the enforcement of all or any of the several remedies
provided in
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this Indenture as herein set forth; provided, however, that in
respect of any such additional covenant, restriction, condition or
provision such supplemental indenture may provide for a particular
period of grace after default (which period may be shorter or longer
than that allowed in the case of other defaults) or may provide for
an immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default or may limit the right of
the holders of a majority in aggregate principal amount of the
Debentures of such series to waive such default; or
(c) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein
or in any supplemental indenture, or to make such other provisions
in regard to matters or questions arising under this Indenture as
shall not be inconsistent with the provisions of this Indenture and
shall not adversely affect the interests of the holders of the
Debentures of any series; or
(d) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective
only when there is no Debenture outstanding of any series created
prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, and to make any further appropriate
agreements and stipulations which may be therein contained, but the Trustee
shall not be obligated to enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Any supplemental indenture authorized by the provisions of this Section
may be executed by the Company and the Trustee without the consent of the
holders of any of the Debentures at the time outstanding, notwithstanding any of
the provisions of Section 9.02.
SECTION 9.02. Modification of Indenture with Consent of Debentureholders.
With the consent (evidenced as provided in Section 8.01) of the holders of not
less than a majority in aggregate principal amount of the Debentures of each
series affected by such supplemental indenture or indentures at the time
outstanding (and, in the case of any series of Debentures held as trust assets
of a AES Trust and with respect to which a Security Exchange has not theretofore
occurred, such consent of holders of the Preferred Securities and the Common
Securities of such AES Trust as may be required under the Declaration of Trust
of such AES Trust), the Company, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as
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then in effect) for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the holders
of the Debentures of such series under this Indenture; provided, however, that
no such supplemental indenture shall (i) extend the fixed maturity of any
Debentures of any series, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or reduce any premium
payable upon the redemption thereof, without the consent of the holder of each
Debenture so affected or (ii) reduce the aforesaid percentage of Debentures, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Debenture (and, in the case of any
series of Debentures held as trust assets of a AES Trust and with respect to
which a Security Exchange has not theretofore occurred, such consent of the
holders of the Preferred Securities and the Common Securities of such AES Trust
as may be required under the Declaration of Trust of such AES Trust) then
outstanding and affected thereby.
Upon the request of the Company, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Debentureholders (and, in
the case of any series of Debentures held as trust assets of a AES Trust and
with respect to which a Security Exchange has not theretofore occurred, such
consent of holders of the Preferred Securities and the Common Securities of such
AES Trust as may be required under the Declaration of Trust of such AES Trust)
required to consent thereto as aforesaid, the Trustee shall join with the
Company in the execution of such supplemental indenture unless such supplemental
indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion but
shall not be obligated to enter into such supplemental indenture.
It shall not be necessary for the consent of the Debentureholders of any
series affected thereby under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, setting forth in
general terms the substance of such supplemental indenture, to the
Debentureholders of all series affected thereby as their names and addresses
appear upon the Debenture Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
SECTION 9.03. Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture pursuant to the provisions of this Article or of Section
10.01, this Indenture shall, with respect to such series, be and be deemed to be
modified and amended
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in accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Debentures of the series affected thereby shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.04. Debentures May Bear Notation of Changes By Supplemental
Indentures. Debentures of any series, affected by a supplemental indenture,
authenticated and delivered after the execution of such supplemental indenture
pursuant to the provisions of this Article or of Section 10.01, may bear a
notation in form approved by the Company, provided such form meets the
requirements of any exchange upon which such series may be listed, as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Debentures of that series so modified as to conform, in the
opinion of the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Company,
authenticated by the Trustee and delivered in exchange for the Debentures of
that series then outstanding.
SECTION 9.05. Opinion of Counsel. The Trustee, subject to the provisions
of Section 7.01, may receive an Opinion of Counsel as conclusive evidence that
any supplemental indenture executed pursuant to this Article is authorized or
permitted by, and conforms to, the terms of this Article and that it is proper
for the Trustee under the provisions of this Article to join in the execution
thereof.
ARTICLE 10
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 10.01. Satisfaction and Discharge of Indenture. The Company shall
not consolidate with or merge into any other Person or transfer or lease its
properties and assets substantially as an entirety to any Person, and the
Company shall not permit any other Person to consolidate with or merge into the
Company, unless:
(a) either the Company shall be the continuing corporation, or
the corporation (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 substantially as an entity are
transferred or leased shall be a corporation organized and existing
under the laws of the United States of America or any State thereof
or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all the obligations of
the Company under the Debentures and this Indenture; and
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(b) immediately after giving effect to such transaction no
Event of Default, and no event which, after notice or lapse of time
or both, would become an Event of Default, shall have occurred and
be continuing.
SECTION 10.02. Successor Corporation Substituted. The successor
corporation formed by such consolidation or into which the Company is merged or
to which such transfer or lease is made shall succeed to and be substituted for,
and may exercise every right and power of, the Company under this Indenture with
the same effect as if such successor corporation had been named as the Company
herein, and thereafter (except in the case of a lease to another Person) the
predecessor corporation shall be relieved of all obligations and covenants under
the Indenture and the Debentures and, in the event of such conveyance or
transfer, any such predecessor corporation may be dissolved and liquidated.
SECTION 10.03. Opinion of Counsel. The Trustee, subject to the provisions
of Section 7.01, may receive an Opinion of Counsel as conclusive evidence that
any such consolidation, merger, sale, conveyance, transfer or other disposition,
and any such assumption, comply with the provisions of this Article.
ARTICLE 11
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 11.01. Satisfaction and Discharge of Indentures. (A) If at any
time (a) the Company shall have paid or caused to be paid the principal of and
interest on all the Debentures of any series Outstanding hereunder (other than
Debentures of such series which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.07) as and when the same
shall have become due and payable, or (b) the Company shall have delivered to
the Trustee for cancellation all Debentures of any series theretofore
authenticated (other than any Debentures of such series which shall have been
destroyed, lost or stolen and which shall have been replaced or paid as provided
in Section 2.07) or (c) (i) all the Debentures of series not theretofore
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption, and (ii) the Company shall have
irrevocably deposited or caused to be deposited with the Trustee as trust funds
the entire amount in cash (other than moneys repaid by the Trustee or any paying
agent to the Company in accordance with Section 11.04) or Government
Obligations, maturing as to principal and interest at such times and in such
amounts as will insure the availability of cash, or a combination thereof,
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 (A) the principal and interest on all
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Debentures of such series on each date that such principal or interest is due
and payable and (B) any mandatory sinking fund payments on the dates on which
such payments are due and payable in accordance with the terms of the Indenture
and the Debentures of such series; and if, in any such case, the Company shall
also pay or cause to be paid all other sums payable hereunder by the Company,
then this Indenture shall cease to be of further effect (except as to (i) rights
of registration of transfer and exchange of Debentures of such series and the
Company's right of optional redemption, if any, (ii) substitution of mutilated,
defaced, destroyed, lost or stolen Debentures, (iii) rights of holders of
Debentures to receive payments of principal thereof and interest thereon, upon
the original stated due dates therefor (but not upon acceleration), and
remaining rights of the Debentureholders to receive mandatory sinking fund
payments, if any, (iv) the rights, obligations, duties and immunities of the
Trustee hereunder, (v) the rights of the holders of Debentures of such series as
beneficiaries hereof with respect to the property so deposited with the Trustee
payable to all or any of them, and (vi) the obligations of the Company under
Section 4.02) and the Trustee, on demand of the Company accompanied by an
Officers' Certificate and an Opinion of Counsel and at the cost and expense of
the Company, shall execute proper instruments acknowledging such satisfaction of
and discharging this Indenture; provided, that the rights of Holders of the
Debentures to receive amounts in respect of principal of and interest on the
Debentures held by them shall not be delayed longer than required by
then-applicable mandatory rules or policies of any securities exchange upon
which the Debentures are listed. The Company agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred and to
compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the Debentures of
such series.
(B) The following provisions shall apply to the Debentures of each series
unless specifically otherwise provided in a Board Resolution or indenture
supplemental hereto provided pursuant to Section 2.01. In addition to discharge
of the Indenture pursuant to the next preceding paragraph, the Company shall be
deemed to have paid and discharged the entire indebtedness on all the Debentures
of a series on the date of the deposit referred to in subparagraph (a) below,
and the provisions of this Indenture with respect to the Debentures of such
series shall no longer be in effect (except as to (i) rights of registration of
transfer and exchange of Debentures of such series and the Company's right of
optional redemption, if any, (ii) substitution of mutilated, defaced, destroyed,
lost or stolen Debentures, (iii) rights of holders of Debentures to receive
payments of principal thereof and interest thereon, upon the original stated due
dates therefor (but not upon acceleration), and remaining rights of the holders
of Debentures to receive mandatory sinking fund payments, if any, (iv) the
rights, obligations, duties and immunities of the Trustee hereunder, (v) the
rights of the Holders of Debentures as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any of them and (vi)
the obligations of the Company under Section 4.02) and the Trustee, at the
expense of the
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Company, shall at the Company's request, execute proper instruments
acknowledging the same, if
(a) with reference to this provision the Company has irrevocably
deposited or caused to be irrevocably deposited with the Trustee as
trust funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the holders of the Debentures of
such series (i) cash in an amount, or (ii) Governmental Obligations
maturing as to principal and interest at such times and in such
amounts as will insure the availability of cash or (iii) a
combination thereof, 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 (A)
the principal and interest on all Debentures of such series on each
date that such principal or interest is due and payable or is
earlier redeemed (irrevocably provided for under arrangements
satisfactory to the Trustee), as the case may be, and (B) any
mandatory sinking fund payments on the dates on which such payments
are due and payable in accordance with the terms of the Indenture
and the Debentures of such series;
(b) such deposit will not result in a breach or violation of, or
constitute a default under, any agreement or instrument to which the
Company is a party or by which it is bound;
(c) the Company has delivered to the Trustee an Opinion of Counsel
based on the fact that (x) the Company has received from, or there
has been published by, the Internal Revenue Service a ruling or (y)
since the date hereof, there has been a change in the applicable
Federal income tax law, in either case to the effect that, and such
opinion shall confirm that, the holders of the Debentures of such
series will not recognize income, gain or loss for Federal income
tax purposes as a result of such deposit, defeasance and discharge
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, defeasance and discharge had not occurred;
(d) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to the defeasance
contemplated by this provision have been complied with; and
(e) no event or condition shall exist that, pursuant to the
provisions of Section 14.02 or 14.03, would prevent the Company from
making payments of the principal of or interest on the Debentures of
such series on the date of such deposit.
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SECTION 11.02. Application of Trustee of Funds Deposited For Payment of
Debentures. Subject to Section 11.04, all moneys deposited with the Trustee (or
other trustee) pursuant to Section 11.01 shall be held in trust and applied by
it to the payment, either directly or through any paying agent (including the
Company acting as its own paying agent), to the Holders of the particular
Debentures of such series for the payment or redemption of which such moneys
have been deposited with the Trustee, of all sums due and to become due thereon
for principal and interest; but such money need not be segregated from other
funds except to the extent required by law.
SECTION 11.03. Application by Trustee of Funds Deposited For Payment of
Debentures. In connection with the satisfaction and discharge of this Indenture
with respect to Debentures of any series, all moneys then held by any paying
agent under the provisions of this Indenture with respect to such series of
Debentures shall, upon demand of the Company, be repaid to it or paid to the
Trustee and thereupon such paying agent shall be released from all further
liability with respect to such moneys.
SECTION 11.04. Repayment of Moneys Held by Paying Agent. Any moneys
deposited with or paid to the Trustee or any paying agent for the payment of the
principal of or interest on any Security of any series and not applied but
remaining unclaimed for two years after the date upon which such principal or
interest shall have become due and payable, shall, upon the written request of
the Company and unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property law, be repaid to the Company by the
Trustee for such series or such paying agent, and the Holder of the Debentures
of such series shall, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property laws, thereafter look only
to the Company for any payment which such holder may be entitled to collect, and
all liability of the Trustee or any paying agent with respect to such moneys
shall thereupon cease; provided, however, that the Trustee or such paying agent,
before being required to make any such repayment with respect to moneys
deposited with it for any payment series, shall at the expense of the Company,
mail by first-class mail to holders of such Debentures at their addresses as
they shall appear on the Debenture Register, notice, that such moneys remain and
that, after a date specified therein, which shall not be less than thirty days
from the date of such mailing or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
SECTION 11.05. Repayment of Moneys Paid by Trustee. The Company shall pay
and indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the Governmental Obligations deposited pursuant to Section
11.01 or the principal or interest received in respect of such obligations.
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ARTICLE 12
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 12.01. Incorporators, Stockholders, Officers and Directors of
Company Exempt From Individual Liability. No recourse under or upon any
obligations, covenant or agreement of this Indenture, or of any Debenture, or
for any claim based thereon or otherwise in respect thereof, shall be had
against any incorporator, stockholder, officer or director, past, present or
future as such, of the Company or of any predecessor or successor corporation,
either directly or through the Company or any such predecessor or successor
corporation, whether by virtue of any constitution, statue or rule of law, or by
the enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, stockholders, officers or
directors as such, of the Company or of any predecessor or successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Debentures or implied therefrom;
and that any and all such personal liability of every name and nature, either at
common law or in equity or by constitution or statute, of, and any and all such
rights and claims against, every such incorporator, stockholder, officer or
director as such, because the creation of the indebtedness hereby authorized, or
under or by reason of the obligations, covenants or agreements contained in this
Indenture or in any of the Debentures or implied therefrom, are hereby expressly
waived and released as a condition of, and as a consideration for, the execution
of this Indenture and the issuance of such Debentures.
ARTICLE 13
MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors and Assigns of Company Bound by Indenture. All
the covenants, stipulations, promises and agreements in this Indenture contained
by or on behalf of the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 13.02. Acts of Board, Committee or Officer of Successor Company
Valid. Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
corresponding board, committee or officer of any corporation that shall at the
time be the lawful sole successor of the Company.
SECTION 13.03. Surrender of Powers of Company. The Company by instrument
in writing executed by authority of two-thirds of its Board of Directors and
delivered to
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the Trustee may surrender any of the powers reserved to the Company and
thereupon such power so surrendered shall terminate both as to the Company and
as to any successor corporation.
SECTION 13.04. Required Notices or Demands May be Served by Mail. Except
as otherwise expressly provided herein any notice or demand which by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the holders of Debentures to or on the Company may be given or
served by being deposited first class postage prepaid in a post-office letterbox
addressed (until another address is filed in writing by the Company with the
Trustee), as follows: The AES Corporation, 1001 North 19th Street, Arlington,
Virginia 22209, Attention: General Counsel and Secretary. Any notice, election,
request or demand by the Company or any Debentureholder to or upon the Trustee
shall be deemed to have been sufficiently given or made, for all purposes, if
given or made in writing at the Corporate Trust Office of the Trustee.
SECTION 13.05. Indenture and Debentures to Be Construed in Accordance with
Laws of the State of New York. This Indenture and each Debenture shall be deemed
to be a contract made under the laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of said State (without
regard to principles of conflicts of laws thereof).
SECTION 13.06. Officer's Certificate and Opinion of Counsel to be
Furnished Upon Application or Demands by Company; Statements To Be Included In
Each Certificate or Opinion With Respect to Compliance With Condition or
Covenant. (a) Upon any application or demand by the Company to the Trustee to
take any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent provided for in this Indenture relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent have been complied with, except that in
the case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or demand, no additional certificate or opinion
need be furnished.
(b) Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
in this Indenture (other than the certificate provided pursuant to Section
5.03(d) of this Indenture) shall include (1) a statement that the person making
such certificate or opinion has read such covenant or condition; (2) 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; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion
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as to whether or not such covenant or condition has been complied with; and (4)
a statement as to whether or not, in the opinion of such person, such condition
or covenant has been complied with.
SECTION 13.07. Payments Due on Sundays or Holidays. Except as provided
pursuant to Section 2.01 pursuant to a Board Resolution, and as set forth in an
Officers' Certificate, or established in one or more indentures supplemental to
the Indenture, in any case where the date of maturity of interest or principal
of any Debenture or the date of redemption of any Debenture shall not be a
business day then payment of interest or principal (and premium, if any) may be
made on the next succeeding business day with the same force and effect as if
made on the nominal date of maturity or redemption, and no interest shall accrue
for the period after such nominal date.
SECTION 13.08. Provisions Required by Trust Indenture Act of 1939 to
Control. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 13.09. Indenture May Be Executed by its Counterparts. This
Indenture may be executed in any number of counterparts, each of which shall be
an original; but such counterparts shall together constitute but one and the
same instrument.
SECTION 13.10. Separability of Indenture Provisions. .In case any one or
more of the provisions contained in this Indenture or in the Debentures of any
series shall for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Indenture or of such Debentures, but this Indenture
and such Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
SECTION 13.11. Assignment by Company to Subsidiary. The Company will have
the right at all times to assign any of its rights or obligations under this
Indenture to a direct or indirect wholly owned Subsidiary of the Company;
provided that, in the event of any such assignment, the Company will remain
jointly and severally liable for all such obligations. Subject to the foregoing,
this Indenture is binding upon and inures to the benefit of the parties thereto
and their respective successors and assigns. This Indenture may not otherwise be
assigned by the parties hereto.
SECTION 13.12. Holders of Preferred Securities as Third Party
Beneficiaries of the Indenture; Holders of Preferred Securities May Institute
Legal Proceedings Against the Company in Certain Cases. The Company hereby
acknowledges that, to the extent specifically set forth herein, prior to a
Security Exchange with respect to the Debentures of any series held as trust
assets of a AES Trust, the holders of the Preferred Securities of such AES Trust
shall expressly be third party beneficiaries of this Indenture. The
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Company further acknowledges that, prior to a Security Exchange with respect to
Debentures of any series held as trust assets of a AES Trust, if the Property
Trustee of such AES Trust fails to enforce its rights under this Indenture as
the holder of the Debentures of a series held as trust assets of such AES Trust,
any holder of the Preferred Securities of such AES Trust may institute legal
proceedings directly against the Company to enforce such Property Trustee's
rights under this Indenture without first instituting any legal proceedings
against such Property Trustee or any other person or entity; provided that, if
an Event of Default has occurred and is continuing and such event is attributed
to the failure of the Company to pay interest or principal on the Debentures on
the date such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a holder of Preferred Securities of
such AES Trust may directly institute a proceeding for enforcement of payment to
such holder of the principal of or interest on the Debentures having a principal
amount equal to the aggregate liquidation amount of the Preferred Securities of
such holder (a "Holder Direct Action") on or after the respective due date
specified in the Debentures. In connection with such Holder Direct Action, the
rights of the holders of the Common Securities of such AES Trust will be
subrogated to the rights of such holder of Preferred Securities to the extent of
any payment made by the Company to such holders of Preferred Securities in such
Holder Direct Action. Except as provided in the preceding sentences, the holders
of Preferred Securities of such AES Trust will not be able to exercise directly
any other remedy available to the holders of the Debentures. Reference to a
"holder" of Preferred Securities or Common Securities herein shall mean a
"Holder" of such security as defined in the Declaration of Trust.
ARTICLE 14
SUBORDINATION OF DEBENTURES
SECTION 14.01. Agreement to Subordinate. The Company covenants and agrees,
and each Debentureholder issued hereunder by his acceptance thereof likewise
covenants and agrees, that all Debentures shall be issued subject to the
provisions of this Article; and each person holding any Debenture, whether upon
original issue or upon transfer, assignment or exchange thereof accepts and
agrees that the Principal of and interest on all Debentures issued hereunder
shall, to the extent and in the manner herein set forth, be (i) subordinated and
subject in right to the prior payment in full of all Senior and Subordinated
Debt and (ii) structually subordinated to the liabilities of the Company's
subsidiaries.
SECTION 14.02. Payments to Debentureholders. No payments on account of
principal of, Change of Control purchase price, or interest on the Debentures
shall be made if at the time of such payment or immediately after giving effect
thereto there shall exist a default in any payment with respect to any Senior
and Subordinated Debt, and such event of default shall not have been cured or
waived or shall not have ceased to exist. In addition, during the continuance of
any other event of default (other than a payment
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default) with respect to Designated Senior and Subordinated Debt pursuant to
which the maturity thereof may be accelerated, from and after the date of
receipt by the Trustee of written notice from the holders of such Designated
Senior and Subordinated Debt or from an agent of such holders, no payments on
account of Principal, Change of Control purchase price, or interest in respect
of the Debentures may be made by the Company for a period ("Payment Blockage
Period") commencing on the date of delivery of such notice and ending 179 days
thereafter (unless such Payment Blockage Period shall be terminated by written
notice to the Trustee from the holders of such Designated Senior and
Subordinated Debt or from an agent of such holders, or such event of default has
been cured or waived or has ceased to exist). Only one Payment Blockage Period
may be commenced with respect to the Debentures during any period of 360
consecutive days. No event of default which existed or was continuing on the
date of the commencement of any Payment Blockage Period with respect to the
Designated Senior and Subordinated Debt initiating such Payment Blockage Period
shall be or be made the basis for the commencement of any subsequent Payment
Blockage Period by the holders of such Designated Senior and Subordinated Debt,
unless such event of default shall have been cured or waived for a period of not
less than 90 consecutive days.
Upon any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors upon any
liquidation, dissolution, winding up, receivership, reorganization, assignment
for the benefit of creditors, marshalling of assets and liabilities or any
bankruptcy, insolvency or similar proceedings of the Company, all amounts due or
to become due upon all Senior and Subordinated Debt shall first be paid in full,
in cash or cash equivalents, or payment thereof provided for in accordance with
its terms, before any payment is made on account of the Principal of, Change of
Control purchase price, or interest on the indebtedness evidenced by the
Debentures, and upon any such liquidation, dissolution, winding up,
receivership, reorganization, assignment, marshalling or proceeding, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to which the Debentureholders or the Trustee under
this Indenture would be entitled, except for the provisions hereof, shall be
paid by the Company or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making such payment or distribution, or by the
Debentureholders or by the Trustee under this Indenture if received by them or
it, directly to the holders of Senior and Subordinated Debt (pro rata to such
holders on the basis of the respective amounts of Senior and Subordinated Debt
held by such holders) or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any of
such Senior and Subordinated Debt may have been issued, as their respective
interests may appear, to the extent necessary to pay all Senior and Subordinated
Debt in full (including, without limitation, except to the extent, if any,
prohibited by mandatory provisions of law, post-petition interest, in any such
proceedings), after giving effect to any concurrent payment or distribution to
or for the holders of Senior and Subordinated Debt, before any
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payment or distribution is made to the holders of the indebtedness evidenced by
the Debentures or to the Trustee under this Indenture.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee under this Indenture or the holders of the Securities before all Senior
and Subordinated Debt is paid in full or provision is made for such payment in
accordance with its terms, such payment or distribution shall be held in trust
for the benefit of and shall be paid over or delivered to the holders of such
Senior and Subordinated Debt or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any of such Senior and Subordinated Debt may have been issued, as
their respective interests may appear, for application to the payment of all
Senior and Subordinated Debt remaining unpaid until all such Senior and
Subordinated Debt shall have been paid in full in accordance with its terms,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior and Subordinated Debt.
For purposes of this Article, the words, "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of arrangement, reorganization or readjustment, the payment of which
is subordinated (at least to the extent provided in this Article with respect to
the Securities) to the payment of all Senior and Subordinated Debt which may at
the time be outstanding; provided, that (i) the Senior and Subordinated Debt is
assumed by the new corporation, if any, resulting from any such arrangement,
reorganization or readjustment, and (ii) the rights of the holders of the Senior
and Subordinated Debt are not, without the consent of such holders, altered by
such arrangement, reorganization or readjustment. The consolidation of the
Company with, or the merger of the Company into, another corporation or the
liquidation or dissolution of the Company following the conveyance or transfer
of its property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided in Article 10 shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the purposes
of this Section if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions stated
in Article 10. Nothing in this Section shall apply to claims of, or payments to,
the Trustee under or pursuant to Article 7, except as provided therein. This
Section shall be subject to the further provisions of Section 14.05.
SECTION 14.03. Subrogation of Debentures. Subject to the payment in full
of all Senior and Subordinated Debt, the holders of the Debentures shall be
subrogated to the rights of the holders of Senior and Subordinated Debt to
receive payments or distributions of cash, property or securities of the Company
applicable to the Senior and Subordinated Debt until the principal of and
interest on the Debentures shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of the Senior
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and Subordinated Debt of any cash, property or securities to which the holders
of the Debentures or the Trustee on their behalf would be entitled except for
the provisions of this Article, and no payment over pursuant to the provisions
of this Article to the holders of Senior and Subordinated Debt by holders of the
Debentures or the Trustee on their behalf shall, as between the Company, its
creditors other than holders of Senior and Subordinated Debt and the holders of
the Debentures, be deemed to be a payment by the Company to or on account of the
Senior and Subordinated Debt; and no payments or distributions of cash, property
or securities to or for the benefit of the Debentureholders pursuant to the
subrogation provision of this Article, which would otherwise have been paid to
the holders of Senior and Subordinated Debt shall be deemed to be a payment by
the Company to or for the account of the Debentures. It is understood that the
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the holders of the Debentures, on the one hand,
and the holders of the Senior and Subordinated Debt, on the other hand.
Nothing contained in this Article or elsewhere in this Indenture or in
the Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior and Subordinated Debt, and the
holders of the Debentures, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Debentures the principal of and
interest on the Debentures as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the holders of the Debentures and creditors of the Company other than
the holders of the Senior and Subordinated Debt, nor shall anything herein or
therein prevent the holder of any Debenture or the Trustee on his behalf from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article of the holders
of Senior and Subordinated Debt in respect of cash, property or securities of
the Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Article 7, and the
holders of the Debentures shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such liquidation,
dissolution, winding up, receivership, reorganization, assignment or marshalling
proceedings are pending, or a certificate of the receiver, trustee in
bankruptcy, liquidating trustee, agent or other person making such payment or
distribution, delivered to the Trustee or to the holders of the Debentures, for
the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior and Subordinated Debt and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article.
SECTION 14.04. Authorization by Debentureholders. Each holder of a
Debenture by his acceptance thereof authorizes the Trustee in his behalf to take
such action as may be
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necessary or appropriate to effectuate the subordination provided in this
Article and appoints the Trustee his attorney-in-fact for any and all such
purposes.
SECTION 14.05. Notice to Trustee. The Company shall give prompt written
notice to the Trustee and to any paying agent of any fact known to the Company
which would prohibit the making of any payment of moneys to or by the Trustee or
any paying agent in respect of the Debentures pursuant to the provisions of this
Article. Regardless of anything to the contrary contained in this Article or
elsewhere in this Indenture, the Trustee shall not be charged with knowledge of
the existence of any Senior and Subordinated Debt or of any default or event of
default with respect to any Senior and Subordinated Debt or of any other facts
which would prohibit the making of any payment of moneys to or by the Trustee,
unless and until the Trustee shall have received notice in writing at its
principal Corporate Trust Office to that effect signed by an officer of the
Company, or by a holder or agent of a holder of Senior and Subordinated Debt who
shall have been certified by the Company or otherwise established to the
reasonable satisfaction of the Trustee to be such holder or agent, or by the
trustee under any indenture pursuant to which Senior and Subordinated Debt shall
be outstanding, and, prior to the receipt of any such written notice, the
Trustee shall, subject to the provisions of Article 7, be entitled to assume
that no such facts exist; provided that if on a date at least three Business
days prior to the date upon which by the terms hereof any such moneys shall
become payable for any purpose (including, without limitation, the payment of
the principal of, or interest on any Debenture) the Trustee shall not have
received with respect to such moneys the notice provided for in this Section,
then, regardless of anything herein to the contrary, the Trustee shall have full
power and authority to receive such moneys and to apply the same to the purpose
for which they were received, and shall not be affected by any notice to the
contrary which may be received by it on or after such prior date.
Regardless of anything to the contrary herein, nothing shall prevent (a)
any payment by the Company or the Trustee to the Debentureholders of amounts in
connection with a redemption of Debentures if (i) notice of such redemption has
been given pursuant to Article 3 prior to the receipt by the Trustee of written
notice as aforesaid, and (ii) such notice of redemption is given not earlier
than 60 days before the redemption date, or (b) any payment by the Trustee to
the Debentureholders of amounts deposited with it pursuant to Article 11.
The Trustee shall be entitled to rely on the delivery to it of a written
notice by a person representing himself to be a holder of Senior and
Subordinated Debt (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of Senior and Subordinated Debt or a trustee
on behalf of any such holder. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any person
as a holder of Senior and Subordinated Debt to participate in any payment or
distribution pursuant to this Article, the Trustee may request such person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior and
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Subordinated Debt held by such person, the extent to which such person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such person under this Article, and if such evidence
is not furnished the Trustee may defer any payment to such person pending
judicial determination as to the right of such person to receive such payment.
SECTION 14.06. Trustee's Relation to Senior and Subordinated Debt. The
Trustee and any agent of the Company or the Trustee shall be entitled to all the
rights set forth in this Article with respect to any Senior and Subordinated
Debt which may at any time be held by it in its individual or any other capacity
to the same extent as any other holder of Senior and Subordinated Debt and
nothing in this Indenture shall deprive the Trustee or any such agent, of any of
its rights as such holder. Nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Article 7.
With respect to the holders of Senior and Subordinated Debt, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of Senior and Subordinated Debt shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Senior and Subordinated Debt and,
subject to the provisions of Article 7, the Trustee shall not be liable to any
holder of Senior and Subordinated Debt if it shall pay over or deliver to
holders of Debentures, the Company or any other person moneys or assets to which
any holder of Senior and Subordinated Debt shall be entitled by virtue of this
Article or otherwise.
SECTION 14.07. No Impairment to Subordination. No right of any present or
future holder of any Senior and Subordinated Debt to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof which any such holder may have or otherwise be charged with.
The First National Bank of Chicago, as Trustee, hereby accepts the trust
in this Indenture declared and provided, upon the terms and conditions herein
above set forth.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
THE AES CORPORATION
By ______________________________
Name:
Title:
Attest:
By ________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO, AS TRUSTEE
By ___________________________
Name:
Title:
Attest:
By ______________________
Name:
Title:
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<PAGE> 81
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On March __, 1997 before me, ____________________, Notary Public,
personally appeared ______________________ and
/ / personally known to me -OR -
/ / proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
_____________________________
Signature of Notary
CAPACITY CLAIMED BY SIGNER
/ / INDIVIDUAL(S) _______ ______________
/ / CORPORATE OFFICER(S)
/ / PARTNER(S)
/ / ATTORNEY-IN-FACT
/ / TRUSTEE(S)
/ / GUARDIAN/CONSERVATOR
/ / OTHER:
SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)
THE AES CORPORATION
<PAGE> 82
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On March __, 1997 before me, __________________, Notary Public, personally
appeared ___________________ and
/ / personally known to me - OR -
/ / proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
_____________________________
Signature of Notary
CAPACITY CLAIMED BY SIGNER
/ / INDIVIDUAL(S) _________________________
/ / CORPORATE OFFICER(S)
/ / TRUST OFFICER
/ / ATTORNEY-IN-FACT
/ / TRUSTEE(S)
/ / GUARDIAN/CONSERVATOR
/ / OTHER:
SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)
THE FIRST NATIONAL BANK OF CHICAGO
<PAGE> 1
EXHIBIT 4.3
-----------
=============================
THE AES CORPORATION
AND
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
------------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of March __, 1997
TO
JUNIOR SUBORDINATED INDENTURE
Dated as of March__, 1997
-------------------
_____% Junior Subordinated Convertible Securities
Due 2027
=============================
<PAGE> 2
The First Supplemental INDENTURE, dated as of the _____ day of March __,
1997 (the "First Supplemental Indenture"), between THE AES CORPORATION, a
corporation duly organized and existing under the laws of the State of Delaware
(hereinafter sometimes referred to as the "Company") and The First National Bank
of Chicago, a national banking association, as trustee (hereinafter sometimes
referred to as the "Trustee") under the Junior Subordinated Indenture dated as
of March __, 1997 between the Company and the Trustee (the "Indenture") (except
as otherwise set forth herein, all terms used and not defined herein are used as
defined in the Indenture or in the Declaration of Trust);
WHEREAS, the Company executed and delivered the Indenture to the Trustee
to provide for the future issuance of its junior subordinated securities (the
"Debentures"), said Debentures to be issued from time to time in series as might
be determined by the Company under the Indenture, in an unlimited aggregate
principal amount which may be authenticated and delivered thereunder as in the
Indenture provided; and
WHEREAS, pursuant to the terms of the Indenture, the Company desires to
provide for the establishment of a new series of its Debentures to be known as
its ____% Junior Subordinated Convertible Debentures due 2027 (said series being
hereinafter referred to as the "Series ____% Debentures"), the form and
substance of such Series ____% Debentures and the terms, provisions and
conditions thereof to be set forth as provided in the Indenture and this First
Supplemental Indenture; and
WHEREAS, the Company has caused to be formed AES Trust I ("AES Trust I")
as a statutory business trust under the Business Trust Act of the State of
Delaware (12 Del. Code ss. 3801 et seq.) pursuant to a declaration of trust
dated November 1, 1996 (the "Original Declaration") and the filing of an amended
and restated certificate of trust with the Secretary of State of the State of
Delaware on December 5, 1996; and
WHEREAS, the Original Declaration is to be amended and restated in its
entirety pursuant to an Amended and Restated Declaration of Trust dated as of
March __, 1997 (such Amended and Restated Declaration of Trust, as amended from
time to time, the "Declaration of Trust"); and
WHEREAS, AES Trust I desires to issue its $______ Term Convertible
Securities, Series A (the "Preferred Securities" or "TECONS") and sell such
Preferred Securities to initial purchasers; and
WHEREAS, in connection with such purchases of Preferred Securities and the
related purchase by the Company of the Common Securities (as defined in the
Declaration of Trust) of AES Trust I, AES Trust I will purchase as trust assets
Series ____% Debentures; and
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<PAGE> 3
WHEREAS, pursuant to the Declaration of Trust, the legal title to the
Series ____% Debentures shall be owned and held of record in the name of The
First National Bank of Chicago or its successor under the Declaration of Trust,
as Property Trustee (the "Property Trustee"), in trust for the benefit of
holders of the Preferred Securities and the Common Securities; and
WHEREAS, upon the occurrence of a Special Event (as defined in the
Declaration of Trust) the Regular Trustees (as defined in the Declaration of
Trust) of AES Trust I shall, unless the Series ____% Debentures are redeemed as
described herein, dissolve AES Trust I and cause to be distributed to the
holders of Preferred Securities and Common Securities, on a Pro Rata basis
(determined as provided in the terms of the Preferred Securities and Common
Securities attached as Exhibits B and C to the Declaration of Trust), Series
____% Debentures and, in connection with a Liquidation Distribution (as defined
in the Declaration of Trust), the Regular Trustees may cause to be distributed
to holders of Preferred Securities and Common Securities, on such a Pro Rata
basis, Series ____% Debentures (each a "Dissolution Event"); and
WHEREAS, the Company desires and has requested the Trustee to join with it
in the execution and delivery of this First Supplemental Indenture, and all
requirements necessary to make this First Supplemental Indenture a valid
instrument, in accordance with its terms, and to make the Series ____%
Debentures when executed by the Company and authenticated and delivered by the
Trustee, the valid obligations of the Company, have been performed and
fulfilled, and the execution and delivery hereof have been in all respects duly
authorized;
NOW THEREFORE, in consideration of the purchase and acceptance of the
Series ____% Debentures by the holders thereof, and for the purpose of setting
forth, as provided in the Indenture, the form and substance of the Series ____%
Debentures and the terms, provisions and conditions thereof, the Company
covenants and agrees with the Trustee as follows:
ARTICLE ONE
General Terms and Conditions of
the Series ____% Debentures
SECTION 1.01. There shall be and is hereby authorized a series of
Debentures designated the "____% Junior Subordinated Convertible Debentures Due
2027", limited in aggregate principal amount to $200,000,000 (except as provided
in this Section 1.01 and 7.01). Upon exercise of the overallotment option set
forth in the Underwriting Agreement (as defined in the Declaration of Trust),
additional Series ____% Debentures in the aggregate principal amount of up to
$30,000,000 may be executed by the Company and delivered to
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<PAGE> 4
the Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said Series ____% Debentures to or upon the written order of the
Company, which order shall be accompanied by evidence satisfactory to the
Trustee that the overallotment option has been exercised. The Series ____%
Debentures shall mature and the principal shall be due and payable together with
all accrued and unpaid interest thereon, including Compounded Interest (as
hereinafter defined) on _________ , 2027 (the "Maturity Date").
SECTION 1.02. (a) Except as provided in Section 1.02(b), the Series ____%
Debentures shall be issued in fully registered certificated form without
interest coupons. Principal and interest on the Series ____% Debentures issued
in certificated form will be payable, the transfer of such Series ____%
Debentures will be registrable and such Series ____% Debentures will be
exchangeable for Series ____% Debentures bearing identical terms and provisions
at the office or agency of the Company in the Borough of Manhattan, The City and
State of New York; provided, however, that payment of interest may be made at
the option of the Company by check mailed to the registered holder at such
address as shall appear in the Debenture register and that the payment of
principal with respect to the Series ____% Debentures will only be made upon
surrender of the Series ____% Debentures to the Trustee. Notwithstanding the
foregoing, so long as the Property Trustee is the legal owner and record holder
of the Series ____% Debentures, the payment of the principal of and interest
(including Compounded Interest, if any) on the Series ____% Debentures held by
the Property Trustee will be made by the Company in immediately available funds
on the payment date therefor at such place and to the Property Account (as
defined in the Declaration of Trust) established and maintained by the Property
Trustee pursuant to the Declaration of Trust.
(b) In connection with a Dissolution Event;
(i) Series ____% Debentures in certificated form may be presented to the
Trustee by the Property Trustee in exchange for a Global Debenture
representing the Series ____% Debentures in an aggregate principal
amount equal to all Outstanding Series ____% Debentures, to be
registered in the name of the Depositary, or its nominee, and
delivered by the Trustee to the Depositary for crediting to the
accounts of its participants pursuant to the instructions of the
Regular Trustees (as defined in the Declaration of Trust). The
Company upon any such presentation shall execute a Global Debenture
representing the Series ____% Debentures in such aggregate principal
amount and deliver the same to the Trustee for authentication and
delivery in accordance with the Indenture and this First
Supplemental Indenture. Payments on the Series ____% Debentures
issued as a Global Debenture will be made to the Depositary; and
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(ii) if any Preferred Securities are held in non book-entry certificated
form, Series ____% Debentures in certificated form may be presented
to the Trustee by the Property Trustee and any Preferred Security
Certificate (as defined in the Declaration of Trust) which
represents Preferred Securities other than Preferred Securities held
by the Clearing Agency (as defined in the Declaration of Trust) or
its nominee ("Non Book-Entry Preferred Securities") will be deemed
to represent beneficial interests in Series ____% Debentures
presented to the Trustee by the Property Trustee having an aggregate
principal amount equal to the aggregate liquidation amount of the
Non Book-Entry Preferred Securities until such Preferred Security
Certificate are presented to the Debenture Registrar for transfer or
reissuance at which time such Preferred Security Certificate will be
canceled and a Series ____% Debenture, registered in the name of the
holder of the Preferred Security Certificate or the transferee of
the holder of such Preferred Security Certificate, as the case may
be, with an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Security Certificate canceled
will be executed by the Company and delivered to the Trustee for
authentication and delivery in accordance with the Indenture and
this First Supplemental Indenture. On issue of such Series ____%
Debentures, Series ____% Debentures with an equivalent aggregate
amount that were presented by the Property Trustee to the Trustee
will be deemed to have been canceled.
SECTION 1.03. Each Series ____% Debenture will bear interest at the rate
of ____% per annum from _______________, 1997 until the principal thereof
becomes due and payable, and on any overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the same rate per annum, compounded quarterly,
payable (subject to the provisions of Article Three) quarterly in arrears on the
last day of each calendar quarter (each an "Interest Payment Date", commencing
on __________ __, 1997), to the person in whose name such Series ____% Debenture
or any predecessor Series ____% Debenture is registered, at the close of
business on the regular record date for such interest installment, which, except
as set forth below, shall be, in respect of any Series ____% Debentures of which
the Property Trustee is the registered holder of or a Global Debenture, the
close of business on the business day next preceding that Interest Payment Date.
Notwithstanding the foregoing sentence, if the Preferred Securities are no
longer in book-entry only form or if pursuant to the provisions of Section
2.11(c) of the Indenture the Series ____% Debentures are not represented by a
Global Debenture, the regular record dates for such interest installment shall
be the close of business on the fifteenth day of the month in which that
Interest Payment Date occurs. Any such interest installment not punctually paid
or duly provided for shall forthwith cease to be payable to the registered
holders on such regular record date, and may be paid to the person in whose name
the Series ____% Debenture (or one or more Predecessor Debentures) is registered
at the close of business on a special record date to
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<PAGE> 6
be fixed by the Trustee for the payment of such defaulted interest, notice
whereof shall be given to the registered holders of the Series ____% Debentures
not less than 10 days prior to such special record date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Series ____% Debentures may be listed, and upon
such notice as may be required by such exchange, all as more fully provided in
the Indenture.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. In the event that any date on
which interest is payable on the Series ____% Debentures is not a business day,
then payment of interest payable on such date will be made on the next
succeeding day which is a business day (and without any interest or other
payment in respect of any such delay), except that, if such business day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding business day, in each case with the same force and effect as if made
on such date.
ARTICLE TWO
Optional Redemption
of the Series ____% Debentures
SECTION 2.01. Except as provided in Section 2.02 and subject to the
provisions below, Series ____% Debentures may not be redeemed by the Company
prior to , 2000. Subject to the terms of Article Three of the Indenture, the
Company shall have the right to redeem the Series ____% Debentures, in whole or
in part, from time to time, on or after ___________, 2000, upon not less than 30
nor more than 60 days notice to the Holder of the Series __% Debentures, at the
following prices (expressed as percentages of the principal amount of the Series
__% Debentures) (the "Optional Redemption Price"), together with any accrued and
unpaid interest thereon, including Compounded Interest (as defined herein), if
any, to, but excluding, the date of such redemption, if redeemed during the
12-month period beginning _____:
Year Redemption Price
---- ----------------
2000 ___%
2001 ___%
2002 ___%
2003 ___%
2004 ___%
and 100% if redeemed on or after _____, 2005.
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If the Series __% Debentures are redeemed on any Interest Payment Date,
accrued and unpaid interest shall be payable to Holders of record on the
relevant record date.
The Company may not redeem any Series __% Debentures unless all accrued
and unpaid interest thereon, including Compounded Interest, if any, has been
paid for all quarterly periods terminating on or prior to the date of notice of
redemption. So long as the corresponding Trust Securities are outstanding, the
proceeds from the redemption of the Series __% Debentures will be used to redeem
the Trust Securities.
SECTION 2.02. If, at any time, a Tax Event (as defined below) shall occur
or be continuing and (i) the Regular Trustees and the Company shall have
received an opinion (a "Redemption Tax Opinion") of a nationally recognized
independent tax counsel experienced in such matters that, as a result of a Tax
Event, there is more than an insubstantial risk that the Company would be
precluded from deducting the interest on the Series ____% Debentures for United
States federal income tax purposes even if the Series ____% Debentures were
distributed to the holders of Preferred Securities and Common Securities in
liquidation of such holder's interest in AES Trust I as set forth in the
Declaration of Trust or (ii) the Regular Trustees shall have been informed by
such tax counsel that a No Recognition Opinion (as defined below) cannot be
delivered to AES Trust I, the Company shall have the right at any time, upon not
less than 30 nor more than 60 days' notice, to redeem the Series ____%
Debentures in whole or in part for cash at a price equal to 100% of the
principal amount thereof, together with any accrued and unpaid interest thereon,
including Compound Interest, if any, to, but excluding the date of redemption,
within 90 days following the occurrence of such Tax Event; provided, however,
that, if at the time there is available to the Company or the Regular Trustees
on behalf of AES Trust I the opportunity to eliminate, within such 90 day
period, the Tax Event by taking some ministerial action ("Ministerial Action"),
such as filing a form or making an election, or pursuing some other similar
reasonable measure, which has no adverse effect on AES Trust I, the Company or
the holders of the Preferred Securities, the Company or the Regular Trustees on
behalf of AES Trust I will pursue such measure in lieu of redemption and
provided further that the Company shall have no right to redeem the Series ____%
Debentures while the Regular Trustees on behalf of AES Trust I are pursuing any
such Ministerial Action.
"Tax Event" means that the Company and the Regular Trustees shall have
obtained an opinion of nationally recognized independent tax counsel experienced
in such matters (a "Dissolution Tax Opinion") to the effect that on or after
March __, 1997 as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, (b) any amendment to, or change in, an interpretation or application of
any such laws or regulations by any legislative body, court, governmental agency
or regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination), (c) any
interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the theretofore generally accepted
position or (d) any action taken by any
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<PAGE> 8
governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after March__, 1997 there is more than an insubstantial risk that (i) AES
Trust I is, or will be within 90 days of the date thereof, subject to United
States federal income tax with respect to income accrued or received on the
Series ____% Debentures, (ii) AES Trust I is, or will be within 90 days of the
date thereof, subject to more than a de minimis amount of taxes, duties or other
governmental charges or (iii) interest payable by the Company to AES Trust I on
the Series ____% Debentures is not, or within 90 days of the date thereof will
not be, deductible by the Company for United States federal income tax purposes.
"No Recognition Opinion" means an opinion of a nationally recognized
independent tax counsel experienced in such matters, which opinion may rely on
any then applicable published revenue ruling of the Internal Revenue Service, to
the effect that the holders of the Preferred Securities will not recognize any
gain or loss for United States federal income tax purposes as a result of a
dissolution of AES Trust and distribution of the Series ____% Debentures as
provided in the Declaration of Trust.
SECTION 2.03. If the Series ____% Debentures are only partially redeemed
pursuant to this Article Two, the Series ____% Debentures will be redeemed pro
rata or by lot or by any other method utilized by the Trustee, provided that if
at the time of redemption, the Series ____% Debentures are registered as a
Global Debenture, the Depository shall determine by lot the principal amount of
such Series ____% Debentures held by each Debenture Holder to be redeemed in
accordance with its customary procedures. Notwithstanding the foregoing, if a
partial redemption of the Series ____% Debentures would result in the delisting
of the Preferred Securities by any national securities exchange or other
organization on which the Preferred Securities are then listed, the Company
shall not be permitted to effect such partial redemption and will only redeem
the Series ____% Debentures in whole.
ARTICLE THREE
Extension of Interest Payment Period
SECTION 3.01. So long as the Company is not in default in the payment of
interest on the Series ____% Debentures, the Company shall have the right, at
any time during the term of the Series ____% Debentures, from time to time to
extend the interest payment period of such Series ____% Debentures for up to 20
consecutive quarterly interest periods (the "Extended Interest Payment Period"),
at the end of which period the Company shall pay all interest accrued and unpaid
thereon (together with interest thereon at the rate of ____% per annum to the
extent permitted by applicable law, compounded
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quarterly ("Compounded Interest")); provided that no Extended Interest Payment
Period may extend beyond the Maturity Date or redemption date of the Series __%
Debentures. During such Extended Interest Payment Period the Company shall not
declare or pay any dividend on, or redeem, purchase, acquire or make a
distribution or liquidation payment with respect to, any of its common stock or
preferred stock or make any guarantee payments with respect thereto; provided
that the foregoing will not apply to any stock dividends paid by the Company in
Common Stock. Prior to the termination of any such Extended Interest Payment
Period, the Company may pay all or any portion of the interest accrued on the
Series ____% Debentures on any Interest Payment Date to holders of record on the
regular record date for such Interest Payment Date or from time to time further
extend such Period; provided that such Period together with all such further
extensions thereof shall not exceed 20 consecutive quarterly interest periods.
Upon the termination of any Extended Interest Payment Period and upon the
payment of all accrued and unpaid interest then due, together with Compounded
Interest, the Company may select a new Extended Interest Payment Period, subject
to the foregoing requirements. No interest shall be due and payable during an
Extended Interest Payment Period, except at the end thereof. At the end of the
Extended Interest Payment Period the Company shall pay all interest accrued and
unpaid on the Series ____% Debentures including any Compounded Interest which
shall be payable to the holders of the Series ____% Debentures in whose names
the Series ____% Debentures are registered in the Debenture register on the
first record date after the end of the Extended Interest Payment Period.
SECTION 3.02. (a) So long as the Property Trustee is the legal owner and
holder of record of the Series ____% Debentures, at the time the Company selects
an Extended Interest Payment Period, the Company shall give both the Property
Trustee and the Trustee written notice of its selection of such Extended
Interest Payment Period one business day prior to the earlier of (i) the next
succeeding date on which distributions on the Preferred Securities are payable
or (ii) the date AES Trust I is required to give notice of the record date or
the date such distributions are payable to the New York Stock Exchange or other
applicable self-regulatory organization or to holders of the Preferred
Securities, but in any event not less than one business day prior to such record
date. The Company shall cause AES Trust I to give notice of the Company's
selection of such Extended Interest Payment Period to the holders of the
Preferred Securities.
(b) If as a result of a Dissolution Event Series ____% Debentures have
been distributed to holders of Preferred Securities and Common Securities, at
the time the Company selects an Extended Interest Payment Period, the Company
shall give the holders of the Series ____% Debentures and the Trustee written
notice of its selection of such Extended Interest Payment Period at least 10
business days prior to the earlier of (i) the next succeeding Interest Payment
Date or (ii) the date the Company is required to give notice of the record or
payment date of such interest payment to the New York Stock Exchange or other
applicable self-regulatory organization or to holders of the Series ____%
Debentures.
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SECTION 3.03. The quarter in which any notice is given pursuant to Section
3.02 shall be counted as one of the quarters permitted in the maximum Extended
Interest Payment Period permitted under this Article Three.
ARTICLE FOUR
Covenants Applicable to Series ____% Debentures
SECTION 4.01. So long as any Preferred Securities remain outstanding, the
Company will not declare or pay any dividends on, or redeem, purchase, acquire
or make a distribution or liquidation payment with respect to, any of its common
stock or preferred stock or make any guarantee payments with respect thereto if
at such time (i) the Company shall be in default with respect to its Guarantee
Payments (as defined in the Guarantee Agreement) or other payment obligations
under the Guarantee Agreement, (ii) there shall have occurred any Event of
Default under the Indenture with respect to the Series ____% Debentures or (iii)
the Company shall have given notice of its election of an Extended Interest
Payment Period and such Period, or any extension thereof, is continuing;
provided that the foregoing will not apply to any stock dividends paid by the
Company in Common Stock.
SECTION 4.02. In connection with the distribution of the Series ____%
Debentures to the holders of the Preferred Securities upon a Dissolution Event,
the Company will use its best efforts to list such Series ____% Debentures on
the New York Stock Exchange or on such other exchange as the Preferred
Securities are then listed and traded.
SECTION 4.03. The Company covenants and agrees for the benefit of the
holders of the Preferred Securities to comply fully with all of its obligations
and agreements under the Declaration of Trust, including, without limitation,
its obligations under Article 4 thereof.
SECTION 4.04. Prior to the distribution of Series ____% Debentures to the
holders of Preferred Securities upon a Dissolution Event, the Company covenants
and agrees for the benefit of the holders of the Preferred Securities (i) not to
cause or permit the Common Securities to be transferred except as permitted by
the Declaration of Trust and (ii) that it will use reasonable efforts to cause
the Trust to continue to be treated as a grantor trust for United States federal
income tax purposes, except in connection with a distribution of the Series
____% Debentures as provided in the Declaration of Trust.
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ARTICLE FIVE
Conversion of Debentures
SECTION 5.01. Subject to and upon compliance with the provisions of this
Article Five, the Series __ % Debentures are at the option of the Holder, at any
time through the close of business on ______, 2027 (or, in the case of Series
___% Debentures called for redemption, prior to the close of business on the
Business Day prior to the corresponding redemption date) into fully paid and
nonassessable shares of Common Stock of the Company at an initial conversion
rate of _____ shares of Common Stock for each $_____ in aggregate principal
amount of Series ___% Debentures (equal to a conversion price (as adjusted from
time to time, the "Conversion Price") of $_____ per share of Common Stock),
subject to adjustment as described in this Article Five. A Holder of Series ___%
Debentures may convert any portion of the principal amount of the Series ___%
Debentures into that number of fully paid and nonassessable shares of Common
Stock obtained by dividing the principal amount of the Series ____% Debentures
to be converted by such conversion price. All calculations under this Article
Five shall be made to the nearest cent or to the nearest 1/100th of a share, as
the case may be.
SECTION 5.02. (a) In order to convert all or a portion of the Series ___%
Debentures, the Holder thereof shall deliver to the Conversion Agent an
irrevocable Notice of Conversion setting forth the principal amount of Series
____% Debentures to be converted, together with the name or names, if other than
the Holder, in which the shares of Common Stock should be issued upon conversion
and, if such Series ___% Debentures are definitive Series ___% Debentures,
surrender to the Conversion Agent the Series ___% Debentures to be converted,
duly endorsed or assigned to the Company or in blank. In addition, a holder of
Preferred Securities may exercise its right under the Declaration to convert
such Preferred Securities into Common Stock by delivering to the Conversion
Agent an irrevocable Notice of Conversion setting forth the information called
for by the preceding sentence and directing the Conversion Agent to (i) exchange
such Preferred Security for a portion of the Series ___% Debentures held by the
Trust (at an exchange rate of $___ principal amount of Series ___% Debentures
for each Preferred Security) and (ii) immediately convert such Series ___%
Debentures, on behalf of such holder, into Common Stock of the Company pursuant
to this Article Five and, if such Preferred Securities are in definitive form,
surrendering such Preferred Securities, duly endorsed or assigned to the Company
or in blank. So long as any Preferred Securities are outstanding, the Trust
shall not convert any Series ___% Debentures except pursuant to a Notice of
Conversion delivered to the Conversion Agent by a holder of Preferred
Securities. Any reference herein to a "holder" of Preferred Securities shall
mean a "Holder" of such securities as defined in the Declaration of Trust.
If a Preferred Security is surrendered for conversion after the close of
business on any regular record date for payment of a Distribution and before the
opening of business on the corresponding Distribution payment date, then,
notwithstanding such conversion, the Distribution payable on such Distribution
payment date will be paid in cash to the person in
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whose name the Series ___% Debenture is registered at the close of business on
such record date, and (other than a Series ___% Debenture or a portion of a
Series ___% Debenture called for redemption on a redemption date occurring after
such record date and on or prior to such Distribution payment date) when so
surrendered for conversion, the Series ___% Debenture must be accompanied by
payment of an amount equal to the Distribution payable on such Distribution
payment date. Except as otherwise provided in the immediately preceding
sentence, in the case of any Series ___% Debenture which is converted, interest
whose Maturity Date is after the date of conversion of such Series ___%
Debenture shall not be payable, and the Company shall not make nor be required
to make any other payment, adjustment or allowance with respect to accrued but
unpaid interest on the Series ___% Debenture being converted, which shall be
deemed to be paid in full. Each conversion shall be deemed to have been effected
immediately prior to the close of business on the day on which the Notice of
Conversion was received (the "Conversion Date") by the Conversion Agent from the
Holder or from a holder of the Preferred Securities effecting a conversion
thereof pursuant to its conversion rights under the Declaration, as the case may
be. The Person or Persons entitled to receive the Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of such Common Stock as of the Conversion Date. As promptly as
practicable on or after the Conversion Date, the Company shall issue and deliver
at the office of the Conversion Agent, unless otherwise directed by the Holder
in the Notice of Conversion, a certificate or certificates for the number of
full shares of Common Stock issuable upon such conversion, together with the
cash payment, if any, in lieu of any fraction of any share to the Person or
Persons entitled to receive the same. The Conversion Agent shall deliver such
certificate or certificates to such Person or Persons.
(b) The Company's delivery upon conversion of the fixed number of shares
of Common Stock into which the Series ___% Debentures are convertible (together
with the cash payment, if any, in lieu of fractional shares) shall be deemed to
satisfy the Company's obligation to pay the principal amount at maturity of the
portion of Series ___% Debentures so converted and any unpaid interest
(including Compounded Interest) accrued on such Series ___% Debentures at the
time of such conversion.
(c) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, the Company shall pay to the Conversion Agent a
cash adjustment in an amount equal to the same fraction of the Closing Price of
such fractional interest on the date on which the Series ___% Debentures were
duly surrendered to the Conversion Agent for conversion, or, if such day is not
a day on which any securities are traded on the national securities exchange or
quotation system used to determine the Closing Price (a "Trading Day"), on the
next Trading Day, and the Conversion Agent in turn will make such payment, if
any, to the Holder of the Series ___% Debentures or the holder of the Preferred
Securities so converted.
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(d) In the event of the conversion of any Series ___% Debenture in part
only, a new Series ___% Debenture or Series ___% Debentures for the unconverted
portion thereof will be issued in the name of the Holder thereof upon the
cancellation thereof in accordance with Section 2.05 of the Indenture.
(e) In effecting the conversion transactions described in this Section
5.02, the Conversion Agent is acting as agent of the holders of Preferred
Securities (in the exchange of Preferred Securities for Series ___% Debentures)
and as agent of the Holders of Series ___% Debentures (in the conversion of
Series ___% Debentures into Common Stock), as the case may be. The Conversion
Agent is hereby authorized (i) to exchange Series ___% Debentures held by the
Trust from time to time for Preferred Securities in connection with the
conversion of such Preferred Securities in accordance with this Article Five and
(ii) to convert all or a portion of the Series ___% Debentures into Common Stock
and thereupon to deliver such shares of Common Stock in accordance with the
provisions of this Article Five and to deliver to the Trust a new Series ___%
Debenture or Series ___% Debentures for any resulting unconverted principal
amount.
SECTION 5.03. (a) The Conversion Price shall be adjusted from time to time
as follows:
(i) In case the Company shall pay or make a dividend or other
distribution on Common Stock in shares of Common Stock, then the
Conversion Price in effect at the opening of business on the day following
the date fixed for the determination of shareholders entitled to receive
such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction the numerator of which shall be the number
of shares of Common Stock outstanding at the close of business on the date
fixed for such determination and the denominator of which shall be the sum
of such number of shares and the total number of shares constituting such
dividend or other distribution, such reduction to become effective
immediately after the opening of business on the day following the date
fixed for such determination. For the purposes of this subparagraph (i),
the number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company (except to the extent
such dividend or distribution is being made with respect to such shares)
but shall include shares issuable in respect of scrip certificates issued
in lieu of fractions of shares of Common Stock.
(ii) In case the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, then the
Conversion Price in effect at the opening of business on the day following
the day upon which such subdivision becomes effective shall be
proportionately reduced, and, conversely, in case the outstanding shares
of Common Stock shall be combined into a smaller amount of shares of
Common Stock, then the Conversion Price in effect at the opening of
business on the day following the day upon which such combination
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becomes effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(iii) In case the Company shall issue rights or warrants to all
holders of Common Stock entitling them (for a period expiring within 45
days after the record date fixed for a distribution of such rights or
warrants) to subscribe for or purchase shares of Common Stock at a price
per share less than the Current Market Price (as hereinafter defined) per
share (determined as provided in subparagraph (vii) below) of Common Stock
on the date fixed for the determination of shareholders entitled to
receive such rights or warrants (other than pursuant to a dividend
reinvestment plan), then the Conversion Price in effect at the opening of
business on the day following the date fixed for such determination shall
be reduced by multiplying such Conversion Price by a fraction the
numerator of which shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common
Stock so offered for subscription or purchase would purchase at such
Current Market Price and the denominator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock so offered
for subscription or purchase, such reduction to become effective
immediately after the opening of business on the day following the date
fixed for such determination. For the purposes of this subparagraph (iii),
the number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company agrees not to issue any
rights or warrants in respect of shares of Common Stock held in the
treasury of the Company. To the extent that shares of Common Stock are not
delivered after the expiration of such rights or warrants, the Conversion
Price shall be readjusted to the Conversion Price which would then be in
effect had the adjustments made in respect of the issuance of such rights
or warrants been made on the basis of delivery of only the number of
shares of Common Stock actually delivered.
(iv) Subject to the second paragraph of this subparagraph (iv), in
case the Company shall, by dividend or otherwise, distribute to all
holders of Common Stock (A) shares of capital stock of the Company (other
than Common Stock), (B) evidence of indebtedness of the Company and/or (C)
other assets (including securities, but excluding (1) any rights or
warrants referred to in subparagraph (iii) above, (2) any rights or
warrants to obtain capital stock of a company other than the Company or
any subsidiary of the Company (including any rights offerings of the
Company with respect to capital stock of companies in which the Company
has
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an investment (a "Rights Offering")), (3) dividends or distributions in
connection with the liquidation, dissolution or winding-up of the Company,
(4) dividends payable solely in cash that may from time to time be fixed
by the Board of Directors of the Company and (5) dividends or
distributions referred to in subparagraph (i) above), then in each case
(unless the Company makes the election referred to in the next sentence)
the Conversion Price shall be adjusted so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately
prior to the close of business on such record date by a fraction the
numerator of which shall be the Current Market Price per share (determined
as provided in subparagraph (vii) below) of the Common Stock on such
record date (the "Reference Date") less the then fair market value on the
Reference Date (as determined in good faith by the Board of Directors of
the Company, whose determination shall be conclusive and shall be
described in a statement filed with the Depositary and the Trustee) of the
portion of the shares of capital stock of the Company, evidences of
indebtedness or other assets so distributed (and for which an adjustment
to the Conversion Price has not been made previously pursuant to the terms
of this Article Five) applicable to one share of Common Stock and the
denominator shall be such Current Market Price per share of the Common
Stock, such adjustment to become effective immediately prior to the
opening of business on the day following the Reference Date. However, the
Company may elect, in its sole discretion, in lieu of the foregoing
adjustment, to make adequate provision so that each holder of Securities
shall have the right to receive upon conversion thereof the amount and
kind of shares of capital stock, evidences of indebtedness or other assets
such holder would have received had such holder converted such shares on
such record date. If the Board of Directors of the Company determines the
fair market value of any distribution for purposes of this subparagraph
(iv) by reference to the actual or when issued trading market for any
securities (including shares of capital stock or evidence of indebtedness
of the Company) comprising a distribution of securities, it must in doing
so consider the price in such market over the period used in computing the
Current Market Price of the Common Stock.
For purposes of this subparagraph (iv), any dividend or distribution
that includes both (x) any of the items described in clauses (A), (B) or
(C) of the first paragraph of this subparagraph (iv) and (y) Common Stock
or rights or warrants to subscribe for or purchase Common Stock of the
type referred to in subparagraph (iii) shall be deemed to be (1) a
dividend or distribution of shares of capital stock of the Company (other
than Common Stock), evidences of indebtedness of the Company or other
assets of the type referred to in clause (C) of the first paragraph of
this subparagraph (iv) (making any Conversion Price reduction required by
this subparagraph (iv)) immediately followed by (2) a dividend or
distribution of such Common Stock or rights or warrants to purchase Common
Stock of the type referred to in subparagraph (iii) (making any further
Conversion Price reduction required by subparagraph (i) or (iii) of this
Section 5.03(a)), except (A) the
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<PAGE> 16
Reference Date of such dividend or distribution as defined in this
subparagraph (iv) shall be substituted as "the date fixed for the
determination of shareholders entitled to receive such rights or warrants"
and "the date fixed for such determination" within the meaning of
subparagraphs (i) and (iii) of this Section 5.03(a) and (B) any shares of
Common Stock included in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for such
determination" within the meaning of subparagraph (i) of this Section
5.03(a).
The occurrence of a distribution or the occurrence of any other
event as a result of which holders of Series ___% Debentures converting
such notes into Common Stock hereunder will not be entitled to receive
rights issued pursuant to any shareholder protective rights agreement now
or hereafter in effect (the "Other Rights") in the same amount and manner
as if such holders had converted such shares immediately prior to the
occurrence of such distribution or other event shall be deemed a
distribution of Other Rights for the purposes of conversion adjustments
pursuant to this subparagraph (iv). In lieu of making any adjustment to
the Conversion Price under this subparagraph (iv) as a result of such a
distribution of Other Rights, the Company may elect, in its sole
discretion, to provide that Other Rights shall be issuable in the same
amount and manner upon conversion of the Series ___% Debentures without
regard to whether the shares of Common Stock issuable upon conversion of
the Series ___% Debentures were issued before or after such distribution
or other event.
(v) In case the Company shall, by dividend or otherwise, at any time
distribute cash to all holders of Common Stock, excluding (A) any cash
dividends on Common Stock to the extent that the aggregate cash dividends
per share of Common Stock in any consecutive 12-month period do not exceed
the greater of (x) the amount per share of Common Stock of the cash
dividends paid on the Common Stock in the immediately preceding 12-month
period, to the extent that such dividends for the immediately preceding
12-month period did not require an adjustment to the Conversion Price
pursuant to this subparagraph (v) (as adjusted to reflect subdivisions or
combinations of the Common Stock) and (y) 15% of the average of the daily
Closing Prices (as hereinafter defined) of the Common Stock for the ten
consecutive Trading Days immediately prior to the date of declaration of
such dividend and (B) any dividend or distribution in connection with the
liquidation, dissolution or winding-up of the Company, whether voluntary
or involuntary; provided, however, that no adjustment shall be made
pursuant to this subparagraph (v) if such distribution would otherwise
constitute a Fundamental Change (as hereinafter defined) and be reflected
in a resulting adjustment to the Conversion Price as provided in this
Article Five) then, in each case (unless the Company makes the election
referred to in the proviso following this clause), the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the
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<PAGE> 17
Conversion Price in effect at the close of business on such record date by
a fraction the numerator of which shall be the Closing Price of a share of
Common Stock on such record date less the amount of cash so distributed
(to the extent not excluded as provided above) applicable to one share of
Common Stock, and the denominator shall be the Closing Price of a share of
Common Stock, such reduction to become effective immediately prior to the
opening of business on the day following such record date; provided,
however, that the Company may elect, in its sole discretion, in lieu of
the foregoing adjustment, to make adequate provision so that each holder
of Securities shall thereafter have the right to receive upon conversion
the amount of cash such holder would have received had such holder
converted each Security on such record date. If any adjustment is required
to be made as set forth in this subparagraph (v) as a result of a
distribution which is a dividend described in clause (A) of this
subparagraph (v), such adjustment will be based upon the amount by which
such distribution exceeds the amount of the dividend permitted to be
excluded pursuant to such clause (A) of this subparagraph (v). If an
adjustment is required to be made pursuant to this subparagraph (v) as a
result of a distribution which is not such a dividend, such adjustment
would be based upon the full amount of such distribution.
(vi) In case of the consummation of a tender or exchange offer
(other than an odd-lot tender offer) made by the Company or any subsidiary
of the Company for all or any portion of the outstanding shares of Common
Stock to the extent that the cash and fair market value (as determined in
good faith by the Board of Directors of the Company, whose determination
shall be conclusive and shall be described in a resolution of such Board)
of any other consideration included in such payment per share of Common
Stock at the last time (the "Expiration Time") tenders or exchanges may be
made pursuant to such tender or exchange offer (as amended) exceed by more
than 10%, with any smaller excess being disregarded in computing the
adjustment to the Conversion Price provided in this subparagraph (vi), the
first reported sale price per share of Common Stock on the Trading Day
next succeeding the Expiration Time, then the Conversion Price shall be
reduced so that the same shall equal the price determined by multiplying
the Conversion Price in effect immediately prior to the Expiration Time by
a fraction the numerator of which shall be the number of shares of Common
Stock outstanding (including any tendered or exchanged shares) on the
Expiration Time multiplied by the first reported sale price of the Common
Stock on the Trading Day next succeeding the Expiration Time and the
denominator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to shareholders based on
the acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of all shares validly tendered or exchanged and not
withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any
Purchased Shares) on the Expiration
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<PAGE> 18
Time and the first reported sale price of the Common Stock on the Trading
Day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day
following the Expiration Time.
(vii) For the purpose of any computation under this Article Five,
the "Current Market Price per share" of Common Stock on any day shall be
deemed to be the average of the daily Closing Prices (as hereinafter
defined) per share of Common Stock for the ten consecutive Trading Days
prior to and including the date in question; provided, however, that (1)
if the "ex" date (as hereinafter defined) for any event (other than the
issuance, distribution or Fundamental Change requiring such computation)
that requires an adjustment to the Conversion Price pursuant to this
Article Five (the "Other Event") occurs during such ten consecutive
Trading Days and prior to the "ex" date for the issuance, distribution or
Fundamental Change requiring such computation (the "Current Event"), the
Closing Price for each Trading Day prior to the "ex" date for such Other
Event shall be adjusted by multiplying such Closing Price by the same
fraction by which the Conversion Price is so required to be adjusted as a
result of such Other Event, (2) if the "ex" date for any Other Event
occurs on or after the "ex" date for the Current Event and on or prior to
the date in question, the Closing Price for each Trading Day on and after
the "ex" date for such Other Event shall be adjusted by multiplying such
Closing Price by the reciprocal of the fraction by which the Conversion
Price is so required to be adjusted as a result of such Other Event
(provided that in the event that such fraction is required to be
determined at a date subsequent to the date in question and with reference
to events taking place subsequent to the date in question, the Board of
Directors of the Company or, to the extent permitted by applicable law, a
duly authorized committee thereof, whose determination shall be conclusive
and described in a resolution of the Board of Directors of the Company or
such duly authorized committee thereof, as the case may be, shall in good
faith estimate such fraction based on assumptions it deems reasonable
regarding such events taking place subsequent to the date in question, and
such estimated fraction shall be used for purposes of such adjustment
until such time as the actual fraction by which the Conversion Price is so
required to be adjusted as a result of such Other Event is determined),
and (3) if the "ex" date for the Current Event is on or prior to the date
in question, after taking into account any adjustment required pursuant to
clause (1) or (2) of this proviso, the Closing Price for each Trading Day
on or after such "ex" date shall be adjusted by adding thereto the amount
of any cash and the fair market value (as determined in good faith by the
Board of Directors of the Company or, to the extent permitted by
applicable law, a duly authorized committee thereof in a manner consistent
with any determination of such value for purposes of this Article Five,
whose determination shall be conclusive and described in a resolution of
the Board of Directors of the Company or such duly authorized committee
thereof, as the case may be) of the shares of capital stock,
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<PAGE> 19
evidences of indebtedness or other assets being distributed applicable to
one share of Common Stock as of the close of business on the day before
such "ex" date. For purposes of this subparagraph (vii), the term "ex"
date, (1) when used with respect to any issuance, distribution or
Fundamental Change, means the first date on which the Common Stock trades
regular way on the relevant exchange or in the relevant market from which
the Closing Price was obtained without the right to receive such issuance,
such distribution or the cash, securities, property or other assets
distributable in such Fundamental Change to holders of the Common Stock,
(2) when used with respect to any subdivision or combination of shares of
Common Stock, means the first date on which the Common Stock trades
regular way on such exchange or in such market after the time at which
such subdivision or combination becomes effective and (3) when used with
respect to any tender or exchange offer means the first date on which the
Common Stock trades regular way on such exchange or in such market after
the Expiration Time of such offer.
(viii) No adjustment in the Conversion Price shall be required
pursuant to this Section 5.03(a) unless the adjustment would require a
change of at least 1% of such price; provided, however, that any
adjustments which by reason of this subparagraph (viii) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations shall be made to the nearest cent
(with .005 being rounded upward) or to the nearest 1/100th of a share
(with .005 of a share being rounded upward), as the case may be.
Notwithstanding anything to the contrary in this Article Five, the Company
from time to time may, to the extent permitted by law, reduce the
Conversion Price by any amount for any period of at least 20 Business
Days, in which case the Company shall give at least 15 days' notice of
such reduction to the holders of Securities and the Trustee. In addition,
the Company may, at its option, make such reductions in the Conversion
Price in addition to those set forth in this Article Five, as it considers
to be advisable in order to avoid or diminish any income tax to any
holders of shares of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or
subscribe for stock or from any event treated as such for income tax
purposes or for any other reasons.
(ix) In any case in which this Article Five provides that an
adjustment shall become effective immediately after a record date for an
event, the Company may defer until the occurrence of such event (A)
issuing to the holder of any Series ___% Debentures converted after such
record date and before the occurrence of such event the additional shares
of Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Stock issuable upon such
conversion before giving effect to such adjustment and (B) paying to such
holder any amount in cash in lieu of any fractional shares pursuant to
this Article Five.
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<PAGE> 20
(x) For purposes of this Article Five, "Common Stock" includes any
stock of any class of the Company which has no preference in respect of
dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company and
which is not subject to redemption by the Company. However, subject to the
provisions of this Article Five, shares issuable on conversion of Series
___% Debentures shall include only shares of the class designated as the
Company Common Stock on the date of the initial issuance of Series ___%
Debentures by the Company or shares of any class or classes resulting from
any reclassification or reclassification thereof and which have no
preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding-up of the
Company and which are not subject to redemption by the Company; provided,
however, that if at any time there shall be more than one such resulting
class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such
class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
(b) Whenever the Conversion Price is adjusted as herein provided:
(i) the Company shall compute the adjusted Conversion Price and
shall prepare a certificate signed by the Chief Financial Officer or the
Treasurer of the Company setting forth the adjusted Conversion Price and
showing in reasonable detail the facts upon which such adjustment is
based, and such certificate shall forthwith be filed with the Trustee and
the transfer agent for the Preferred Securities and the Series __%
Debentures; and
(ii) a notice stating the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall as soon as practicable
be mailed by the Company to all record holders of Preferred Securities and
the Series __% Debentures at their last addresses as they appear upon the
stock transfer books of the Company and the Trust.
SECTION 5.04. (a) In the event that the Company shall be a party to any
transaction or series of transactions constituting a Fundamental Change,
including, without limitation, (i) any recapitalization or reclassification of
shares of Common Stock (other than a change in the par value or as a result of a
subdivision or combination of the Common Stock), (ii) any consolidation of the
Company with, or merger of the Company into, any other corporation or any merger
of another corporation into the Company as a result of which holders of Common
Stock shall be entitled to receive securities or other property or assets
(including cash) with respect to or in exchange for Common Stock (other than a
merger which does not result in a reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock), (iii) any sale or transfer
of all or substantially all of the assets of the Company, or (iv) any compulsory
share exchange,
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<PAGE> 21
pursuant to any of which the holders of Common Stock shall be entitled to
receive other securities, cash or other property, then appropriate provision
shall be made as part of the terms of such transaction or series of transactions
so that the holder of each Series ___% Debenture then outstanding shall have the
right thereafter to convert such Series ___% Debenture only into (A) if any such
transaction does not constitute a Common Stock Fundamental Change (as
hereinafter defined), the kind and amount of the securities, cash or other
property that would have been receivable upon such recapitalization,
reclassification, consolidation, merger, sale, transfer or share exchange by a
holder of the number of shares of Common Stock into which such Series ___%
Debenture might have been converted immediately prior to such recapitalization,
reclassification, consolidation, merger, sale, transfer or share exchange,
after, in the case of a Non-Stock Fundamental Change (as hereinafter defined),
giving effect to any adjustment in the Conversion Price required by the
provisions which follow in subparagraph (i) of Section 5.04(c), and (B) in the
case of a Common Stock Fundamental Change (as hereinafter defined), common stock
of the kind received by holders of Common Stock as a result of such Common Stock
Fundamental Change in an amount determined pursuant to the provisions which
follow in subparagraph (ii) of Section 5.04(c). The company formed by such
consolidation or resulting from such merger or which acquires such assets or
which acquires the Common Stock, as the case may be, shall enter into a
supplemental indenture with the Trustee, satisfactory in form to the Trustee,
the provisions of which provide for adjustments which, for events subsequent to
the effective date of such supplemental indenture, shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Article Five. The
above provisions shall similarly apply to successive recapitalization,
reclassifications, consolidations, mergers, sales, transfers or share exchanges.
(b) Notwithstanding any other provisions in this Article Five to the
contrary, if any Fundamental Change (as hereinafter defined) occurs, then the
Conversion Price in effect will be adjusted immediately following such
Fundamental Change as described below in Section 5.04(c). In addition, in the
event of a Common Stock Fundamental Change, each shall be convertible solely
into common stock of the kind received by holders of Common Stock as the result
of such Common Stock Fundamental Change as more specifically provided below in
Section 5.04(c).
(c) For purposes of calculating any adjustment to be made pursuant to this
Article Five in the event of a Fundamental Change, immediately following such
Fundamental Change (and for such purposes a Fundamental Change shall be deemed
to occur on the earlier of (a) the occurrence of such Fundamental Change and (b)
the date, if any, fixed for determination of shareholders entitled to receive
the cash, securities, property or other assets distributable in such Fundamental
Change to holders of the Common Stock);
(i) in the case of a Non-Stock Fundamental Change, the Conversion
Price per share of Common Stock shall be the lower of (A) the Conversion
Price in
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<PAGE> 22
effect immediately prior to such Non-Stock Fundamental Change, but after
giving effect to any other adjustments effected pursuant to this Article
Five, and (B) the product of (1) the greater of the Applicable Price (as
hereinafter defined) or the then applicable Reference Market Price (as
hereinafter defined) and (2) a fraction the numerator of which shall be
$100 and the denominator of which shall be the amount set forth below
(based on the date on which such Non-Stock Fundamental Change occurs). For
the twelve month period beginning ____:
Year Denominator
---- -----------
1997 %
1998
1999
2000
2001
2002
2003
2004
2005
2006
and thereafter, 100.00;
(ii) in the case of a Common Stock Fundamental Change, the
Conversion Price per share of Common Stock shall be the Conversion Price
in effect immediately prior to such Common Stock Fundamental Change, but
after giving effect to any other adjustments effected pursuant to this
Article Five, multiplied by a fraction, the numerator of which is the
Purchaser Stock Price (as hereinafter defined) and the denominator of
which is the Applicable Price; provided, however, that in the event of a
Common Stock Fundamental Change in which (A) 100% of the value of the
consideration received by a holder of Common Stock is common stock of the
successor, acquiror or other third party (and cash, if any, paid with
respect to any fractional interests in such common stock resulting from
such Common Stock Fundamental Change) and (B) all of the Common Stock
shall have been exchanged for, converted into or acquired for common stock
(and cash, if any, with respect to fractional interests) of the successor,
acquiror or other third party, the Conversion Price per share of Common
Stock immediately following such Common Stock Fundamental Change shall be
the Conversion Price in effect immediately prior to such Common Stock
Fundamental Change divided by the number of shares of common stock of the
successor, acquiror, or other third party received by a holder of one
share of Common Stock as a result of such Common Stock Fundamental Change.
(d) The following definitions shall apply to terms used in this Article
Five:
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<PAGE> 23
(i) "Applicable Price" shall mean (A) in the event of a Non-Stock
Fundamental Change in which the holders of Common Stock receive only cash,
the amount of cash receivable by a holder of one share of Common Stock and
(B) in the event of any other Fundamental Change, the average of the
Closing Prices for one share of Common Stock during the ten Trading Days
immediately prior to the record date for the determination of the holders
of Common Stock entitled to receive cash, securities, property or other
assets in connection with such Fundamental Change or, if there is no such
record date, prior to the date upon which the holders of Common Stock
shall have the right to receive such cash, securities, property or other
assets.
(ii) "Closing Price" with respect to any securities on any day shall
mean the closing sale price, regular way, on such day or, in case no such
sale takes place on such day, the average of the reported closing bid and
asked prices, regular way, in each case on the New York Stock Exchange or,
if such security is not listed or admitted to trading on such Exchange, on
the principal national securities exchange or quotation system on which
such security is quoted or listed or admitted to trading or, if not quoted
or listed or admitted to trading on any national securities exchange or
quotation system, the average of the closing bid and asked prices of such
security on the over-the-counter market on the date in question as
reported by the National Quotation Bureau Incorporated, or a similarly
generally accepted reporting service or, if not so available, in such
manner as furnished by any New York Stock Exchange member firm selected
from time to time by the Board of Directors of the Company for that
purpose or a price determined in good faith by the Board of Directors of
the Company.
(iii) "Common Stock Fundamental Change" shall mean any Fundamental
Change in which more than 50% of the value (as determined in good faith by
the Board of Directors of the Company) of the consideration received by
the holders of Common Stock pursuant to such transactions consists of
shares of common stock that, for the ten consecutive Trading Days
immediately prior to such Fundamental Change, has been admitted for
listing or admitted for listing subject to notice of issuance on a
national securities exchange or quoted on the Nasdaq National Market;
provided, however, that a Fundamental Change shall not be a Common Stock
Fundamental Change unless either (A) the Company continues to exist after
the occurrence of such Fundamental Change and the outstanding Series ___%
Debentures continue to exist as outstanding Series ___% Debentures, or (B)
the outstanding Series ___% Debentures continue to exist as Series ___%
Debentures and are convertible into common stock of the successor to the
Company.
(iv) "Fundamental Change" shall mean the occurrence of any
transaction or event or series of transactions or events pursuant to which
all or substantially all of the Common Stock shall be exchanged for,
converted into, acquired for or
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<PAGE> 24
constitutes solely the right to receive cash, securities, property or
other assets (whether by means of an exchange offer, liquidation, tender
offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise); provided, however, in the case of a plan
involving more than one such transaction or event, for purposes of
adjustment of the Conversion Price, such Fundamental Change shall be
deemed to have occurred when substantially all of the Common Stock has
been exchanged for, converted into, or acquired for or constitutes solely
the right to receive cash, securities, property or other assets, but the
adjustment shall be based upon the consideration which the holders of
Common Stock received in such transaction or event as a result of which
more than 50% of the Common Stock shall have been exchanged for, converted
into, or acquired for or shall constitute solely the right to receive
cash, securities, property or other assets.
(v) "Non-Stock Fundamental Change" shall mean any Fundamental
Change other than a Common Stock Fundamental Change.
(vi) "Purchaser Stock Price" shall mean, with respect to any Common
Stock Fundamental Change, the average of the Closing Prices for one share
of the common stock received by holders of Common Stock in such Common
Stock Fundamental Change during the ten Trading Days immediately prior to
the record date for the determination of the holders of Common Stock
entitled to receive such common stock or, if there is no such record date,
prior to the date upon which the holders of Common Stock shall have the
right to receive such common stock.
(vii) "Reference Market Price" shall initially mean $_____ (which is
an amount equal to 66-2/3% of the last reported sale price for the Common
Stock on the New York Stock Exchange on ______, 1997) and, in the event of
any adjustment to the Conversion Price other than as a result of a
Fundamental Change, the Reference Market Price shall also be adjusted so
that the ratio of the Reference Market Price to the Conversion Price after
giving effect to any such adjustment shall always be the same as the ratio
of $____ to the initial Conversion Price set forth in this Article Five.
(e) In determining the amount and type of consideration received by a
holder of Common Stock in the event of a Fundamental Change, consideration
received by a holder of Common Stock pursuant to a statutory right of appraisal
will be disregarded.
SECTION 5.05. In case:
(i) the Company shall declare a dividend (or any other distribution)
on Common Stock that would cause an adjustment to the Conversion Price of
the Series ___% Debentures pursuant to the terms of any of the
subparagraphs above
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<PAGE> 25
(including such an adjustment that would occur but for the terms of the
first sentence of Section 5.03(a)(viii) above); or
(ii) the outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock or combined into a smaller
number of shares of Common Stock; or
(iii) the Company shall authorize the granting to the holders of
Common Stock generally of rights or warrants (for a period expiring within
45 days after the record date fixed for a distribution of such rights and
warrants) to subscribe for or purchase any shares of the Company's capital
stock or other capital stock of any class or of any other rights
(including any Rights Offerings); or
(iv) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding shares of Common Stock), or
of any consolidation, merger or share exchange to which the Company is a
party and for which approval of any shareholders of the Company is
required, or of the sale or transfer of all or substantially all of the
assets of the Company or a compulsory share exchange; or
(v) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then the Company shall (i) if any Preferred Securities are outstanding, cause to
be filed with the transfer agent for the Preferred Securities, and shall cause
to be mailed to the holders of record of the Preferred Securities, at their last
addresses as they shall appear upon the stock transfer books of the Trust or
(ii) shall cause to be mailed to all Holders at their last addresses as they
shall appear in the books and records of the Trust, at least 15 days prior to
the applicable record or effective date hereinafter specified, a notice stating
(A) the date on which a record (if any) is to be taken for the purpose of such
dividend, distribution, rights or warrants or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be entitled to
such dividend, distribution, rights or warrants are to be determined or (B) the
date on which such reclassification, consolidation, merger, sale, transfer,
share exchange, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up (but no failure to mail such notice or any defect therein or in
the mailing thereof shall affect the validity of the corporate action required
to be specified in such notice).
SECTION 5.06. The Company shall reserve, free from pre-emptive rights, out
of its authorized but unissued shares, sufficient shares to provide for the
conversion of the Series ___% Debentures from time to time as such Series ___%
Debentures are presented
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<PAGE> 26
for conversion, provided, that nothing contained herein shall be construed to
preclude the Company from satisfying its obligations in respect of the
conversion of Series ___% Debentures by delivery of repurchased shares of Common
Stock which are held in the treasury of the Company.
If any shares of Common Stock to be reserved for the purpose of conversion
of Series ___% Debentures hereunder require registration with or approval of any
governmental authority under any Federal or State law before such shares may be
validly issued or delivered upon conversion, then the Company covenants that it
will in good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be, provided, however, that nothing in
this Section 5.06 shall be deemed to affect in any way the obligations of the
Company to convert Series ___% Debentures into Common Stock as provided in this
Article Five.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the Common Stock, the
Company will take all corporate action which may, in the Opinion of Counsel, be
necessary in order that the Company may validly and legally issue fully paid and
non-assessable shares of Common Stock at such adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be issued
upon conversion of Series ___% Debentures will upon issue be fully paid and
non-assessable by the Company and free of pre-emptive rights.
SECTION 5.07. Notwithstanding the foregoing provisions, the issuance of
any shares of Common Stock pursuant to any plan providing for the reinvestment
of dividends or interest payable on securities of the Company and the investment
of additional optional amounts in shares of Common Stock under any such plan,
and the issuance of any shares of Common Stock or options or rights to purchase
such shares pursuant to any employee benefit plan or program of the Company or
pursuant to any option, warrant, right or exercisable, exchangeable or
convertible security outstanding as of ______, 1997, shall not be deemed to
constitute an issuance of Common Stock or exercisable, exchangeable or
convertible securities by the Company to which any of the adjustment provisions
described above applies. There shall also be no adjustment of the Conversion
Price in case of the issuance of any stock (or securities convertible into or
exchangeable for stock) of the Company except as specifically described in this
Article Five.
SECTION 5.08. In case the Company shall, by dividend or otherwise, declare
or make a distribution on the Common Stock referred to in Section 5.03(a)(iv) or
5.03(a)(v) (including, without limitation, dividends or distributions referred
to in the last sentence of Section 5.03(a)(vi)), the Holder of the Series ___%
Debentures, upon the conversion thereof subsequent to the close of business on
the date fixed for the determination of stockholders entitled to receive such
distribution and prior to the effectiveness of the
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<PAGE> 27
Conversion Price adjustment in respect of such distribution, shall also be
entitled to receive for each share of Common Stock into which the Series ___%
Debentures are converted, the portion of the shares of Common Stock, rights,
warrants, evidences of indebtedness, shares of capital stock, cash and assets so
distributed applicable to one share of Common Stock; provided, however, that, at
the election of the Company (whose election shall be evidenced by a resolution
of the Board of Directors) with respect to all Holders so converting, the
Company may, in lieu of distributing to such Holder any portion of such
distribution not consisting of cash or securities of the Company, pay such
Holder an amount in cash equal to the fair market value thereof (as determined
in good faith by the Board of Directors, whose determination shall be conclusive
and described in a resolution of the Board of Directors). If any conversion of
Series ___% Debentures described in the immediately preceding sentence occurs
prior to the payment date for a distribution to holders of Common Stock which
the Holder of Series ___% Debentures so converted is entitled to receive in
accordance with the immediately preceding sentence, the Company may elect (such
election to be evidenced by a resolution of the Board of Directors) to
distribute to such Holder a due bill for the shares of Common Stock, rights,
warrants, evidences of indebtedness, shares of capital stock, cash or assets to
which such Holder is so entitled, provided, that such due bill (a) meets any
applicable requirements of the principal national securities exchange or other
market on which the Common Stock is then traded and (b) requires payment or
delivery of such shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash or assets no later than the date of
payment or delivery thereof to holders of shares of Common Stock receiving such
distribution.
ARTICLE SIX
Form of Series ____% Debentures
SECTION 6.01. The Series ____% Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the following
forms:
(FORM OF FACE OF DEBENTURE)
[IF THE NOTE IS TO BE A GLOBAL DEBENTURE, INSERT - This Debenture is a
Global Debenture within the meaning of the Indenture hereinafter referred to and
is registered in the name of a Depositary or a nominee of a Depositary. This
Debenture is exchangeable for Debentures registered in the name of a person
other than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Debenture (other than a
transfer of this Debenture as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary) may be registered except in limited circumstances.
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<PAGE> 28
Unless this Debenture is presented by an authorized representative to The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any Debenture
issued is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company and any payment
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede &
Co., has an interest herein.]
No. $
CUSIP NO. ____________
THE AES CORPORATION
____% JUNIOR SUBORDINATED DEBENTURE
DUE 2027
The AES Corporation, a corporation duly organized and existing under the laws of
the State of Delaware (herein referred to as the "Company", which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to _____, or registered assigns, the
principal sum of _________ Dollars on ___________, 2027, and to pay interest on
said principal sum from ___________, 1997 or from the most recent interest
payment date (each such date, an "Interest Payment Date") to which interest has
been paid or duly provided for, quarterly (subject to deferral as set forth
herein) in arrears commencing ___________, 1997 at the rate of ____% per annum
plus Compounded Interest, if any, until the principal hereof shall have become
due and payable, and on any overdue principal and premium, if any, and (without
duplication and to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the same rate per
annum. The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year twelve 30-day months. In the event that
any date on which interest is payable on this Debenture is not a business day,
then payment of interest payable on such date will be made on the next
succeeding day which is a business day (and without any interest or other
payment in respect of any such delay), except that, if such business day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding business day, in each case with the same force and effect as if made
on such date. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the person in whose name this Debenture (or one or more Predecessor
Debentures, as defined in said Indenture) is registered at the close of business
on the regular record date for such interest
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<PAGE> 29
installment, [which shall be the close of business on the day next preceding
such Interest Payment Date, provided if the Preferred Securities of AES Trust I
are no longer in book-entry only form, the regular record dates shall be the
close of business on the fifteenth (15th) day of each month next preceding such
Interest Payment Date] [IF PURSUANT TO THE PROVISIONS OF SECTION 2.11(c) OF THE
INDENTURE THE SERIES ____% DEBENTURES ARE NOT REPRESENTED BY A GLOBAL DEBENTURE
- -- which shall be the close of business on the fifteenth (15th) day of each
month in which such Interest Payment Date occurs.] Any such interest installment
not punctually paid or duly provided for shall forthwith cease to be payable to
the registered holders on such regular record date, and may be paid to the
person in whose name this Debenture (or one or more Predecessor Debentures) is
registered at the close of business on a special record date to be fixed by the
Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered holders of this series of Debentures not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Debentures may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture. The principal of
(and premium, if any) and the interest on this Debenture shall be payable at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City and State of New York, in any coin or currency of the United
States of America which at the time of payment is legal tender for payment of
public and private debts; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the registered holder at
such address as shall appear in the Debenture register and that the payment of
principal will only be made upon the surrender of this Debenture to the Trustee.
Notwithstanding the foregoing, so long as the owner and record holder of this
Debenture is the Property Trustee (as defined in the Indenture referred to on
the reverse hereof), the payment of the principal of (and premium, if any) and
interest (including Compounded Interest, if any) on this Debenture will be made
at such place and to such account of the Property Trustee as may be designated
by the Property Trustee.
The indebtedness evidenced by this Debenture is, to the extent provided in
the Indenture, subordinate and subject in right of payment to the prior payment
in full of all Senior Indebtedness, and this Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Debenture,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes. Each Holder hereof, by his acceptance hereof, hereby waives all notice
of the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such Holder upon said
provisions.
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<PAGE> 30
This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
Unless the Certificate of Authentication hereon has been executed by the
Trustee referred to on the reverse side hereof, this Debenture shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
The provisions of this Debenture are continued on the reverse side hereof
and such continued provisions shall for all purposes have the same effect as
though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be executed.
Dated ___________
The AES Corporation
By ____________________
Attest:
By ______________________
Secretary
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<PAGE> 31
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures described in the
within-mentioned Indenture.
The First Bank of Chicago _________________________
as Trustee or as Authentication Agent
By _______________________ By ______________________
Authorized Signatory Authorized Signatory
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<PAGE> 32
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Debentures"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of March __, 1997 duly executed and delivered between
the Company and The First National Bank of Chicago, a national banking
association, as Trustee (herein referred to as the "Trustee"), as supplemented
by the First Supplemental Indenture dated as of March __, 1997 between the
Company and the Trustee (said Indenture as so supplemented being hereinafter
referred to as the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Debentures, and, to the extent
specifically set forth in the Indenture, the holders of Senior Indebtedness and
Preferred Securities. By the terms of the Indenture, the Debentures are issuable
in series which may vary as to amount, date of maturity, rate of interest and in
other respects as in the Indenture provided. This series of Debentures is
designated the ____% Junior Subordinated Debentures due 2027 and is limited in
aggregate principal amount as specified in said First Supplemental Indenture.
Except as provided in the next paragraph, the Debentures may not be
redeemed by the Company prior to ____________, 2000. The Company shall have the
right to redeem this Debenture at the option of the Company, without premium or
penalty, in whole or in part at any time on or after __________ __, 2000 (an
"Optional Redemption"), upon not less than 30 nor move than 60 days notice to
the Holder of the Series __% Debentures, at the following prices (as expressed
as percentages of the principal amount of the Debentures) (the "Optional
Redemption Price"), together with any accrued but unpaid interest, including any
Compounded Interest, if any, to, but including, the date of such redemption, if
redeemed during the 12-month period beginning _____:
Year Redemption Price
---- ----------------
2000 ___%
2001 ___%
2002 ___%
2003 ___%
2004 ___%
and 100% if redeemed on or after _____, 2005.
If the Series __% Debentures are redeemed on any Interest Payment Date,
accrued and unpaid interest shall be payable to Holders of record on the
relevant record date.
The Company may not redeem any Series __% Debentures unless all accrued
and unpaid interest thereon, including Compounded Interest, if any, has been
paid for all quarterly periods terminating on or prior to the date of notice of
redemption. So long as the corresponding Trust Securities are outstanding, the
proceeds from the redemption of the Series __% Debentures will be used to redeem
the Trust Securities.
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<PAGE> 33
If the Debentures are only partially redeemed by the Company pursuant to
an Optional Redemption, the Debentures will be redeemed pro rata or by lot or by
any other method utilized by the Trustee; provided if, at the time of
redemption, the Debentures are registered as a Global Debenture, the Depository
shall determine the principal amount of such Debentures held by each holder of
Debentures to be redeemed in accordance with its customary procedures.
If, at any time, a Tax Event (as defined below) shall occur or be
continuing after receipt of a Dissolution Tax Opinion (as defined below) and (i)
the Regular Trustees and the Company shall have received an opinion (a
"Redemption Tax Opinion") of a nationally recognized independent tax counsel
experienced in such matters that, as a result of a Tax Event, there is more than
an insubstantial risk that the Company would be precluded from deducting the
interest on the Series ____% Debentures for United States federal income tax
purposes even if the Series ____% Debentures were distributed to the holders of
Preferred Securities and Common Securities in liquidation of such holder's
interest in AES Trust I as set forth in the Declaration of Trust or (ii) the
Regular Trustees shall have been informed by such tax counsel that a No
Recognition Opinion (as defined below) cannot be delivered to AES Trust I, the
Company shall have the right at any time, upon not less than 30 nor more than 60
days' notice, to redeem the Series ____% Debentures in whole or in part for cash
at the Optional Redemption Price within 90 days following the occurrence of such
Tax Event; provided, however, that, if at the time there is available to the
Company or the Regular Trustees on behalf of AES Trust I the opportunity to
eliminate, within such 90 day period, the Tax Event by taking some ministerial
action ("Ministerial Action"), such as filing a form or making an election, or
pursuing some other similar reasonable measure, which has no adverse effect on
AES Trust I, the Company or the holders of the Preferred Securities, the Company
or the Regular Trustees on behalf of AES Trust I will pursue such measure in
lieu of redemption and provided further that the Company shall have no right to
redeem the Series ____% Debentures while the Regular Trustees on behalf of AES
Trust I are pursuing any such Ministerial Action.
"Tax Event" means that the Company and the Regular Trustees shall have
obtained an opinion of nationally recognized independent tax counsel experienced
in such matters (a "Dissolution Tax Opinion") to the effect that on or after
_____________, 1997, as a result of (a) any amendment to, or change (including
any announced prospective change) in, the laws (or any regulations thereunder)
of the United States or any political subdivision or taxing authority thereof or
therein, (b) any amendment to, or change in, an interpretation or application of
any such laws or regulations by any legislative body, court, governmental agency
or regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination), (c) any
interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the theretofore generally accepted
position or (d) any action taken by any governmental agency or regulatory
authority, which amendment or change is enacted, promulgated, issued or
announced or which interpretation or pronouncement is issued or
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<PAGE> 34
announced or which action is taken, in each case on or after ______________,
1997, there is more than an insubstantial risk that (i) AES Trust I is, or will
be within 90 days of the date thereof, subject to United States federal income
tax with respect to income accrued or received on the Series ____% Debentures,
(ii) AES Trust I is, or will be within 90 days of the date thereof, subject to
more than a de minimis amount of taxes, duties or other governmental charges or
(iii) interest payable by the Company to AES Trust I on the Series ____%
Debentures is not, or within 90 days of the date thereof will not be, deductible
by the Company for United States federal income tax purposes.
"No Recognition Opinion" means an opinion of a nationally recognized
independent tax counsel experienced in such matters, which opinion may rely on
any then applicable published revenue ruling of the Internal Revenue Service, to
the effect that the holders of the Preferred Securities will not recognize any
gain or loss for United States federal income tax purposes as a result of a
dissolution of AES Trust I and distribution of the Series ____% Debentures as
provided in the Declaration of Trust.
If the Debentures are only partially redeemed by the Company pursuant to
an Optional Redemption or as a result of a Tax Event as described above, the
Debentures will be redeemed pro rata or by lot or in some other equitable manner
determined by the Trustee. Notwithstanding the foregoing, if a partial
redemption of the Series ____% Debentures would result in the delisting of the
Preferred Securities by any national securities exchange or other organization
on which the Preferred Securities are then listed, the Company shall not be
permitted to effect such partial redemption and will only redeem the Series
____% Debentures in whole.
In the event of redemption of this Debenture in part only, a new Debenture
or Debentures of this series for unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of this Debenture upon compliance by the Company with certain
conditions set forth therein.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture (and, in the case of any series of
Debentures held as trust assets of an AES Trust and with respect to which a
Security Exchange has not theretofore occurred, such consent of holders
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<PAGE> 35
of the Preferred Securities and the Common Securities of such AES Trust) as may
be required under the Declaration of Trust of such AES Trust to execute
supplemental indentures for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or of modifying in any manner the rights of the Holders
of the Debentures; provided, however, that no such supplemental indenture shall
(i) extend the fixed maturity of any Debentures of any series, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any premium payable upon the redemption thereof,
without the consent of the holder of each Debenture so affected or (ii) reduce
the aforesaid percentage of Debentures, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of each Debenture (and, in the case of any series of Debentures held as trust
assets of a AES Trust and with respect to which a Security Exchange has not
theretofore occurred, such consent of the holders of the Preferred Securities
and the Common Securities of such AES Trust as may be required under the
Declaration of Trust of such AES Trust) then outstanding and affected thereby.
The Indenture also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Debentures of a series at the time outstanding
affected thereby (subject, in the case of any series of Debentures held as trust
assets of a AES Trust and with respect to which a Securities Exchange has not
theretofore occurred, to such consent of holders of Preferred Securities and
Common Securities of such AES Trust as may be required under the Declaration of
Trust of such AES Trust), on behalf of the Holders of the Debentures of such
series, to waive any past default in the performance of any of the covenants
contained in the Indenture, or established pursuant to the Indenture with
respect to such series, and its consequences, except a default in the payment of
the principal of or premium, if any, or interest on any of the Debentures of
such series. Any such consent or waiver by the registered Holder of this
Debenture (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such Holder and upon all future Holders and owners of this
Debenture and of any Debenture issued in exchange herefor or in place hereof
(whether by registration of transfer or otherwise), irrespective of whether or
not any notation of such consent or waiver is made upon this Debenture.
Subject to Section 13.12 of the Indenture, no reference herein to the
Indenture (other than such Section) and no provision of this Debenture or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and premium, if any, and interest on
this Debenture at the time and place at the rate and in the money herein
prescribed.
So long as the Company is not in default in the payment of interest on the
Debentures, the Company shall have the right, at any time during the term of the
Debentures, from time to time to extend the interest payment period of such
Debentures for up to 20 consecutive quarterly interest periods (the "Extended
Interest Payment Period"), at the end of which period the Company shall pay all
interest then accrued and unpaid (together with interest thereon at the rate of
____% per annum to the extent
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<PAGE> 36
permitted by applicable law, compounded quarterly ("Compounded Interest"));
provided that no Extended Interest Payment Period may extend beyond the date of
maturity or any redemption date of the Debentures. During such Extended Interest
Payment Period the Company shall not declare or pay any dividend on, or redeem,
purchase, acquire or make a distribution or liquidation payment with respect to,
any of its common stock or preferred stock, or make any guarantee payments with
respect thereto, provided that the foregoing will not apply to any stock
dividends, paid by the Company in Common Stock. Prior to the termination of any
such Extended Interest Payment Period, the Company may pay all or any portion of
the interest accrued on the Debentures on any Interest Payment Date to holders
of record on the regular record date for such Interest Payment Date or from time
to time further extend such Extended Interest Payment Period, provided that such
Period together with all such further extensions thereof shall not exceed 20
consecutive quarterly interest periods. At the termination of any such Extended
Interest Payment Period and upon the payment of all accrued and unpaid interest
then due, together with Compounded Interest, the Company may select a new
Extended Interest Payment Period, subject to the foregoing requirements. No
interest on this Debenture shall be due and payable during an Extended Interest
Payment Period, except at the end thereof. At the end of the Extended Interest
Payment Period the Company shall pay all interest accrued and unpaid on the
Series ____% Debentures including any Compounded Interest which shall be payable
to the holders of the Series ____% Debentures in whose names the Series ____%
Debentures are registered in the Debenture register on the first record date
after the end of the Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations therein
set forth, this Debenture is transferable by the registered holder hereof on the
Debenture register of the Company, upon surrender of this Debenture for
registration of transfer at the office or agency of the Company in the Borough
of Manhattan, The City and State of New York accompanied by a written instrument
or instruments of transfer in form satisfactory to the Company or the Trustee
duly executed by the registered holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Debentures of authorized denominations
and for the same aggregate principal amount and series will be issued to the
designated transferee or transferees. No service charge will be made for any
such transfer, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Debenture,
the Company, the Trustee, any paying agent and any Debenture Registrar may deem
and treat the registered holder hereof as the absolute owner hereof (whether or
not this Debenture shall be overdue and notwithstanding any notice of ownership
or writing hereon made by anyone other than the Debenture Registrar) for the
purpose of receiving payment of or on account of the principal hereof and
premium, if any, and interest due hereon and for all other purposes, and neither
the Company nor the Trustee nor any paying agent nor any Debenture Registrar
shall be affected by any notice to the contrary.
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<PAGE> 37
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Holder of any Debenture has the right, exercisable at any time through
the close of business (New York time) on _______, 20__ (or, in the case of a
Debenture called for redemption, prior to the close of business on the Business
Day prior to the corresponding redemption date), to convert the principal amount
thereof (or any portion thereof that is an integral multiple of $__) into shares
of Common Stock at the initial conversion rate of ______ shares of Common Stock
for each Debenture (equivalent to a Conversion Price of $__ per share of Common
Stock), subject to adjustment under certain circumstances.
To convert a Debenture, a Holder must (a) complete and sign a conversion
notice substantially in the form attached hereto, (b) surrender the Debenture to
a Conversion Agent, (c) furnish appropriate endorsements or transfer documents
if required by the Conversion Agent and (d) pay any transfer or similar tax, if
required. If a Debenture is surrendered for conversion after the close of
business on any regular record date for payment of a Distribution and before the
opening of business on the corresponding Distribution payment date, then,
notwithstanding such conversion, the Distribution payable on such Distribution
payment date will be paid in cash to the person in whose name the Debenture is
registered at the close of business on such record date, and (other than a
Debenture or a portion of a Debenture called for redemption on a redemption date
occurring after such record date and on or prior to such Distribution payment
date) when so surrendered for conversion, the Debenture must be accompanied by
payment of an amount equal to the Distribution payable on such Distribution
payment date. The number of shares issuable upon conversion of a Debenture is
determined by dividing the principal amount of the Debenture converted by the
Conversion Price in effect on the Conversion Date. No fractional shares will be
issued upon conversion but a cash adjustment will be made for any fractional
interest. The outstanding principal amount of any Debenture shall be reduced by
the portion of the principal amount thereof converted into shares of Common
Stock.
[If certificated Debentures -- The Debentures of this series are issuable
only in registered form without coupons in denominations of $__ and any integral
multiple thereto.] [If Global Debenture -- This Global Debenture is exchangeable
for Debentures in definitive form under certain limited circumstances set forth
in the Indenture. Debentures of this series so issued are issuable only in
registered form without coupons in denominations of $__ or any integral multiple
thereof.] As provided in the Indenture and
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<PAGE> 38
subject to certain limitations [If Global Debenture -- herein and] therein set
forth, Debentures of this series [If Global Debenture -- so issued] are
exchangeable for a like aggregate principal amount of Debentures of this series
of a different authorized denomination, as requested by the Holder surrendering
the same.
All terms used in this Debenture which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
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[FORM OF ELECTION TO CONVERT]
ELECTION TO CONVERT
To: The AES Corporation
The undersigned owner of this Convertible Debenture hereby irrevocably
exercises the option to convert this Debenture, or the portion below designated,
into Common Stock of THE AES CORPORATION, in accordance with the terms of the
Indenture referred to in this Debenture, and directs that the shares issuable
and deliverable upon conversion, together with any check in payment for
fractional shares, be issued in the name of and delivered to the undersigned,
unless a different name has been indicated in the assignment below. If shares
are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto.
Date: _____________, ___
in whole Portions of Debenture to be converted ($__ or integral
multiples thereof):
$_____________
____________________________
Signature (for conversion only)
Please Print or Typewrite Name and Address, Including Zip
Code, and Social Security or Other Identifying Number
____________________________
____________________________
____________________________
Signature Guarantee:* _________
- ----------
* Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Conversion Agent, which requirements include
membership of participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities and Exchange Act of 1934, as
amended.
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<PAGE> 40
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Debenture to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints _______________ _________________________________
________________________________________________________________________________
___________________________________________________ agent to transfer this
Debenture on the books of the Trust. The agent may substitute another to act
for him or her.
Date:_______________________________________
Signature:__________________________________
(Sign exactly as your name appears on the other side of this Debenture)
Signature Guarantee*:_________________________________________________
- ----------
* Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Conversion Agent, which requirements include
membership of participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities and Exchange Act of 1934, as
amended.
40
<PAGE> 41
ARTICLE SEVEN
Original Issue of Series ____% Debentures
SECTION 7.01. Except as provided in Section 1.01 and this Section 7.01,
Series ____% Debentures in the aggregate principal amount equal to $____________
may, upon execution of this First Supplemental Indenture, be executed by the
Company and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and make available for delivery said Debentures to or
upon the written order of the Company, signed by its Chairman, its President, or
any Vice President and its Treasurer or an Assistant Treasurer, without any
further action by the Company. Upon exercise of the overallotment option set
forth in the Underwriting Agreement, additional Series ____% Debentures in the
aggregate principal amount of up to $______________ may be executed by the
Company and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and make available for delivery said Series ____%
Debentures executed as aforesaid by the Company, to or upon the written order of
the Company, which order shall be accompanied by evidence satisfactory to the
Trustee that the overallotment option has been exercised.
ARTICLE EIGHT
Miscellaneous Provisions
SECTION 8.01. Except as otherwise expressly provided in this First
Supplemental Indenture or in the form of Series ____% Debenture or otherwise
clearly required by the context hereof or thereof, all terms used herein or in
said form of Series ____% Debenture that are defined in the Indenture shall have
the several meanings respectively assigned to them thereby.
SECTION 8.02. The Indenture, as supplemented by this First Supplemental
Indenture, is in all respects ratified and confirmed. This First Supplemental
Indenture shall be deemed part of the Indenture in the manner and to the extent
herein and therein provided.
SECTION 8.03. The recitals herein contained are made by the Company and
not by the Trustee, and the Trustee assumes no responsibility for the
correctness thereof. The Trustee makes no representation as to the validity or
sufficiency of this First Supplemental Indenture.
SECTION 8.04. This First Supplemental Indenture may be executed in any
number of counterparts each of which shall be an original; but such counterparts
shall together constitute but one and the same instrument.
41
<PAGE> 42
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
The AES Corporation
By ____________________
Name:
Title:
Attest:
______________________
Name:
Title:
The First National Bank of Chicago
as Trustee
By ____________________
Name:
Title:
Attest:
______________________
Name:
Title:
42
<PAGE> 43
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK ) __________, 1997
On the ______ day of ________, in the year one thousand nine hundred
ninety-seven, before me personally came __________________ to me known, who,
being by me duly sworn, did depose and say that he resides at ________________
________________________________; that he is ___________________________ of THE
AES CORPORATION, one of the corporations described in and which executed the
above instrument; that he knows the corporate seal of said corporation; that the
seal affixed to the said instrument is such corporation seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
_______________________
NOTARY PUBLIC
My Commission Expires
43
<PAGE> 44
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK ) ____________, 1997
On the ______ day of __________, in the year one thousand nine hundred
ninety-seven before me personally came ______________________ to me known, who,
being by me duly sworn, did depose and say that he resides at
________________________ that he is a ____________ of The First National Bank of
Chicago , one of the corporations described in and which executed the above
instrument; that he knows the corporate seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation and that he signed his
name thereto by like authority.
_______________________
NOTARY PUBLIC
My Commission Expires
44
<PAGE> 1
EXHIBIT 4.4
-----------
================================================================================
THE AES CORPORATION
GUARANTEE AGREEMENT
------------------
Dated as of March __, 1997
------------------
================================================================================
<PAGE> 2
TABLE OF CONTENTS
---------------
PAGE
----
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.......................................2
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act; Application..................5
SECTION 2.02. Lists of Holders of Preferred Securities..........5
SECTION 2.03. Reports by the Guarantee Trust....................5
SECTION 2.04. Periodic Reports to Guarantee Trust...............5
SECTION 2.05. Evidence of Compliance with Conditions Precedent..5
SECTION 2.06. Events of Default; Waiver.........................6
SECTION 2.07. Disclosure of Information.........................6
SECTION 2.08. Conflicting Interest..............................6
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.01. Powers and Duties of the Guarantee Trustee........7
SECTION 3.02. Certain Rights and Duties of the Guarantee
Trustee ........................................8
SECTION 3.03. Not Responsible for Recitals or Issuance of
Guarantee .....................................10
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.01. Qualifications...................................10
SECTION 4.02. Appointment, Removal and Resignation of
Guarantee Trustee..............................11
ARTICLE 5
GUARANTEE
SECTION 5.01. Guarantee........................................12
SECTION 5.02. Waiver of Notice.................................12
SECTION 5.03. Obligations Not Affected.........................12
SECTION 5.04. Enforcement of Guarantee.........................13
SECTION 5.05. Guarantee of Payment.............................14
i
<PAGE> 3
PAGE
----
SECTION 5.06. Subrogation......................................14
SECTION 5.07. Independent Obligations..........................14
ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.01. Limitation of Transactions.......................14
SECTION 6.02. Subordination....................................15
ARTICLE 7
TERMINATION
SECTION 7.01. Termination......................................15
ARTICLE 8
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 8.01. Exculpation......................................16
SECTION 8.02. Indemnification..................................16
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Successors and Assigns...........................17
SECTION 9.02. Amendments.......................................17
SECTION 9.03. Notices..........................................17
SECTION 9.04. Genders..........................................18
SECTION 9.05. Benefit..........................................18
SECTION 9.06. Governing Law....................................18
SECTION 9.07. Counterparts.....................................18
SECTION 9.08. Exercise of Overallotment Option.................18
ii
<PAGE> 4
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of March __, 1997, is executed and
delivered by The AES Corporation, a Delaware corporation (the "Guarantor"), and
The First National Bank of Chicago, a national banking association, as the
initial Guarantee Trustee (as defined herein) for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of AES Trust I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of March __, 1997 among the trustees of the Issuer
named therein, The AES Corporation, as Sponsor, and the Holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
may issue up to _______________ aggregate liquidation amount of its $__ Term
Convertible Securities, Series A (the "Preferred Securities") representing
undivided beneficial interests in the assets of the Issuer and having the terms
set forth in Exhibit B to the Declaration, of which $200,000,000 liquidation
amount of Preferred Securities are being issued as of the date hereof. Up to the
remaining $30,000,000 liquidation amount of Preferred Securities may be issued
by the Issuer if and to the extent that the over-allotment option granted by the
Guarantor and the Issuer pursuant to the Underwriting Agreement (as defined in
the Declaration) is exercised by the Underwriters named in the Underwriting
Agreement.
WHEREAS, as incentive for the Holders to purchase Preferred Securities,
the Guarantor desires to irrevocably and unconditionally agree, to the extent
set forth herein, to pay to the Holders of the Preferred Securities the
Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by the initial purchasers
thereof of Preferred Securities, which purchase the Guarantor hereby agrees
shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders from time to time of the Preferred
Securities.
<PAGE> 5
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) Capitalized terms used in this Guarantee
Agreement but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.01;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections
are to Articles and Sections of this Guarantee Agreement unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Commission" means the Securities and Exchange Commission.
"Common Securities" means the securities representing undivided beneficial
interests in the assets of the Issuer, having the terms set forth in Exhibit C
to the Declaration.
"Common Stock" means the common stock of the Guarantor, par value $.01 per
share.
"Covered Person" means any Holder of Preferred Securities.
"Debentures" means the series of Junior Subordinated Debentures issued by
the Guarantor under the Indenture to the Property Trustee and entitled the
"_____% Junior Subordinated Convertible Debentures due 2027".
2
<PAGE> 6
"Distributions" means the periodic distributions and other payments
payable to Holders of Preferred Securities in accordance with the terms of the
Preferred Securities set forth in Exhibit B to the Declaration.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Guarantee Agreement.
"Guarantee Payments" shall mean the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions and the
redemption price, including all accrued and unpaid Distributions to the date of
redemption (the "Redemption Price"), with respect to the Preferred Securities
called for redemption by the Issuer but only if and to the extent that in each
case the Guarantor has made a payment to the Property Trustee of interest or
principal on the Debentures and (ii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in connection
with the distribution of Debentures to Holders or the redemption of all the
Preferred Securities upon the maturity or redemption of the Debentures as
provided in the Declaration), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid Distributions on the Preferred Securities to
the date of payment, to the extent the Issuer has funds available therefor, or
(b) the amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution").
"Guarantee Trustee" means The First National Bank of Chicago, a national
banking association, until a Successor Guarantee Trustee has been appointed and
accepted such appointment pursuant to the terms of this Guarantee Agreement and
thereafter means each such Successor Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any entity directly or indirectly controlling or
controlled by or under direct or indirect common control with the Guarantor.
"Indemnified Person" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, and any officers, directors, shareholders, members, partners,
employees, representatives or agents of the Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as of March __,
1997 between the Guarantor and The First National Bank of Chicago,
3
<PAGE> 7
as trustee, as supplemented by the First Supplemental Indenture thereto dated as
of March __, 1997, pursuant to which the Debentures are to be issued.
"Majority in liquidation amount of the Preferred Securities" means, except
as otherwise required by the Trust Indenture Act, Holder(s) of outstanding
Preferred Securities voting together as a single class, who are the record
owners of Preferred Securities whose liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) represents more than 50% of the liquidation amount of all
outstanding Preferred Securities.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities" has the meaning set forth in the first WHEREAS
clause above.
"Property Trustee" means the Person acting as Property Trustee under the
Declaration.
"Redemption Price" has the meaning set forth in the definition of
"Guarantee Payments".
"Responsible Officer" means, with respect to the Guarantee Trustee, the
chairman of the board of directors, the president, any vice-president, any
assistant vice-president, the secretary, any assistant secretary, the treasurer,
any assistant treasurer, any trust officer or assistant trust officer or any
other officer of the Guarantee Trustee customarily performing functions similar
to those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
4
<PAGE> 8
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as a Guarantee Trustee under Section
4.01(a).
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act; Application. (a) This Guarantee
Agreement is subject to the provisions of the Trust Indenture Act that are
required to be part of this Guarantee Agreement and shall, to the extent
applicable, be governed by such provisions;
(b) if and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by ss.ss. 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control; and
(c) the application of the Trust Indenture Act to this Guarantee Agreement
shall not affect the nature of the Preferred Securities as equity securities
representing undivided beneficial interests in the assets of the Issuer.
SECTION 2.02. Lists of Holders of Preferred Securities. (a) The Guarantor
shall provide the Guarantee Trustee with such information as is required under
ss. 312(a) of the Trust Indenture Act at the times and in the manner provided in
ss. 312(a); and
(b) the Guarantee Trustee shall comply with its obligations under ss.ss.
310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Guarantee Trust. Within 60 days after May 15
of each year, the Guarantee Trustee shall provide to the Holders of the
Preferred Securities such reports as are required by ss. 313 of the Trust
Indenture Act, if any, in the form, in the manner and at the times provided by
ss. 313 of the Trust Indenture Act. The Guarantee Trustee shall also comply with
the requirements of ss. 313(d) of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to Guarantee Trust. The Guarantor shall
provide to the Guarantee Trustee, the Commission and the Holders of the
Preferred Securities, as applicable, such documents, reports and information as
5
<PAGE> 9
required by ss. 314(a)(1)-(3) (if any) of the Trust Indenture Act and the
compliance certificates required by ss. 314(a)(4) and (c) of the Trust Indenture
Act, any such certificates to be provided in the form, in the manner and at the
times required by ss. 314(a)(4) and (c) of the Trust Indenture Act (provided
that any certificate to be provided pursuant to ss. 314(a)(4) of the Trust
Indenture Act shall be provided within 120 days of the end of each fiscal year
of the Issuer).
SECTION 2.05. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Guarantee Agreement
which relate to any of the matters set forth in ss. 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given pursuant to ss.
314(c) shall comply with ss. 314(e) of the Trust Indenture Act.
SECTION 2.06. Events of Default; Waiver. (a) Subject to Section 2.06(b),
Holders of Preferred Securities may by vote of at least a Majority in
liquidation amount of the Preferred Securities, (A) direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon by the Guarantee
Trustee or (B) on behalf of the Holders of all Preferred Securities waive any
past Event of Default and its consequences. Upon such waiver, any such default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
(b) The right of any Holder of Preferred Securities to receive payment of
the Guarantee Payments in accordance with this Guarantee Agreement, or to
institute suit for the enforcement of any such payment, shall not be impaired
without the consent of each such Holder.
SECTION 2.07. Disclosure of Information. The disclosure of information as
to the names and addresses of the Holders of the Preferred Securities in
accordance with ss. 312 of the Trust Indenture Act, regardless of the source
from which such information was derived, shall not be deemed to be a violation
of any existing law, or any law hereafter enacted which does not specifically
refer to ss. 312 of the Trust Indenture Act, nor shall the Guarantee Trustee be
held accountable by reason of mailing any material pursuant to a request made
under ss. 312(b) of the Trust Indenture Act.
SECTION 2.08. Conflicting Interest. The Declaration shall be deemed to be
specifically described in this Guarantee Agreement for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.
6
<PAGE> 10
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.01. Powers and Duties of the Guarantee Trustee. (a) This
Guarantee Agreement shall be held by the Guarantee Trustee in trust for the
benefit of the Holders of the Preferred Securities. The Guarantee Trustee shall
not transfer its right, title and interest in the Guarantee Agreement to any
Person except a Successor Guarantee Trustee on acceptance by such Successor
Guarantee Trustee of its appointment to act as Guarantee Trustee or to a Holder
of Preferred Securities exercising his or her rights pursuant to Section 5.04.
The right, title and interest of the Guarantee Trustee to the Guarantee
Agreement shall vest automatically in each Person who may hereafter be appointed
as Guarantee Trustee in accordance with Article 4. Such vesting and cessation of
title shall be effective whether or not conveyancing documents have been
executed and delivered.
(b) If an Event of Default occurs and is continuing, the Guarantee Trustee
shall enforce this Guarantee Agreement for the benefit of the Holders of the
Preferred Securities.
(c) This Guarantee Agreement and all moneys received by the Property
Trustee hereunder in respect of the Guarantee Payments will not be subject to
any right, charge, security interest, lien or claim of any kind in favor of, or
for the benefit of that Guarantee Trustee or its agents or their creditors.
(d) The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the holders
of the Preferred Securities, as their names and addresses appear upon the
register, notice of all Events of Default known to the Guarantee Trustee, unless
such defaults shall have been cured before the giving of such notice; provided,
that, the Guarantee Trustee shall be protected in withholding such notice if and
so long as the board of directors, the executive committee, or a trust committee
of directors and/or Responsible Officers, of the Guarantee Trustee in good faith
determine that the withholding of such notice is in the interests of the Holders
of the Preferred Securities. The Guarantee Trustee shall not be deemed to have
knowledge of any default except any default as to which the Guarantee Trustee
shall have received written notice or a Responsible Officer charged with the
administration of this Guarantee Agreement shall have obtained written notice.
7
<PAGE> 11
(e) The Guarantee Trustee shall not resign as a Trustee unless a Successor
Guarantee Trustee has been appointed and accepted that appointment in accordance
with Article 4.
SECTION 3.02. Certain Rights and Duties of the Guarantee Trustee. (a) The
Guarantee Trustee, before the occurrence of an Event of Default and after the
curing of all Events of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this Guarantee
Agreement, and no implied covenants shall be read into this Guarantee Agreement
against the Guarantee Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.06(a)), the Guarantee Trustee
shall exercise such of the rights and powers vested in it by this Guarantee
Agreement, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the curing or
waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are specifically
set forth in this Guarantee Agreement, and no implied covenants or
obligations shall be read into this Guarantee Agreement against the
Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to
the Guarantee Trustee and conforming to the requirements of this
Guarantee Agreement; but in the case of any such certificates or
opinions that by any provision hereof are specifically required to
be furnished to the Guarantee Trustee, the Guarantee Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Guarantee Trustee,
8
<PAGE> 12
unless it shall be proved that the Guarantee Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Guarantee Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of Preferred Securities as provided herein
relating to the time, method and place of conducting any proceeding for
any remedy available to the Guarantee Trustee, or exercising any trust or
power conferred upon the Guarantee Trustee under this Guarantee Agreement;
and
(iv) no provision of this Guarantee Agreement shall require the Guarantee
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall have reasonable
ground for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Guarantee Agreement or
adequate indemnity against such risk or liability is not reasonably
assured to it.
(c) Subject to the provisions of Section 3.02(a) and (b):
(i) whenever in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder,
the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and rely
upon a certificate, which shall comply with the provisions of ss. 314(e)
of the Trust Indenture Act, signed by any authorized officer of the
Guarantor;
(ii) the Guarantee Trustee (A) may consult with counsel (which may be
counsel to the Guarantor or any of its Affiliates and may include any of
its employees) selected by it in good faith and with due care and the
written advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon and in accordance with such advice and opinion and (B)
shall have the right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any court of competent
jurisdiction;
(iii) the Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Guarantee Trustee shall not be responsible for
9
<PAGE> 13
any misconduct or negligence on the part of any agent or attorney
appointed by it in good faith and with due care;
(iv) the Guarantee Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Guarantee Agreement at the
request or direction of any Holders of Preferred Securities, unless such
Holders shall have offered to the Guarantee Trustee reasonable security
and indemnity against the costs, expenses (including its attorneys' fees
and expenses) and liabilities that might be incurred by it in complying
with such request or direction; provided that nothing contained in this
clause (iv) shall relieve the Guarantee Trustee of the obligation, upon
the occurrence of an Event of Default (which has not been cured or waived)
to exercise such of the rights and powers vested in it by this Guarantee
Agreement, and to use the same degree of care and skill in this exercise,
as a prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs; and
(v) any action taken by the Guarantee Trustee or its agents hereunder
shall bind the Holders of the Preferred Securities and the signature of
the Guarantee Trustee or its agents alone shall be sufficient and
effective to perform any such action; and no third party shall be required
to inquire as to the authority of the Guarantee Trustee to so act, or as
to its compliance with any of the terms and provisions of this Guarantee
Agreement, both of which shall be conclusively evidenced by the Guarantee
Trustee's or its agent's taking such action.
SECTION 3.03. Not Responsible for Recitals or Issuance of Guarantee. The
recitals contained in this Guarantee shall be taken as the statements of the
Guarantor and the Guarantee Trustee does not assume any responsibility for their
correctness. The Guarantee Trustee makes no representations as to the validity
or sufficiency of this Guarantee Agreement.
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.01. Qualifications. (a) There shall at all times be a Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
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<PAGE> 14
(ii) be a corporation organized and doing business under the laws of the
United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least $50,000,000, and subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the supervising
or examining authority referred to above, then for the purposes of this
section 4.01(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
If at any time the Guarantee Trustee shall cease to satisfy the
requirements of clauses (i)-(ii) above, the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.02. If the
Guarantee Trustee has or shall acquire any "conflicting interest" within the
meaning of ss. 310(b) of the Trust Indenture Act, the Guarantee Trustee and the
Guarantor shall in all respects comply with the provisions of ss. 310(b) of the
Trust Indenture Act.
SECTION 4.02. Appointment, Removal and Resignation of Guarantee Trustee.
(a) Subject to Section 4.02(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor except following the
occurrence and during the continuation of an Event of Default.
(b) The Guarantee Trustee shall not be removed in accordance with Section
4.02(a) until a Successor Guarantee Trustee possessing the qualifications to act
as Guarantee Trustee under Section 4.01(a) has been appointed and has accepted
such appointment by written instrument executed by such Successor Guarantee
Trustee and delivered to the Guarantor and the Guarantee Trustee being removed.
(c) The Guarantee Trustee appointed to office shall hold office until his
successor shall have been appointed or until its removal or resignation.
(d) The Guarantee Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument (a "Resignation Request") in writing
signed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that no such resignation of the Guarantee
Trustee shall be effective until a Successor Guarantee Trustee possessing the
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qualifications to act as Guarantee Trustee under Section 4.01(a) has been
appointed and has accepted such appointment by instrument executed by such
Successor Guarantee Trustee and delivered to Guarantor and the resigning
Guarantee Trustee.
(e) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 delivery to the Guarantor
of a Resignation Request, the resigning Guarantee Trustee may petition any court
of competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon after such notice, if any, as it may deem proper and
prescribe, appoint a Successor Guarantee Trustee.
ARTICLE 5
GUARANTEE
SECTION 5.01. Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by the Issuer) regardless of any defense, right of
set-off or counterclaim which the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.02. Waiver of Notice. The Guarantor hereby waives notice of
acceptance of this Guarantee Agreement and of any liability to which it applies
or may apply, presentment, demand for payment, any right to require a proceeding
first against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.03. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Issuer;
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(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions (other than an extension of time for
payment of Distributions that results from the extension of any interest
payment period on the Debentures), Redemption Price, Liquidation
Distribution (as defined in the Declaration) or any other sums payable
under the terms of the Preferred Securities or the extension of time for
the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the
Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 5.03 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.04. Enforcement of Guarantee. The Guarantor and the Guarantee
Trustee expressly acknowledge that (i) this Guarantee Agreement will be
deposited with the Guarantee Trustee to be held for the benefit of the Holders;
(ii) the Guarantee Trustee has the right to enforce this Guarantee Agreement on
behalf of the Holders; (iii) Holders representing not less than a Majority in
liquidation amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available in
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respect of this Guarantee Agreement including the giving of directions to the
Guarantee Trustee, or exercising any trust or other power conferred upon the
Guarantee Trustee under this Guarantee Agreement, and (iv) notwithstanding the
foregoing, if the Guarantor has failed to make any Guarantee Payment hereunder,
any Holder of Preferred Securities may institute a legal proceeding directly
against the Guarantor to enforce its rights under this Guarantee Agreement,
without first instituting a legal proceeding against the Issuer, the Guarantee
Trustee, or any other Person.
SECTION 5.05. Guarantee of Payment. This Guarantee Agreement creates a
guarantee of payment and not merely of collection. This Guarantee Agreement will
not be discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Issuer).
SECTION 5.06. Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
the Holders by the Guarantor under this Guarantee Agreement; provided, however,
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any rights which it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.07. Independent Obligations. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Issuer with
respect to the Preferred Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03 hereof.
ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.01. Limitation of Transactions. So long as any Preferred
Securities remain outstanding, the Guarantor will not declare or pay dividends
on, or redeem, purchase, acquire or make a distribution or liquidation payment
with respect to, any of its common stock or preferred stock or make any
guarantee payment with respect thereto if at such time (i) the Guarantor shall
be in default
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with respect to its Guarantee Payments or other payment obligations hereunder,
(ii) there shall have occurred any event of default under the Declaration or
(iii) the Guarantor shall have given notice of its selection of an Extension
Period (as defined in the Indenture) and such period, or any extension thereof,
is continuing; provided that the foregoing will not apply to any stock dividends
paid by the Guarantor in Common Stock. In addition, so long as any Preferred
Securities remain outstanding, the Guarantor (i) will remain the sole direct or
indirect owner of all of the outstanding Common Securities and shall not cause
or permit the Common Securities to be transferred except to the extent such
transfer is permitted under Section 9.01 of the Declaration; provided that any
permitted successor of the Guarantor under the Indenture may succeed to the
Guarantor's ownership of the Common Securities and (ii) will use reasonable
efforts to cause the Issuer to continue to be treated as a grantor trust for
United States federal income tax purposes except in connection with a
distribution of Debentures as provided in the Declaration.
SECTION 6.02. Subordination. This Guarantee Agreement will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to all other liabilities of the Guarantor, including the
Debentures, except those made pari passu or subordinate by their terms and (ii)
pari passu in right of payment with the most senior preferred stock issued, from
time to time, if any, by the Guarantor and with respect to obligations under
other guarantee agreements which the Guarantor may enter into from time to time
to the extent that such agreements shall be entered into in substantially the
form hereof and provide for comparable guarantees by the Guarantor of payment on
preferred securities issued by other AES Trusts.
ARTICLE 7
TERMINATION
SECTION 7.01. Termination. This Guarantee Agreement shall terminate and be
of no further force and effect upon full payment of the Redemption Price of all
Preferred Securities, or upon the distribution of Debentures to Holders of
Preferred Securities and Common Securities in exchange for all of the Preferred
Securities and Common Securities, or upon full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this Guarantee Agreement will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder must restore payment
of any sums paid with respect to the Preferred Securities or this Guarantee
Agreement.
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ARTICLE 8
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 8.01. Exculpation. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Guarantee Agreement or by
law, except that an Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Preferred Securities might properly be paid.
SECTION 8.02. Indemnification. (a) To the fullest extent permitted by
applicable law, the Guarantor shall indemnify and hold harmless each Indemnified
Person from and against any loss, damage or claim incurred by such Indemnified
Person by reason of any act or omission performed or omitted by such Indemnified
Person in good faith and in a manner such Indemnified Person reasonably believed
to be within the scope of authority conferred on such Indemnified Person by this
Guarantee Agreement, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of negligence or willful misconduct with respect to such acts
or omissions.
(b) To the fullest extent permitted by applicable law, expenses (including
legal fees) incurred by an Indemnified Person in defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the
Guarantor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantor of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
8.02(a).
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ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Successors and Assigns. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assignees,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Preferred Securities then outstanding. Except in
connection with a consolidation, merger or sale involving the Guarantor that is
permitted under Article Ten of the Indenture, the Guarantor shall not assign its
obligations hereunder.
SECTION 9.02. Amendments. Except with respect to any changes which do not
adversely affect the rights of Holders (in which case no consent of Holders will
be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of not less than a Majority in liquidation amount of the
Preferred Securities. The provisions of Section 12.02 of the Declaration
concerning meetings of Holders shall apply to the giving of such approval.
SECTION 9.03. Notices. Any notice, request or other communication required
or permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied or mailed by first class mail as
follows:
(a) if given to the Guarantor, to the address set forth below or such
other address as the Guarantor may give notice of to the Holders:
The AES Corporation
1001 North 19th Street
Arlington, Virginia 22209
Facsimile No.: (703) 528-4510
Attention: General Counsel and Secretary
(b) if given to the Guarantee Trustee, to the address set forth below or
such other address as the Guarantee Trustee may give notice to the
Holders:
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Administration
Telecopy: (312) 407-1708
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(c) if given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Issuer.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.04. Genders. The masculine, feminine and neuter genders used
herein shall include the masculine, feminine and neuter genders.
SECTION 9.05. Benefit. This Guarantee Agreement is solely for the benefit
of the Holders and subject to Section 3.01(a) is not separately transferable
from the Preferred Securities.
SECTION 9.06. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).
SECTION 9.07. Counterparts. This Guarantee Agreement may be executed in
counterparts, each of which shall be an original; but such counterparts shall
together constitute one and the same instrument.
SECTION 9.08. Exercise of Overallotment Option. If and to the extent that
Preferred Securities are issued by the Issuer upon exercise of the overallotment
option referred to the second WHEREAS clause, the Guarantor agrees to give
prompt notice thereof to the Guarantee Trustee but the failure to give such
notice shall not relieve the Guarantor of any of its obligations hereunder.
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
The AES Corporation
By:_________________________________
Name:
Title:
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The First National Bank of Chicago
As Guarantee Trustee
By:_________________________________
Name:
Title:
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STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, on this day of March __, 1997,
personally appeared _______________ of The AES Corporation known to me (or
proved to me by introduction upon the oath of a person known to me) to be the
person and officer whose name is subscribed to the foregoing instrument, and
acknowledged to me that he/she executed the same as the act of such trust for
the purposes and consideration herein expressed and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL THIS ____ DAY OF MARCH 1997.
[SEAL]
_______________________________
NOTARY PUBLIC, STATE OF
NEW YORK
Print Name:____________________
Commission Expires:____________
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STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, on this day of March __, 1997,
personally appeared _______________ of The First National Bank of Chicago, known
to me (or proved to me by introduction upon the oath of a person known to me) to
be the person and officer whose name is subscribed to the foregoing instrument,
and acknowledged to me that he/she executed the same as the act of such trust
for the purposes and consideration herein expressed and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL THIS ____ DAY OF MARCH 1997.
[SEAL]
_______________________________
NOTARY PUBLIC, STATE OF
NEW YORK
Print Name:____________________
Commission Expires:____________
21
