As filed with the Securities and Exchange Commission on June 30, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C> <C>
The AES Corporation Delaware 54-1163725
AES Trust III Delaware 54-1840550
AES Trust IV Delaware 54-1872293
AES Trust V Delaware 54-1872355
(Exact name of Registrant as (State or other jurisdiction of (I.R.S. employer
specified in its charter) incorporation or organization) identification number)
1001 North 19th Street
Arlington, Virginia 22209
(703) 522-1315
(Address, including zip code, and telephone
number, including area code, of
Registrant's principal executive offices)
</TABLE>
Barry J. Sharp
1001 North 19th Street
Arlington, Virginia 22209
(703) 522-1315
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
Richard D. Truesdell, Jr.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
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Approximate date of commencement of proposed sale to the public: From
time to time after this Registration Statement becomes effective.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. |_|
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities being offered only in connection with dividend or
interest reinvestment plans, please check the following box. |X|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
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Title of Each Class of Proposed Maximum Aggregate
Securities to be Registered Offering Price (1)(2)(3) Amount of Registration Fee
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Senior Debt Securities, Senior Subordinated Debt Securities and
Junior Subordinated Debt Securities (collectively, "Debt
Securities") of The AES Corporation......................
Preferred Stock of The AES Corporation ("Preferred Stock")....
Depositary Shares related to Preferred Stock..................
Common Stock of The AES Corporation ("Common Stock")..........
Junior Subordinated Debt Securities of The AES Corporation for
issuance directly or to AES Trust III, AES Trust IV
and AES Trust V ("Junior Subordinated Debt Trust
Securities").............................................
Preferred Securities of AES Trust III, AES Trust IV, and AES
Trust V, severally ("Preferred Securities").............. $ 2,500,000,000 $ 695,000
Guarantees of Preferred Securities of AES Trust III, AES Trust
IV and AES Trust V by the AES Corporation(4).............
Stock Purchase Contracts to purchase Common Stock ("Stock
Purchase Contracts").....................................
Stock Purchase Units, each representing ownership of a Stock
Purchase Contract and Debt Securities or debt obligations of
third parties ("Stock Purchase Units")...................
Debt Securities Warrants, Preferred Stock Warrants and
Common Stock Warrants....................................
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</TABLE>
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(1) Such indeterminate number or amount of Debt Securities, Junior
Subordinated Debt Trust Securities, Preferred Stock, Depositary Shares
related to Preferred Stock, Common Stock, Stock Purchase Contracts,
Stock Purchase Units and Warrants of The AES Corporation and Preferred
Securities of AES Trust III, AES Trust IV and AES Trust V as may from
time to time be issued at indeterminate prices. Junior Subordinated Debt
Trust Securities may be issued and sold to AES Trust III, AES Trust IV
and AES Trust V, in which event such Junior Subordinated Debt Trust
Securities may later be distributed to the holders of Preferred
Securities upon a dissolution of AES Trust III, AES Trust IV and AES
Trust V and the distribution of the assets thereof.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) and exclusive of accrued interest and dividends,
if any. Calculated using the maximum aggregate offering price of such
indeterminate amount of Debt Securities that may be offered from time to
time at an offering price below their face value.
(3) The AES Corporation is also registering under this Registration Statement
all other obligations that it may have with respect to Preferred
Securities issued by AES Trust III, AES Trust IV or AES Trust V. No
separate consideration will be received for any Guarantee or any other
such obligations.
(4) Includes the rights of holders of the Preferred Securities of an AES
Trust under the Trust Preferred Securities Guarantee and back-up
undertakings, consisting of obligations by The AES Corporation to
provide certain indemnities in respect of, and pay and be responsible
for certain expenses, costs, liabilities, and debts of, as applicable,
AES Trust III, AES Trust IV, AES Trust V and such other obligations of
The AES Corporation set forth in the Amended and Restated Declaration of
Trust, the Junior Subordinated Debt Trust Securities Indenture and
Supplemental Indentures thereto, in each case as further described in
the Registration Statement. No separate consideration will be received
for any Guarantees or any back-up undertakings.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said section
8(a), may determine.
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<PAGE>
EXPLANATORY NOTE
This Registration Statement contains two forms of prospectuses to be used
in connection with offerings of the following securities:
(1) Debt Securities (consisting of Senior Debt Securities, Senior
Subordinated Debt Securities and Junior Subordinated Debt
Securities), Preferred Stock, Depositary Shares related to Preferred
Stock, Common Stock, Stock Purchase Contracts, Stock Purchase Units
and Warrants of The AES Corporation;
(2) Preferred Securities of AES Trust III, AES Trust IV or AES Trust V,
severally, Junior Subordinated Debt Trust Securities of The AES
Corporation and Guarantees by The AES Corporation of Preferred
Securities issued by AES Trust III, AES Trust IV or AES Trust V.
Each offering of securities made under this Registration Statement will
be made pursuant to one of these prospectuses, with the specific terms of the
securities offered thereby set forth in an accompanying prospectus supplement.
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION DATED JUNE 30, 1999
PROSPECTUS
$2,500,000,000
[LOGO]
The AES Corporation
Debt Securities
Preferred Stock
Depositary Shares
Common Stock
Stock Purchase Contracts
Stock Purchase Units
Warrants
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We will offer debt securities, preferred stock, depositary shares, common
stock, stock purchase contracts, stock purchase units or warrants from time to
time. Specific terms of these securities will be provided in supplements to
this prospectus. You should read this prospectus and any supplement carefully
before you invest.
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Our common stock trades on the New York Stock Exchange under the symbol
"AES".
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Investing in these securities involves certain risks. See "Risk Factors"
beginning on page 3.
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These securities have not been approved or disapproved by the Securities
and Exchange Commission or any state securities commission nor has the
Securities and Exchange Commission or any state securities commission
determined if this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
The date of this prospectus is June 30, 1999.
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<PAGE>
You should rely only on the information contained in or incorporated by
reference in this prospectus. We have not authorized anyone to provide you
with different information. We are not making an offer of these securities in
any state where the offer is not permitted. You should not assume that the
information contained in or incorporated by reference in this prospectus is
accurate as of any date other than the date on the front of this prospectus.
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TABLE OF CONTENTS
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Page
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About this Prospectus.........................................................2
Risk Factors..................................................................3
Where You Can Find More Information...........................................8
Incorporation of Documents by Reference.......................................9
Special Note on Forward-Looking Statements....................................9
Use of Proceeds...............................................................9
Ratio of Earnings to Fixed Charges...........................................10
The Company..................................................................10
Description of Capital Stock.................................................11
Description of Debt Securities...............................................16
Description of Stock Purchase Contracts and Stock Purchase Units.............25
Description of Securities Warrants...........................................26
Plan of Distribution.........................................................27
Legal Matters................................................................28
Experts......................................................................28
Part II....................................................................II-1
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission utilizing a "shelf" registration
process. Under this shelf process, we may sell any combination of the
securities described in this prospectus in one or more offerings up to a total
dollar amount of $2,500,000,000. This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities, we
will provide a prospectus supplement that will contain specific information
about the terms of that offering. The prospectus supplement may also add,
update or change information contained in this prospectus. You should read
both this prospectus and any prospectus supplement together with additional
information described under the heading WHERE YOU CAN FIND MORE INFORMATION.
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RISK FACTORS
Purchasers of the Securities should read this entire Prospectus
carefully. Ownership of the Securities involves certain risks. The following
factors should be considered carefully in evaluating AES and its business
before purchasing the Securities offered by this Prospectus.
Our high degree of leverage could affect our ability to fulfill our
obligations under our securities. We had approximately $6,800 million of
outstanding indebtedness at March 31, 1999. As a result, we might be
significantly limited in our ability to meet our debt service obligations, to
finance the acquisition and development of additional projects, to compete
effectively or to operate successfully under adverse economic conditions. As
of March 31, 1999, we had a consolidated ratio of total debt to total book
capitalization (including current debt) of approximately 74%.
Holders of our Debt Securities will be subordinated to many of our other
creditors. The Senior Subordinated Debt Securities will be subordinated to all
Senior Debt, including, but not limited to, the amounts outstanding under our
current $600 million revolving credit facility. The Junior Subordinated Debt
Securities will be subordinated to all Senior and Senior Subordinated Debt of
the Company, including, but not limited to, the amounts outstanding under our
current $600 million revolving credit facility. As of March 31, 1999, we had
approximately $617 million in aggregate principal amount of Senior Debt and
$1,686 million in aggregate principal amount of Senior and Senior Subordinated
Debt.
Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, receivership, reorganization, assignment
for the benefit of creditors, marshaling of assets and liabilities or any
bankruptcy, insolvency, or similar proceedings, the holders of Senior Debt
will be entitled to receive payment in full of all amounts due under all
Senior Debt before the holders of the Senior Subordinated Debt Securities will
be entitled to receive any payment in respect of the Senior Subordinated Debt
Securities; holders of Senior and Senior Subordinated Debt will be entitled to
receive payment in full of all amounts due under all Senior and Senior
Subordinated Debt before the holders of the Junior Subordinated Debt
Securities will be entitled to receive any payment in respect of the Junior
Subordinated Debt Securities.
No payments in respect of the Senior Subordinated Debt Securities or
Junior Subordinated Debt Securities may be made if
o a default has occurred and is continuing in a payment under the
Senior Debt or Senior and Senior Subordinated Debt, respectively, or
o during certain periods when an event of default under certain Senior
Debt or Senior and Senior Subordinated Debt, respectively,
permits the respective lenders thereunder to accelerate the maturity
thereof.
See "Description of Debt Securities -- Subordination of Senior
Subordinated Debt Securities" and "Description of Debt Securities --
Subordination of Junior Subordinated Debt Securities."
The Debt Securities will be effectively subordinated to the indebtedness
and other obligations (including trade payables) of our subsidiaries. At March
31, 1999, the indebtedness and obligations of our subsidiaries aggregated
approximately $5,213 million. Our ability to pay principal of, premium, if any,
and interest on the Debt Securities will be dependent upon the receipt of
funds from our subsidiaries by way of dividends, fees, interest, loans or
otherwise. Most of our subsidiaries with interests in power generation
facilities currently have in place, and the Indentures for the Debt Securities
will, except to the extent any prospectus supplement provides otherwise,
permit our subsidiaries to enter into, arrangements that restrict their
ability to make distributions to us by way of dividends, fees, interest, loans
or otherwise. Our subsidiaries are separate and distinct legal entities and
have no obligation, contingent or otherwise, to pay any amounts due pursuant
to the Debt Securities or to make any funds available therefor, whether by
dividends, loans or other payments, and do not guarantee the payment of
interest on or principal of the Debt Securities. Any right we have to receive
any assets of any of our subsidiaries upon any liquidation, dissolution,
winding up, receivership, reorganization, assignment for the benefit of
creditors, marshaling of assets and liabilities or any bankruptcy, insolvency
or similar proceedings (and the consequent right of the holders of the Debt
Securities to participate in the distribution of, or to realize proceeds from,
those assets) will be effectively subordinated to the claims of any such
subsidiary's
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creditors (including trade creditors and holders of debt issued by such
subsidiary).
We do a significant amount of our business outside the United States
which presents significant risks. Our involvement in the development of new
projects and the acquisition of existing plants in locations outside the
United States is increasing and most of our current development and
acquisition activities are for projects and plants outside the United States.
We have ownership interests in 104 power plants in operation or under
construction, 87 of these are outside of the United States.
The financing, development and operation of projects outside the United
States entail significant political and financial uncertainties (including,
without limitation, uncertainties associated with first-time privatization
efforts in the countries involved, currency exchange rate fluctuations,
currency repatriation restrictions, currency inconvertibility, political
instability, civil unrest, and expropriation) and other credit quality,
liquidity or structuring issues that have the potential to cause substantial
delays in respect of or material impairment of the value of the project being
developed or operated, which we may not be capable of fully insuring or
hedging against. The ability to obtain financing on a commercially acceptable
non-recourse basis in developing nations may also require us to make higher
investments than historically have been the case. In addition, financing in
countries with less than investment grade sovereign credit ratings may also
require substantial participation by multilateral financing agencies. There
can be no assurance that such financing can be obtained when needed.
The uncertainty of the legal environment in certain countries in which we
are or in the future may be developing, constructing or operating could make
it more difficult for us to enforce our respective rights under agreements
relating to such projects. In addition, the laws and regulations of certain
countries may limit our ability to hold a majority interest in some of the
projects that we may develop or acquire. International projects we own may, in
certain cases, be expropriated by applicable governments. Although we may have
legal recourse in enforcing our rights under agreements and recovering damages
for breaches thereof, there can be no assurance that any such legal
proceedings will be successful.
Global competition is increasing and could adversely affect us. The
global power production market is characterized by numerous strong and capable
competitors, many of whom may have extensive and diversified developmental or
operating experience (including both domestic and international experience)
and financial resources similar to or greater than ours. Further, in recent
years, the power production industry has been characterized by strong and
increasing competition with respect to both obtaining power sales agreements
and acquiring existing power generation assets. In certain markets, these
factors have caused reductions in prices contained in new power sales
agreements and, in many cases, have caused higher acquisition prices for
existing assets through competitive bidding practices. The evolution of
competitive electricity markets and the development of highly efficient
gas-fired power plants have also caused, or are anticipated to cause, price
pressure in certain power markets where we sell or intend to sell power. There
can be no assurance that the foregoing competitive factors will not have a
material adverse effect on us.
Development Uncertainties. The majority of the projects that we develop
are large and complex and the completion of any such project is subject to
substantial risks. Development can require us to expend significant sums for
preliminary engineering, permitting, legal and other expenses in preparation
for competitive bids which we may not win or before it can be determined
whether a project is feasible, economically attractive or capable of being
financed. Successful development and construction is contingent upon, among
other things, negotiation of satisfactory engineering, construction, fuel
supply and power sales contracts with other project participants, receipt of
required governmental permits and consents and timely implementation and
satisfactory completion of construction. There can be no assurance that we
will be able to obtain new power sales contracts, overcome local opposition,
if any, obtain the necessary site agreements, fuel supply and ash disposal
agreements, construction contracts, steam sales contracts, licenses and
certifications, environmental and other permits and financing commitments
necessary for the successful development of its projects. There can be no
assurance that development efforts on any particular project, or our efforts
generally, will be successful. If these development efforts are not
successful, we may abandon a project under
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development. At the time of abandonment, we would expense all capitalized
development costs incurred in connection therewith and could incur additional
losses associated with any related contingent liabilities. Our future growth
is dependent, in part, upon the demand for significant amounts of additional
electrical generating capacity and our ability to obtain contracts to supply
portions of this capacity. Any material unremedied delay in, or unsatisfactory
completion of, construction of our projects could, under certain
circumstances, have an adverse effect on our ability to meet our obligations,
including the payment of principal of, premium, if any, and interest on Debt
Securities. We may also be faced with certain development uncertainties
arising out of doing business outside of the United States. See "--We do a
significant amount of our business outside the United States which presents
significant risks."
Our acquisitions may not perform as expected. We have achieved a majority
of our growth through acquisitions and expect that we will continue to grow,
in part, through acquisitions. Although each of the acquired businesses had a
significant operating history at the time we acquired them, we have a limited
history of owning and operating many of these businesses. In addition, most of
these businesses were government owned and some were operated as part of a
larger integrated utility prior to their acquisition. There can be no
assurances that we will be successful in transitioning these to private
ownership, that such businesses will perform as expected or that the returns
from such businesses will support the indebtedness incurred to acquire them or
the capital expenditures needed to develop them.
We may not be able to raise sufficient capital to fund future acquisitions
and projects. Each of our projects under development and those independent
power facilities we may seek to acquire may require substantial capital
investment. Continued access to capital with acceptable terms is necessary to
assure the success of future projects and acquisitions. We have utilized
project financing loans to fund the capital expenditures associated with
constructing and acquiring our electric power plants and related assets to the
extent possible. Project financing borrowings have been substantially
non-recourse to our other subsidiaries and affiliates and to us as the parent
company and are generally secured by the capital stock, physical assets,
contracts and cash flow of the related project subsidiary or affiliate. We
intend to continue to seek, where possible, such non-recourse project
financing. However, depending on market conditions and the unique
characteristics of individual projects, such financing may not be available or
our traditional providers of project financing, particularly multinational
commercial banks, may seek higher borrowing spreads and increased equity
contributions.
Furthermore, because of the reluctance of commercial lending institutions
to provide non-recourse project financing (including financial guarantees) in
certain less developed economies, we have sought and will continue to
seek, in such locations, direct or indirect (through credit support or
guarantees) project financing from a limited number of multilateral or
bilateral international financial institutions or agencies. As a precondition
to making such project financing available, these institutions may also
require governmental guarantees of certain project and sovereign related
risks. Depending on the policies of specific governments, such guarantees may
not be offered and as a result, we may determine that sufficient financing
will ultimately not be available to fund the related project.
In addition to the project financing loans, if available, we provide a
portion, or in certain instances all, of the remaining long-term financing
required to fund development, construction, or acquisition. These investments
have generally taken the form of equity investments or loans, which are
subordinated to the project financing loans. The funds for these investments
have been provided by cash flows from operations and by the proceeds from
borrowings under our short-term credit facilities and issuances of senior
subordinated notes, convertible debentures and common stock.
Our ability to arrange for financing on either a fully recourse or a
substantially non-recourse basis and the costs of such capital are dependent
on numerous factors, including general economic and capital market conditions,
the availability of bank credit, investor confidence, the continued success of
current projects and provisions of tax and securities laws which are conducive
to raising capital in this manner. Should future access to capital not be
available, we may decide not to build new plants or acquire existing
facilities. While a decision not to build new plants or acquire existing
facilities would not affect the results of operations of our currently
operating facilities or facilities under construction, such a decision would
affect our future growth.
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Our performance is dependent to a large degree on certain of our larger
projects and their utility customers. The nature of most of our power
projects is such that each facility generally relies on one power sales
contract with a single customer for the majority, if not all, of its revenues
over the life of the power sales contract. The prolonged failure of any one
utility customer to fulfill its contractual obligations could have a
substantial negative impact on our primary source of revenues. We have sought
to reduce this risk in part by entering into power sales contracts with
utilities or other customers of strong credit quality and by locating its
plants in different geographic areas in order to mitigate the effects of
regional economic downturns.
We are subject to significant government regulation. Our cogeneration
operations in the United States are subject to the provisions of various laws
and regulations, including the Public Utility Regulatory Policies Act of 1978,
as amended ("PURPA") and the Public Utility Holding Company Act, as amended
("PUHCA"). PURPA provides to qualifying facilities ("QFs") certain exemptions
from substantial federal and state legislation, including regulation as public
utilities. PUHCA regulates public utility holding companies and their
subsidiaries. We are not and will not be subject to regulation as a holding
company under PUHCA as long as the domestic power plants we own are QFs under
PURPA. QF status is conditioned on meeting certain criteria, and would be
jeopardized, for example, by the loss of a steam customer. We believe that,
upon the occurrence of an event that would threaten the QF status of one of
our domestic plants, we would be able to react in a manner that would avoid
the loss of QF status (such as by replacing the steam customer). In the event
we were unable to avoid the loss of such status for one of our plants, to
avoid public utility holding company status, we could apply to the Federal
Energy Regulatory Commission ("FERC") to obtain status as an Exempt Wholesale
Generator ("EWG"), or could restructure the ownership of the project
subsidiary. EWGs, however, are subject to broader regulation by FERC and may
be subject to state public utility commissions regulation regarding non-rate
matters. In addition, any restructuring of a project subsidiary could result
in, among other things, a reduced financial interest in such subsidiary, which
could result in a gain or loss on the sale of the interest in such subsidiary,
the removal of such subsidiary from our consolidated income tax group or our
consolidated financial statements, or an increase or decrease in our results
of operations.
The United States Congress is considering proposed legislation which
would repeal PURPA entirely, or at least repeal the obligation of utilities to
purchase from QFs. There is strong support for grandfathering existing QF
contracts if such legislation is passed, and also support for requiring
utilities to conduct competitive bidding for new electric generation if the
PURPA purchase obligation is eliminated. Various bills have also proposed
repeal of PUHCA. Repeal of PUHCA would allow both independent power producers
and vertically integrated utilities to acquire retail utilities in the United
States that are geographically widespread, as opposed to the current
limitations of PUHCA which require that retail electric systems be capable of
physical integration. In addition, registered holding companies would be free
to acquire non-utility businesses, which they may not do now, with certain
limited exceptions. In the event of a PUHCA repeal, competition for
independent power generators from vertically integrated utilities would likely
increase. Repeal of PURPA and/or PUHCA may or may not be part of comprehensive
legislation to restructure the electric utility industry, allow retail
competition, and deregulate most electric rates. The effect of any such repeal
cannot be predicted, although any such repeal could have a material adverse
effect on us.
Pending electric utility industry restructuring proposals could have an
adverse effect on us. The FERC and many state utility commissions are
currently studying a number of proposals to restructure the electric utility
industry in the United States. Such restructuring would permit utility
customers to choose their utility supplier in a competitive electric energy
market. The FERC issued a final rule in April 1996 which requires utilities to
offer wholesale customers and suppliers open access on utility transmission
lines, on a comparable basis to the utilities' own use of the lines. The final
rule is subject to rehearing and may become the subject of court litigation.
Many utilities have already filed "open access" tariffs. The utilities contend
that they should recover from departing customers their fixed costs that will
be "stranded" by the ability of their wholesale customers (and perhaps
eventually, their retail customers) to choose new
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electric power suppliers. The FERC final rule endorses the recovery of
legitimate and verifiable "stranded costs." These may include the costs
utilities are required to pay under many QF contracts which the utilities view
as excessive when compared with current market prices. Many utilities are
therefore seeking ways to lower these contract prices or rescind the contracts
altogether, out of concern that their shareholders will be required to bear
all or part of such "stranded" costs. Some utilities have engaged in
litigation against QFs to achieve these ends.
In addition, future United States electric rates may be deregulated in a
restructured United States electric utility industry and increased competition
may result in lower rates and less profit for United States electricity
sellers. Falling electricity prices and uncertainty as to the future structure
of the industry is inhibiting United States utilities from entering into
long-term power purchase contracts. The effect on us of any such restructuring
cannot be predicted, although any such restructuring could have a material
adverse effect on us.
From time to time we are subject to material litigation and regulatory
proceedings. From time to time, we and our affiliates are parties to
litigation and regulatory proceedings. Investors should review the
descriptions of such matters contained in our Annual, Quarterly and Current
Reports filed with the Commission and incorporated by reference herein. There
can be no assurances that the outcome of such matters will not have a material
adverse effect on our consolidated financial position.
Our business is subject to stringent environmental regulations. Our
activities are subject to stringent environmental regulation by federal,
state, local and foreign governmental authorities. For example, the Clean Air
Act Amendments of 1990 impose more stringent standards than those previously
in effect, and require states to impose permit fees on certain emissions.
Congress and other foreign governmental authorities also may consider
proposals to restrict or tax certain emissions. These proposals, if adopted,
could impose additional costs on the operation of our power plants. There can
be no assurance that we would be able to recover all or any increased costs
from its customers or that its business, financial condition or results of
operations would not be materially and adversely affected by future changes in
domestic or foreign environmental laws and regulations. We have made and will
continue to make capital and other expenditures to comply with environmental
laws and regulations. There can be no assurance that such expenditures will
not have a material adverse effect on our financial condition or results of
operations.
Our directors and officers have significant ownership interests in us and
can exert significant influence or control over matters requiring stockholder
approval. As of February 2, 1999, our two founders, Roger W. Sant and Dennis W.
Bakke, and their immediate families together owned beneficially approximately
21.7% of our outstanding Common Stock. As a result of their ownership
interests, Messrs. Sant and Bakke may be able to significantly influence or
exert control over our affairs, including the election of our directors. As of
February 2, 1999, all of our officers and directors and their immediate families
together owned beneficially approximately 29.1% of our outstanding Common
Stock. To the extent that they decide to vote together, these stockholders
would be able to significantly influence or control the election of our
directors, our management and policies and any action requiring stockholder
approval, including significant corporate transactions.
Our adherence to our "shared principles" could have an adverse impact on
our results of operations. A core part of our corporate culture is a
commitment to "shared principles": to act with integrity, to be fair, to have
fun and to be socially responsible. We seek to adhere to these principles not
as a means to achieve economic success, but because adherence is a worthwhile
goal in and of itself. However, if we perceive a conflict between these
principles and profits, we will try to adhere to our principles -- even though
doing so might result in diminished or foregone opportunities or financial
benefits.
Shares Eligible for Future Sale. From time to time, our subsidiaries
incur indebtedness that is secured by a pledge of shares of our common stock
held by that subsidiary. The sale of a substantial number of such shares in
the public market upon any foreclosure or otherwise could have an adverse
effect on the market price of our common stock.
Risk of Fraudulent Transfer. Various fraudulent conveyance laws have been
enacted for the protection of creditors and may be applied by a court on behalf
of any unpaid creditor or a representative of our creditors in a lawsuit to
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subordinate or avoid Debt Securities in favor of our other existing or future
creditors. Under applicable provisions of the U.S. Bankruptcy code or
comparable provisions of state fraudulent transfer or conveyance laws, if we
at the time of issuance of Debt Securities , (i) incurred such indebtedness
with intent to hinder, delay or defraud any of our present or future creditors
or contemplated insolvency with a design to prefer one or more creditors to
the exclusion in whole or in part of others or (ii) received less than
reasonably equivalent value or fair consideration for issuing Debt Securities
and we (a) were insolvent, (b) was rendered insolvent by reason of the
issuance of the Debt Securities, (c) were engaged or about to engage in
business or a transaction for which our remaining assets constitute
unreasonably small capital to carry on our business or (d) intended to incur,
or believed that we would incur, debts beyond our ability to pay such debts as
they mature, then, in each case, a court of competent jurisdiction could void,
in whole or in part, the Debt Securities. Among other things, a legal
challenge of the Debt Securities on fraudulent conveyance grounds may focus on
the benefits, if any, realized by us as a result of our issuance of the Debt
Securities.
The measure of insolvency for purposes of the foregoing will vary
depending upon the law applied in such case. Generally, however, we would be
considered insolvent if the sum of our debts, including contingent
liabilities, were greater than all of our assets at fair valuation or if the
present fair market value of our assets were less than the amount that would
be required to pay the probable liability on our existing debts, including
contingent liabilities, as they become absolute and mature. There can be no
assurance that, after providing for all prior claims, there will be sufficient
assets to satisfy the claims of the holders of the Debt Securities.
Management believes that, for purposes of all such insolvency, bankruptcy
and fraudulent transfer or conveyance laws, the Debt Securities are being
incurred without the intent to hinder, delay or defraud creditors and for
proper purposes and in good faith, and that we after the issuance of the Debt
Securities will be solvent, will have sufficient capital for carrying on our
business and will be able to pay our debts as they mature. There can be no
assurance, however, that a court passing on such questions would agree with
management's view.
There is no prior public market for many of the securities that may be
offered pursuant to this prospectus -- as a result there could be significant
price volatility for such securities. Prior to the offering, there has been no
public market for many of the securities that may be offered pursuant to this
prospectus. There can be no assurance that an active trading market for any of
such securities will develop or be sustained. If such a market were to
develop, such securities could trade at prices that may be higher or lower
than their initial offering price depending upon many factors, including
prevailing interest rates, our operating results and the markets for similar
securities.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document that we file at
the public reference rooms of the SEC at 450 Fifth Street, N.W., Washington,
D.C. 20549; 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7
World Trade Center, Suite 1300, New York, New York 10048. You may obtain
information on the operation of the public reference rooms by calling the SEC
at 1-800-SEC-0330. The SEC also maintains an Internet site at
http://www.sec.gov, from where you can access our filings. Our Internet
address is http://www.aesc.com.
This prospectus constitutes part of a Registration Statement on Form S-3
filed with the Commission under the Securities Act of 1933 (the "Securities
Act"). It omits some of the information contained in the Registration
Statement, and reference is made to the Registration Statement for further
information on our company and the securities offered hereby. Any statement
contained in this prospectus concerning the provisions of any document filed
as an exhibit to the Registration Statement or otherwise filed with the
Commission is not necessarily complete, and in each instance reference is made
to the copy of the document filed.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings
made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until we sell all of the securities:
(a) Annual Report on Form 10-K for the year ended December 31, 1998;
(b) Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
(c) Current Reports on Form 8-K filed on March 18, 1999, April 12, 1999,
April 20, 1999, June 8, 1999 and June 11, 1999.
You may request a copy of these filings at no cost, by writing or
telephoning the office of William R. Luraschi, General Counsel and Secretary,
The AES Corporation, 1001 North 19th Street, Arlington, Virginia, telephone
number (703) 522-1315.
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements. We have based these
forward-looking statements on our current expectations and projections about
future events. These forward-looking statements are subject to risks,
uncertainties, and assumptions about AES, including, among other things:
o changes in company-wide operation and plan availability compared to
our historical performance; changes in our historical operating cost
structure, including changes in various costs and expenses;
o political and economic considerations in certain non-U.S. countries
where we are conducting or seeking to conduct business;
o restrictions on foreign currency convertibility and remittance
abroad, exchange rate fluctuations and developing legal systems;
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o regulation and restrictions;
o legislation intended to promote competition in U.S. and non-U.S.
electricity markets;
o tariffs;
o governmental approval processes;
o environmental matters;
o construction, operating and fuel risks;
o load growth, dispatch and transmission constraints;
o impact of the Year 2000 issue;
o conflict of interest of contacting parties; and
o adherence to our principles.
We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. In light of these risks, uncertainties and assumptions,
the forward-looking events discussed in this prospectus might not occur.
USE OF PROCEEDS
Unless otherwise indicated in a prospectus supplement, proceeds from the
sale of the securities will be used by the Company for general corporate
purposes and may be temporarily invested in short-term securities.
RATIO OF EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges is as follows:
Three
Months
Ended
Year Ended December 31, March 31,
-------------------------------- ---------
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ---------
Ratio of earnings to fixed charges. 2.10 2.20 1.88 1.46 1.65 1.61
For the purpose of computing the ratio of earnings to fixed charges,
earnings consist of income from continuing operations before income taxes and
minority interest, plus fixed charges, less capitalized interest, less excess
of earnings over dividends of less-than-fifty-percent-owned companies. Fixed
charges consist of interest (including capitalized interest) on all
indebtedness, amortization of debt discount and expense and that portion of
rental expense which we believe to be representative of an interest factor.
During the period from January 1, 1994 until March 31, 1999, no shares of
preferred stock were issued or outstanding, and during that period the Company
did not pay any preferred stock dividends.
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THE COMPANY
We help to meet the world's needs by supplying electricity to customers
in many countries in a socially responsible way.
We have been successful in growing our business and serving additional
customers by participating in competitive bidding under privatization
initiatives. We have been particularly interested in acquiring existing
businesses or assets in electricity markets that are promoting competition and
eliminating rate of return regulation. In such privatizations, sellers
generally seek to complete competitive solicitations in less than one year,
much quicker than the time periods associated with greenfield development, and
usually require payment in full on transfer. We believe that our experience in
competitive markets and our worldwide integrated group structure, with our
significant geographic coverage and presence, enable us to react quickly and
creatively in these situations. Since 1994, our total generating capacity in
megawatts or MW has grown from 2,479 MW to 24,076 MW at March 31, 1999 (an
increase of 871%), with the total number of plants in operation increasing
from 9 to 89. Additionally, our total revenues have increased at a compound
annual growth rate of 46% from $533 million in 1994 to $2,398 million in 1998,
while net income has increased at a compound annual growth rate of 33% from
$100 million to $311 million over the same period.
A majority of our sales of electricity are made to customers (generally
electric utilities or regional electric companies), on a wholesale basis for
further resale to end users. This is referred to as the electricity
"generation" business. Sales by these generation companies are usually made
under long-term contracts from power plants owned by our subsidiaries and
affiliates, although we do, in certain circumstances, make sales into regional
electricity markets without contracts. Our ownership portfolio of power
facilities includes new plants constructed for such purposes, so-called
greenfield plants, as well as existing power plants acquired through
competitively bid privatization initiatives and negotiated acquisitions. In
the electricity generation business, we now own and operate (entirely or in
part) a diverse portfolio of electric power plants (including those within
integrated distribution companies) with a total capacity of 24,076 MW. Of that
total, 29% are fueled by coal or petroleum coke, 24% are fueled by natural
gas, 33% are hydroelectric facilities, 6% are fueled by oil, and the remaining
8% are capable of using multiple fossil fuels.
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DESCRIPTION OF CAPITAL STOCK
Under our certificate of incorporation (the "Certificate of
Incorporation"), we are authorized to issue 500,000,000 shares of common
stock, par value $.01 per share, and 50,000,000 shares of preferred stock, no
par value.
The following summary contains a description of certain general terms of
the common stock and the preferred stock to which any prospectus supplement
may relate. Certain terms of any series of preferred stock offered by a
prospectus supplement will be described in the prospectus supplement relating
thereto. If indicated in the prospectus supplement, the terms of any series
may differ from the terms set forth below. The description of certain
provisions of the common stock and the preferred stock is subject to and
qualified by reference to the provisions of our certificate of incorporation,
and, in the case of the preferred stock, to the certificate of designation
(the "Certificate of Designation") relating to each particular series of
preferred stock which will be filed or incorporated by reference as an exhibit
to the registration statement of which this prospectus is a part.
Common Stock
As of April 30, 1999, there were 190,839,529 shares of common stock
outstanding.
The holders of common stock are entitled to one vote per share on all
matters to be voted upon by the stockholders. Subject to preferences that may
be applicable to any outstanding preferred stock, the holders of common stock
are entitled to receive ratably dividends as may be declared from time to time
by our board of directors out of funds legally available to pay dividends. If
we liquidate our business, the holders of common stock are entitled to share
ratably in all assets after we pay our liabilities and the liquidation
preference of any outstanding preferred stock. The common stock has no
preemptive or conversion rights or other subscription rights. There are no
redemption or sinking fund provisions applicable to the common stock. All
outstanding shares of common stock are fully paid and non-assessable, and any
shares of common stock in respect of which this prospectus is being delivered
will be fully paid and non-assessable.
The transfer agent for our common stock is EquiServe.
Price Range of AES Common Stock and Common Stock Dividends
Our common stock began trading on the New York Stock Exchange on October
16, 1996 under the symbol "AES." The following table sets forth for the
periods indicated the intra-day high and low sale prices for the common stock
as reported on the Composite Tape. In July 1997, we announced a two for one
stock split, in the form of a stock dividend, for holders of record on July
28, 1997 of our common stock, par value $.01 per share, which was paid on
August 28, 1997. The prices set forth below are adjusted for such stock split.
High Low
------ -----
1997
First Quarter ...................................... $34.13 $22.38
Second Quarter ..................................... 37.75 27.50
Third Quarter ...................................... 45.25 34.63
Fourth Quarter ..................................... 49.63 35.00
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High Low
------ -----
1998
First Quarter ...................................... $54.31 $39.38
Second Quarter ..................................... 58.00 45.63
Third Quarter ...................................... 55.38 23.00
Fourth Quarter ..................................... 47.38 32.00
1999
First Quarter ...................................... $49.25 $32.81
Second Quarter (through June 24, 1999) ............. $59.75 $36.75
No cash dividends have been paid on common stock since December 22, 1993
in order to provide capital for our equity investments in projects.
Our ability to declare and pay dividends is dependent, among other things,
on
o the ability of our project subsidiaries to declare and pay dividends
and otherwise distribute cash to us;
o our ability to service our parent company debt and
o our ability to meet certain criteria for paying dividends under our
corporate credit facility and under existing indentures of our debt
securities.
The ability of our subsidiaries to declare and pay dividends and
otherwise distribute cash to us is subject to certain limitations in the
project loans and other documents entered into by our project subsidiaries.
These limitations permit the payment of dividends out of current cash flow for
quarterly, semi-annual or annual periods only at the end of these periods and
only after payment of principal and interest on project loans due at the end
of these periods.
Cash dividend payments on common stock are limited to a certain
percentage of cash flow under our corporate credit agreement. The indentures
relating to our existing senior subordinated notes preclude the payment of
cash dividends if:
o at the time of a payment of cash dividends or after giving effect
thereto an event of default occurred;
o an event that would become an event of default occurred and is
continuing;
o certain fixed charge coverage ratios are not met or
o if the payment of dividends, together with other restricted payments,
would exceed certain limits.
Preferred Stock
As of April 30, 1999, there were no shares of Preferred Stock
outstanding.
Our board of directors has the authority to issue preferred stock in one
or more classes or series and to fix the rights, preferences, privileges and
restrictions thereof, including dividend rights, dividend rates, conversion
rights, exchange rights, voting rights, terms of redemption, redemption
prices, liquidation preferences and the number of shares constituting any
class or series or the designation of such class or series, without any
further action by the stockholders. Preferred stock, if issued, will not be
entitled to any preemptive or similar rights. The prospectus supplement will
describe the terms of any preferred stock being offered, including:
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o the specific designation, number of shares, seniority and purchase
price;
o any liquidation preference per share;
o any date of maturity;
o any redemption, repayment or sinking fund provisions;
o any dividend rate or rates and the dates on which any such dividends
will be payable (or the method by which such rates or dates will be
determined);
o any voting rights;
o if other than the currency of the United States, the currency or
currencies including composite currencies in which such preferred
stock is denominated and/or in which payments will or may be
payable;
o the method by which amounts in respect of such preferred stock may
be calculated and any commodities, currencies or indices, or value,
rate or price, relevant to such calculation;
o whether such preferred stock is convertible or exchangeable and, if
so, the securities or rights into which such preferred stock is
convertible or exchangeable, and the terms and conditions upon which
such conversions or exchanges will be effected including conversion
or exchange prices or rates, the conversion or exchange period and
any other related provisions;
o the place or places where dividends and other payments on the
preferred stock will be payable; and
o any additional voting, dividend, liquidation, redemption and other
rights, preferences, privileges, limitations and restrictions.
All shares of preferred stock offered hereby, or issuable upon
conversion, exchange or exercise of securities, will, when issued, be fully
paid and non-assessable. Any shares of preferred stock that are issued would
have priority over the common stock with respect to dividend or liquidation
rights or both.
The transfer agent for each series of preferred stock will be described
in the applicable prospectus supplement.
Description of Certain Provisions of Our Certificate of Incorporation and
By-Laws
Our Certificate of Incorporation and By-Laws contain several provisions
that may make the acquisition of control of the AES through a tender offer,
open market purchases, a proxy fight or otherwise more difficult. Below is a
description of certain of these provisions in the Certificate of Incorporation
and By-Laws.
Special Meetings of Stockholders. Our By-Laws provide that, unless
otherwise prescribed by law, special meetings of stockholders may be called by
a resolution adopted by a majority of the entire board of directors, by the
chairman of the board of directors or by the president. Only business as
specified in the notice of stockholders of the special meeting shall be
considered.
Stockholder Nomination of Directors. Our By-Laws contain a procedure for
stockholder nomination of directors. The By-Laws provide that any record owner
of stock entitled to be voted generally in the election of directors may
nominate one or more persons for election as a director at a stockholders
meeting only if written notice is given to our secretary of the intent to make
a nomination. The notice must be given, with respect to an annual meeting, not
later than 90 days in advance of the annual meeting. With respect to a special
meeting, the notice must be given not later than the close of business on the
seventh day following the earlier of
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o the date on which notice of such special meeting is first given to
stockholders and
o the date on which a public announcement of such meeting is first
made.
Each notice must include:
o the name and address of each stockholder who intends to appear in
person or by proxy to make the nomination and of the person or
persons to be nominated;
o a description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming
them) pursuant to which the nomination is to be made by the
stockholder;
o other information regarding each nominee proposed as would have been
included in a proxy statement filed pursuant to Rule 14a-8 under the
Exchange Act and
o the consent of each nominee to serve if elected.
The presiding officer of the meeting may refuse to acknowledge the
nomination of any person not made in compliance with this procedure.
The procedure for stockholder nomination of directors described above may
have the effect of precluding a nomination for election of directors at a
particular meeting if the required procedure is not followed.
Elimination of Liability; Indemnification. Except as described below, the
Certificate of Incorporation eliminates the liability of members of our board
of directors to us or our stockholders for monetary damages resulting from
breaches of their fiduciary duties as directors. Directors remain liable for
breaches of their duty of loyalty to us or our stockholders, as well as for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law and transactions from which a director derives
improper personal benefit. The Certificate of Incorporation also does not
release directors of liability under Section 174 of the Delaware General
Corporation Law (the "GCL"), which makes directors personally liable for
unlawful dividends or unlawful stock repurchases or redemptions if the
unlawful conduct is willful or results from negligence.
Under our By-Laws, and in accordance with Section 145 of the GCL, we
shall indemnify to the fullest extent permitted by the GCL any person who was
or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding. These include civil, criminal,
administrative or investigative proceedings by reason of the fact that the
person is or was a director or officer of or employed by us, or is or was
serving in that capacity or as an agent at the request of us for another
entity. Our indemnification covers expenses, judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with the defense
or settlement of an action, suit or proceeding if the person acted in good
faith and in a manner the person reasonably believed to be in or not opposed
to our best interests and, with respect to any criminal action or proceeding,
had no reasonable cause to believe was unlawful. We will indemnify persons in
a derivative action under the same conditions, except that no indemnification
is permitted without judicial approval if the person is adjudged to be liable
to us in the performance of his or her duty. Derivative actions are actions by
us or in the right of us to procure a judgment in our favor. Agents of ours
may be similarly indemnified at the discretion of the board of directors.
Under Section 145 of the GCL, a similar duty of care is applicable in the
case of derivative actions, except that indemnification only extends to
expenses incurred in connection with the defense or settlement of a derivative
action and then, where the person is adjudged to be liable to us, only if and
to the extent that the Court of Chancery of the State of Delaware or the court
in which the action was brought determines that the person is fairly and
reasonably entitled to the indemnity and only for those expenses as the court
deems proper.
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Pursuant to our By-Laws, a person eligible for indemnification may have
the expenses incurred in connection with any matter described above paid in
advance of a final disposition by us. However, these advances will only be
made if the indemnified person undertakes to repay all advanced amounts if it
is determined that the person is not entitled to indemnification.
In addition, under our By-Laws, we may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of
us or of another corporation against any liability arising out of the person's
status as director, officer, employee or agent of us whether or not we would
have the power to indemnify such person against such liability under the
provisions of our By-Laws. We maintain directors' and officers' insurance.
Depositary Shares
General. We may, at our option, elect to offer fractional shares of
preferred stock, rather than full shares of preferred stock. If we exercise
this option, we will issue to the public receipts for depositary shares, and
each of these depositary shares will represent a fraction (to be set forth in
the application prospectus supplement) of a share of a particular series of
preferred stock.
The shares of any series of preferred stock underlying the depositary
shares will be deposited under a deposit agreement between us and a bank or
trust company selected by us. The depositary will have its principal office in
the United States and a combined capital and surplus of at least $50,000,000.
Subject to the terms of the deposit agreement, each owner of a depositary
share will be entitled, in proportion, to the applicable fraction of a share
of preferred stock underlying that depositary share, to all the rights and
preferences of the preferred stock underlying that depositary share.
Those rights include dividend, voting, redemption and liquidation rights.
The depositary shares will be evidenced by depositary receipts issued
pursuant to the deposit agreement. Depositary receipts will be distributed to
those persons purchasing the fractional shares of preferred stock underlying
the depositary shares, in accordance with the terms of the offering. Copies of
the forms of deposit agreement and depositary receipt will be filed as
exhibits to the registration statement. The following summary of the deposit
agreement, the depositary shares and the depositary receipts is not complete.
You should refer to the forms of the deposit agreement and depositary receipts
that will be filed with the SEC in connection with the offering of the
specific depositary shares.
Pending the preparation of definitive engraved depositary receipts, the
depositary may, upon our written order, issue temporary depositary receipts
substantially identical to the definitive depositary receipts but not in
definitive form. These temporary depositary receipts entitle their holders to
all the rights of definitive depositary receipts which are to be prepared
without unreasonable delay. Temporary depositary receipts will then be
exchangeable for definitive depositary receipts at our expense.
Dividends and Other Distributions. The depositary will distribute all
cash dividends or other cash distributions received with respect to the
preferred stock to the record holders of depositary shares relating to the
preferred stock in proportion to the number of depositary shares owned by
those holders.
If there is a distribution other than in cash, the depositary will
distribute property received by it to the record holders of depositary shares
that are entitled to receive the distribution, unless the depositary
determines that it is not feasible to make the distribution. If this occurs,
the depositary may, with our approval, sell the property and distribute the
net proceeds from the sale to the applicable holders.
Redemption of Depositary Shares. If a series of preferred stock
represented by depositary shares is subject to redemption, the depositary
shares will be redeemed from the proceeds received by the depositary resulting
from the redemption, in whole or in part, of that series of preferred stock
held by the depositary. The redemption price per depositary share will be
equal to the applicable redemption fraction of the redemption price per share
payable with respect to that series of the preferred stock. Whenever we redeem
shares of preferred stock that are held by the
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depositary, the depositary will redeem, as of the same redemption date, the
number of depositary shares representing the shares of preferred stock so
redeemed. If fewer than all the depositary shares are to be redeemed, the
depositary shares to be redeemed will be selected by lot or pro rata as may be
determined by the depositary.
Voting the Preferred Stock. Upon receipt of notice of any meeting at
which the holders of the preferred stock are entitled to vote, the depositary
will mail the information contained in such notice to the record holders of
the depositary shares underlying the preferred stock. Each record holder of
the depositary shares on the record date (which will be the same date as the
record date for the preferred stock) will be entitled to instruct the
depositary as to the exercise of the voting rights pertaining to the amount of
the preferred stock represented by such holder's depositary shares. The
depositary will then try, as far as practicable, to vote the number of shares
of preferred stock underlying those depositary shares in accordance with such
instructions, and we will agree to take all actions which may be deemed
necessary by the depositary to enable the depositary to do so. The depositary
will not vote the shares of preferred stock to the extent it does not receive
specific instructions from the holders of depositary shares underlying the
preferred stock.
Amendment and Termination of the Depositary Agreement. The form of
depositary receipt evidencing the depositary shares and any provision of the
deposit agreement may at any time be amended by agreement between us and the
depositary. However, any amendment which materially and adversely alters the
rights of the holders of depositary shares will not be effective unless the
amendment has been approved by the holders of at least a majority of the
depositary shares then outstanding. The deposit agreement may be terminated by
us or by the depositary only if (a) all outstanding depositary shares have
been redeemed or (b) there has been a final distribution of the underlying
preferred stock in connection with our liquidation, dissolution or winding up
and the preferred stock has been distributed to the holders of depositary
receipts.
Charges of Depositary. We will pay all transfer and other taxes and
governmental charges arising solely from the existence of the depositary
arrangements. We will also pay charges of the depositary in connection with
the initial deposit of the preferred stock and any redemption of the preferred
stock. Holders of depositary receipts will pay other transfer and other taxes
and governmental charges and those other charges, including a fee for the
withdrawal of shares of preferred stock upon surrender of depositary receipts,
as are expressly provided in the deposit agreement to be for their accounts.
Miscellaneous. The depositary will forward to holders of depositary
receipts all reports and communications from us that we deliver to the
depositary and that we are required to furnish to the holders of the preferred
stock.
Neither we nor the depositary will be liable if either of us is prevented
or delayed by law or any circumstance beyond our control in performing our
respective obligations under the deposit agreement. Our obligations and those
of the depositary will be limited to performance in good faith of our
respective duties under the deposit agreement. Neither we nor the will be
obligated to prosecute or defend any legal proceeding in respect of any
depositary shares or preferred stock unless satisfactory indemnity is
furnished. We and the depositary may rely upon written advice of counsel or
accountants, or upon information provided by persons presenting preferred
stock for deposit, holders of depositary receipts or other persons believed to
be competent and on documents believed to be genuine.
Resignation and Removal of Depositary. The depositary may resign at any
time by delivering notice to us of its election to resign. We may remove the
depositary at any time. Any resignation or removal will take effect upon the
appointment of a successor depositary and its acceptance of the appointment.
The successor depositary must be appointed within 60 days after delivery of
the notice of resignation or removal and must be a bank or trust company
having its principal office in the United States and having a combined capital
and surplus of at least $50,000,000.
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DESCRIPTION OF DEBT SECURITIES
The debt securities may consist of Senior Debt Securities, Subordinated
Debt Securities or Junior Subordinated Debt Securities. The Senior Debt
Securities will be issued under an indenture (the "Senior Debt Indenture")
dated as of December 8, 1998 between AES, as issuer, and The First National
Bank of Chicago, as trustee. The Senior Subordinated Debt Securities will be
issued under an indenture (the "Senior Subordinated Debt Indenture") dated as
of July 1, 1996 between AES, as issuer, and The First National Bank of
Chicago, as trustee. The Junior Subordinated Debt Securities will be issued
under an indenture dated as of August 10, 1998 (the "Junior Subordinated Debt
Indenture") between AES, as issuer, and The First National Bank of Chicago, as
trustee. The Senior Debt Indenture, the Senior Subordinated Debt Indenture and
the Junior Subordinated Debt Indenture are collectively referred to herein as
the "Indentures."
The Indentures have been incorporated by reference or included herein as
exhibits to the registration statement of which this Prospectus is a part and
are also available for inspection at the office of the trustee. The Indentures
are subject to and governed by the Trust Indenture Act of 1939 (the "Trust
Indenture Act"). Section references contained herein are applicable to each of
the Indentures. The following summaries of the Indentures are not complete.
Where reference is made to particular provisions of the Indentures, these
provisions, including definitions of certain terms, are incorporated by
reference. The Indentures are substantially identical except for provisions
relating to subordination.
General
None of the Indentures limits the amount of debt securities which may be
issued thereunder. Each Indenture provides that debt securities issuable
thereunder may be issued up to the aggregate principal amount which may be
authorized by us from time to time. The prospectus supplement will describe
the terms of any debt securities being offered (the "Offered Debt Securities")
including:
o the designation, aggregate principal amount and authorized
denominations of the Offered Debt Securities;
o the date or dates on which the Offered Debt Securities of maturity;
o the rate or rates per annum at which the Offered Debt Securities
will bear interest and the method of calculating interest rates, if
any;
o the dates on which any interest will be payable and the record dates
for any interest payments;
o any mandatory or optional redemption terms or prepayment, conversion,
sinking fund or exchangeability provisions;
o the place where the principal of and interest on the Offered Debt
Securities will be payable;
o if other than denominations of $1,000 or multiples thereof, the
denominations in which the Offered Debt Securities will be issuable;
o whether the Offered Debt Securities will be issued in the form of
Global Securities (as defined below) or certificates;
o additional provisions, if any, relating to the defeasance of the
Offered Debt Securities;
o the currency or currencies, if other than the currency of the United
States, in which payment of the principal of and interest on the
Offered Debt Securities will be payable;
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o whether the Offered Debt Securities will be issuable in registered
form or bearer form ("Bearer Securities") or both and, if Bearer
Securities are issuable, any restrictions applicable to the exchange
of one form for another and the offer, sale and delivery of Bearer
Securities;
o any applicable United States federal income tax consequences,
including whether and under what circumstances the Company will pay
additional amounts on Offered Debt Securities held by a person who
is not a U.S. Person (as defined in each prospectus supplement
relating to any particular series of debt securities offered
thereby) in respect of any tax, assessment or governmental charge
withheld or deducted and, if so, whether we will have the option to
redeem these Offered Debt Securities rather than pay the additional
amounts;
o the dates on which premium, if any, will be payable;
o our right, if any, to defer payment of interest and the maximum
length of any deferral period;
o any listing on a securities exchange;
o the initial public offering price and
o other specific terms, including any additional events of default or
covenants provided for with respect to the Offered Debt Securities.
As described in each prospectus supplement relating to any particular
series of debt securities offered thereby, the indenture may contain covenants
limiting:
o the incurrence of debt by us;
o the incurrence of debt by subsidiaries of us;
o the making of certain payments by us and our subsidiaries;
o subsidiary mergers;
o business activities of us and our subsidiaries;
o the issuance of preferred stock of subsidiaries;
o asset dispositions;
o transactions with affiliates;
o liens and
o mergers and consolidations involving our company.
Book-entry Systems
If so specified in any prospectus supplement relating to debt securities,
debt securities of any series may be issued under a book-entry system in the
form of one or more global securities (each, a "Global Security"). Each Global
Security will be deposited with, or on behalf of, a depositary, which will be
The Depository Trust Company, New York, New York (the "Depositary"). The
Global Securities will be registered in the name of the Depositary or its
nominee.
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The Depositary has advised us that the Depositary is a limited purpose
trust company organized under the laws of the State of New York, a "banking
organization" within the meaning of the New York banking law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered pursuant to
the provisions of Section 17A of the Exchange Act. The Depositary was created
to hold securities of its participants and to facilitate the clearance and
settlement of securities transactions among its participants through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations, some of
which (and/or their representatives) own the Depositary. Access to the
Depositary's book-entry system is also available to others, such as banks,
brokers, dealers, and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.
When a Global Security is issued in registered form, the Depositary will
credit, on its book-entry registration and transfer system, the respective
principal amounts of the debt securities represented by each Global Security
to the participants' accounts. The accounts to be credited will be designated
by the underwriters, dealers, or agents, if any. If debt securities are
offered and sold directly by us, we will designate the accounts to be
credited. Ownership of beneficial interests in the Global Security will be
limited to participants or persons that may hold interests through
participants. Ownership of beneficial interests by participants in the Global
Security will be shown on, and the transfer of that ownership interest will be
effected only through, the participants' records. The laws of some
jurisdictions may require that certain purchasers of securities take physical
delivery of the securities in definitive form. These laws may impair the
ability to transfer beneficial interests in a Global Security.
So long as the Depositary or its nominee is the owner of record of a
Global Security, we consider the Depositary or its nominee the sole owner or
holder of the debt securities represented by the Global Security for all
purposes under the Indenture under which the debt securities are issued.
Except as set forth below, owners of beneficial interests in a Global Security
will not be entitled to have the debt security represented by the Global
Security registered in their names, and will not receive or be entitled to
receive physical delivery of the Debt Securities in definitive form and will
not be considered the owners or holders thereof under the Indenture under
which these debt securities are issued. Accordingly, each person owning a
beneficial interest in a Global Security must rely on the procedures of the
Depositary. Persons who are not participants must rely on the procedures of
the participant through which they own their interest. We understand that
under existing industry practices, if we request any action of holders or if
any owner of a beneficial interest in a Global Security desires to give or
take any action which a holder is entitled to give or take under the
applicable Indenture, the Depositary would authorize the participants holding
the relevant beneficial interests to give or take such action, and such
participants would authorize beneficial owners owning through such
participants to give or take such action or would otherwise act upon the
instruction of beneficial owners holding through them.
Payments of principal, premium, if any, and interest on debt securities
represented by a Global Security registered in the name of the Depositary or
its nominee will be made to the Depositary or nominee, as the registered
owner. None of AES, the trustee or any other agent of us or agent of the
trustee will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Global Security or for maintaining, supervising, or reviewing
any records relating to such beneficial ownership interests.
We have been advised by the Depositary that the Depositary will credit
participants' accounts with payments of principal, premium, if any, or
interest on the payment date thereof in amounts proportionate to their
respective beneficial interests in the principal amount of the Global Security
as shown on the records of the Depositary. We expect that payments by
participants to owners of beneficial interests in the Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers registered in "street name," and will be the responsibility of
such participants.
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A Global Security may not be transferred except as a whole:
o by the Depositary to a nominee or successor of the Depositary or
o by a nominee of the Depositary to another nominee of the Depositary.
A Global Security representing all but not part of an offering of debt
securities hereby is exchangeable for debt securities in definitive form of
like tenor and terms if:
o The Depositary notifies us that it is unwilling or unable to
continue as depositary for the Global Security or if at any time the
Depositary is no longer eligible to be in good standing as a
clearing agency registered under the Exchange Act, and we do not
appoint a successor depositary within 90 days after we receive
notice or become aware of the ineligibility or
o We in our sole discretion at any time determine not to have all of
the debt securities represented in an offering of Offered Debt
Securities by a Global Security and notify the trustee thereof.
A Global Security exchangeable pursuant to the preceding sentence shall
be exchangeable for debt securities registered in the names and in the
authorized denominations as the Depositary for the Global Security shall
direct. The debt securities of a series may also be issued in the form of one
or more bearer global debt securities (a "Bearer Global Security") that will
be deposited with a common depositary for Euro-clear and CEDEL, or with a
nominee for that depositary identified in the prospectus supplement relating
to the series. The specific terms and procedures, including the specific terms
of the depositary arrangement, with respect to any portion of a series of debt
securities to be represented by a Bearer Global Security will be described in
the prospectus supplement.
Senior Debt Securities
The payment of principal, premium, if any, and interest on the Senior
Debt Securities will, to the extent and in the manner set forth in the Senior
Debt Indenture, rank equally with all unsecured and unsubordinated debt.
Subordination of Senior Subordinated Debt Securities
The payment of principal, premium, if any, and interest on the Senior
Subordinated Debt Securities will, to the extent and in the manner set forth
in the Senior Subordinated Debt Indenture, be subordinated in right of payment
to the prior payment in full, in cash equivalents, of all Senior Debt.
Upon any payment or distribution of assets to our creditors upon any
liquidation, dissolution, winding up, receivership, reorganization, assignment
for the benefit of creditors, marshaling of assets and liabilities or any
bankruptcy, insolvency or similar proceedings, the holders of all Senior Debt
will first be entitled to receive payment in full of all amounts due or to
become due thereon before the holders of the Senior Subordinated Debt
Securities will be entitled to receive any payment in respect of the
principal, premium, if any, or interest on the Senior Subordinated Debt
Securities.
No payments of principal, premium, if any, or interest in respect of the
Senior Subordinated Debt Securities may be made by us if a default in any
payment with respect to Senior Debt has occurred and is continuing. In
addition, during the continuance of any other event of default (other than a
payment default) with respect to Designated Senior Debt pursuant to which the
maturity thereof may be accelerated, no payments of principal, premium, if
any, or interest in respect of the Senior Subordinated Debt Securities may be
made by us for a period (the "Payment Blockage Period") beginning on the date
of delivery of written notice of the holders and ending 179 days thereafter
(unless the Payment Blockage Period shall be terminated by written notice to
the trustee from the holders of Designated Senior Debt or from an agent of
these holders, or the 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 Senior Subordinated Debt Securities during any period of 360
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consecutive days. No event of default which existed or was continuing on the
date of the beginning of any Payment Blockage Period shall be the basis for
the beginning of any subsequent Payment Blockage Period by the holders of
Designated Senior Debt, unless such event of default shall have been cured or
waived for a period of not less than 90 days.
Due to this subordination, in the event of insolvency, funds that would
otherwise be payable to holders will be paid to the holders of Senior Debt to
the extent necessary to pay the Senior Debt in full, and we may be unable to
meet fully our obligations with respect to the Senior Subordinated Debt
Securities.
"Debt" is defined to mean, with respect to any person at any date of
determination (without duplication):
o all indebtedness for borrowed money;
o all obligations evidenced by bonds, debentures, notes or other
similar instruments;
o all obligations in respect of letters of credit or bankers'
acceptance or other similar instruments (or reimbursement
obligations with respect thereto);
o all obligations to pay the deferred purchase price of property or
services, except trade payables;
o all obligations as lessee under capitalized leases;
o all Debt of others secured by a lien on any asset of the person,
whether or not the Debt is assumed by that person; provided that,
for purposes of determining the amount of any Debt of the type
described in this clause, if recourse with respect to that Debt is
limited to that asset, the amount of that Debt shall be limited to
the lesser of the fair market value of the asset or the amount of
the Debt;
o all Debt of others guaranteed by that person to the extent that Debt
is guaranteed by such person;
o all redeemable stock valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid
dividends; and,
o to the extent not otherwise included in this definition, all
obligations under currency agreements and interest rate agreements.
"Designated Senior Debt" is defined to mean:
o Debt under the Credit Agreement dated as of August 2, 1996 (the
"Credit Agreement") among The AES Corporation, the banks named on
the signature pages thereof and the Morgan Guaranty Trust Company of
New York, as agent for the banks, as such Credit Agreement has been
and may be amended, restated, supplemented or otherwise modified
from time to time; and
o Debt constituting Senior Debt which, at the time of its determination
o has an aggregate principal amount of at least $30 million; and
o is specifically designated by us as "Designated Senior Debt."
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"Senior Debt" is defined to mean the principal of, premium, if any, and
interest on all of our Debt whether created, incurred or assumed before, on or
after the date of the Senior Subordinated Debt Indenture; provided that Senior
Debt shall not include:
o our 8.875% Senior Subordinated Debentures due 2027, 8.50% Senior
Subordinated Notes due 2007, 8.375% Senior Subordinated Notes Due
2007 and our 10.25% Senior Subordinated Notes due 2006 which rank
equally with the Senior Subordinated Debt Securities;
o our Debt to any affiliate;
o Debt of ours that, when incurred, and without respect to any election
under Section 1111(b) of Title 11, U.S. Code, was without recourse;
o any other Debt of ours which by the terms of the instrument creating
or evidencing the same are specifically designated as not being
senior in right of payment to the Senior Subordinated Debt
Securities; and
o our redeemable stock.
Subordination of Junior Subordinated Debt Securities
The payment of principal, premium, if any, and interest on the Junior
Subordinated Debt Securities will, to the extent and in the manner set forth
in the Junior Subordinated Debt Indenture, be subordinated in right of payment
to the prior payment in full, in cash or cash equivalents, of all our Senior
and Subordinated Debt.
Upon any payment or distribution of assets to our creditors upon any
liquidation, dissolution, winding up, receivership, reorganization, assignment
for the benefit of creditors, marshaling of assets and liabilities or any
bankruptcy, insolvency or similar proceedings, the holders of all Senior and
Subordinated Debt will first be entitled to receive payment in full of all
amounts due or to become due thereon before the holders of the Junior
Subordinated Debt Securities will be entitled to receive any payment in
respect of the principal, premium, if any, or interest on the Junior
Subordinated Debt Securities.
No payments of principal, premium, if any, or interest in respect of the
Junior Subordinated Debt Securities may be made by us if a default in any
payment with respect to Senior and Subordinated Debt has occurred and is
continuing. In addition, during the continuance of any other event of default
(other than a payment default) with respect to Designated Senior and
Subordinated Debt pursuant to which the maturity thereof may be accelerated,
no payments on account of principal, premium, if any, or interest may be made
by us during a Payment Blockage Period in respect of these Junior Subordinated
Debt Securities (unless the Payment Blockage Period is terminated by written
notice to the trustee from the holders of Designated Senior and Subordinated
Debt or from an agent of such holders, or the 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 Junior Subordinated Debt Securities during any
period of 360 consecutive days. No event of default which existed or was
continuing on the date of the beginning of any Payment Blockage Period with
respect to the Designated Senior and Subordinated Debt initiating the Payment
Blockage Period shall be the basis for the beginning 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.
Due to this subordination, in the event of insolvency, funds that would
otherwise be payable to holders of Junior Subordinated Debt Securities will be
paid to the holders of Senior and Subordinated Debt to the extent necessary to
pay the Debt in full, and we may be unable to meet fully our obligations with
respect to the Junior Subordinated Debt Securities.
"Designated Senior and Subordinated Debt" is defined to mean
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o Debt under the Credit Agreement; and
o Debt constituting Senior and Subordinated Debt which, at the time of
its determination
o has an aggregate principal amount of at least $30 million; and
o is specifically designated in the instrument as "Designated Senior
and Subordinated Debt" by us.
"Senior and Subordinated Debt" is defined to mean the principal, premium,
if any, and interest on all of our Debt whether created, incurred or assumed
before, on or after the date of the Junior Subordinated Debt Indenture;
provided that Senior and Subordinated Debt shall not include
o our Debt to any affiliate;
o Debt of ours that, when incurred and without respect to any election
under Section 1111(b) of Title 11, U.S. Code, was without recourse;
o any other Debt of ours which by the terms of the instrument creating
or evidencing the same are specifically designated as not being
senior in right of payment to the Junior Subordinated Debt
Securities, and in particular the Junior Subordinated Debt
Securities shall rank equally with all other debt securities and
guarantees issued to an AES Trust or any other trust, partnership or
other entity affiliated with us which is a financing vehicle of ours
in connection with an issuance of preferred securities by that
financing entity and
o our redeemable stock.
Events of Default
An Event of Default, as defined in the Indentures and applicable to debt
securities issued thereunder, will occur with respect to the debt securities
of any series issued under the Indentures if:
1. we default in paying principal or premium, if any, on any debt
security when due, upon acceleration, redemption, mandatory
repurchase, or otherwise;
2. we default in paying interest on any debt security when it becomes
due, and the default continues for a period of 30 days;
3. we default in performing or breach any other covenant or agreement
in the Indentures and the default or breach continues for a period
of 60 consecutive days after written notice by the trustee or by the
holders of 25% or more in aggregate principal amount of the debt
securities of all series issued under an Indenture;
4. a court having jurisdiction enters a decree or order for
o relief in respect of AES or any of our Material Subsidiaries in
an involuntary case under any applicable bankruptcy,
insolvency, or other similar law now or hereafter in effect;
o appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator, or similar official of AES or any of our
Material Subsidiaries or for all or substantially all of the
property and assets of AES or any of our Material Subsidiaries
or
o the winding up or liquidation of the affairs of the Company or
any of its Material Subsidiaries and, in each case, such decree
or order shall remain unstayed and in effect for a period of 60
consecutive days;
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5. AES or any of its Material Subsidiaries
o commences a voluntary case under any applicable bankruptcy,
insolvency, or other similar law now or hereafter in effect, or
consents to the entry of an order for relief in an involuntary
case under any such law,
o consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee,
sequestrator, or similar official of AES or any of its Material
Subsidiaries or for all or substantially all of the property
and assets of AES or any of its Material Subsidiaries or
o effects any general assignment for the benefit of creditors; or
6. any other Events of Default set forth in the applicable prospectus
supplement occur.
If an Event of Default (other than an Event of Default specified in
clause (4) or (5) with respect to AES) occurs with respect to the debt
securities of any series and continues, then the trustee or the holders of at
least 25% in principal amount of the outstanding debt securities may, by
written notice to us, and the trustee at the request of at least 25% in
principal amount of the outstanding debt securities will, declare the
principal, premium, if any, and accrued interest on the outstanding debt
securities to be immediately due and payable. Upon a declaration of
acceleration, the principal, premium, if any, and accrued interest shall be
immediately due and payable.
If an Event of Default specified in clause (4) or (5) above occurs with
respect to AES, the principal, premium, if any, and accrued interest on the
debt securities shall be immediately due and payable, subject to the prior
payment in full of all Senior Debt, without any declaration or other act on
the part of the trustee or any holder. The holders of at least a majority in
principal amount of the outstanding debt securities may, by written notice to
us and to the trustee, waive all past defaults with respect to debt securities
and rescind and annul a declaration of acceleration with respect to debt
securities of that series and its consequences if:
o all existing Events of Default applicable to debt securities of that
series, other than the nonpayment of the principal, premium, if any,
and interest on the debt securities that have become due solely by
that declaration of acceleration, have been cured or waived and
o the rescission would not conflict with any judgment or decree of a
court of competent jurisdiction.
For information as to the waiver of defaults, see "--Modification and
Waiver."
The holders of at least a majority in principal amount of the outstanding
debt securities may direct the time, method, and place of conducting any
proceeding for any remedy available to the trustee or exercising any trust or
power conferred on the trustee. However, the trustee may refuse to follow any
direction that conflicts with law or the applicable Indenture, that may
involve the trustee in personal liability, or that the trustee determines in
good faith may be unduly prejudicial to the rights of holders of debt
securities who did not join in giving that direction and the trustee may take
any other action it deems proper that is not inconsistent with the direction
received from holders of outstanding debt securities. A holder may not pursue
any remedy with respect to the applicable Indenture or the debt securities of
any series unless:
o the holder gives the trustee written notice of a continuing Event of
Default;
o the holders of at least 25% in principal amount of outstanding debt
securities make a written request to the trustee to pursue the
remedy;
o the holder or holders offer and, if requested, provide the trustee
indemnity satisfactory to the trustee against any costs, liability
or expense;
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o the trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity and
o with that 60-day period, the holders of at least a majority in
principal amount of the outstanding debt securities do not give the
trustee a direction that is inconsistent with the request.
However, these limitations do not apply to the right of any holder of a
debt security to receive payment of the principal, premium, if any, or
interest on, that debt security or to bring suit for the enforcement of any
payment, on or after the due date expressed in the debt securities, which
right shall not be impaired or affected without the consent of the holder.
Each of the Indentures requires that certain of our officers certify, on
or before a date not more than four months after the end of each fiscal year,
that to the best of those officers' knowledge, we have fulfilled all our
obligations under the Indenture. We are also obligated to notify the trustee
of any default or defaults in the performance of any covenants or agreements
under any of the Indentures.
"Material Subsidiary" of a Person is defined to mean, as of any date, any
Subsidiary that would constitute a "significant subsidiary" within the meaning
of Article 1 of Regulation S-X of the Securities Act of 1933.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which a majority of the capital stock
or other ownership interests having ordinary voting power to elect a majority
of the board of directors or other persons performing similar functions are at
the time directly or indirectly owned by such Person.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
Modification and Waiver
The Indentures may be amended or supplemented without the consent of any
holder of debt securities to:
o cure ambiguities, defects, or inconsistencies;
o comply with the terms in "Restriction on Mergers, Consolidations and
Sales of Assets" described below;
o comply with any requirements of the Commission in connection with
the qualification of the Indentures under the Trust Indenture Act of
1939;
o evidence and provide for the acceptance of appointment with respect
to the debt securities by a successor Trustee;
o establish the form or forms of debt securities of any series;
o provide for uncertificated debt securities and to make all
appropriate changes for such purpose; and
o make any change that does not adversely affect the rights of any
holder.
Other modifications and amendments of the Indentures may be made with the
consent of the holders of not less than a majority in principal amount of the
outstanding debt securities of each series affected by the amendment (all such
series voting together as a single class). However, no modification or
amendment may, without the consent of each holder affected:
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o change the stated maturity of the principal of, or any sinking fund
obligation or any installment of interest on, any debt security;
o reduce the principal amount, premium, if any, or interest on, any
debt security;
o reduce the above-stated percentage of outstanding debt securities,
the consent of whose holders is necessary to modify or amend that
Indenture with respect to the debt securities of any series issued
under that Indenture;
o reduce the percentage or principal amount of outstanding debt
securities, the consent of whose holders is necessary for waiver of
compliance with certain provisions of that Indenture or for waiver
of certain defaults.
A supplemental indenture which changes or eliminates any covenant or
other provision of an Indenture which has expressly been included solely for
the benefit of one or more particular series of debt securities issued under
an Indenture, or which modifies the rights of holders of debt securities of
that series with respect to that covenant or provision, shall be deemed not to
affect the rights under the applicable Indenture of the holders of debt
securities of any other series issued under the Indenture or of the coupons
appertaining to those debt securities. It is not necessary for the consent of
the holders under this section of an Indenture to approve the particular form
of any proposed amendment, supplement, or waiver, but it is sufficient if the
consent approves the substance thereof. After an amendment, supplement, or
waiver under this section of an Indenture becomes effective, we will give to
the holders affected thereby a notice briefly describing the amendment,
supplement, or waiver. We will mail supplemental indentures to holders upon
request. Any failure of us to mail a notice, or any defect therein, will not
affect the validity of any supplemental indenture or waiver.
Restriction on Mergers, Consolidations and Sales of Assets
Pursuant to the Indentures, we may not consolidate with, merge with or
into, or transfer all or substantially all of our assets to any Person unless:
o AES shall be the continuing Person, or, if AES is not the continuing
Person, the Person formed by such consolidation or into which we
merged or to which properties and assets of ours are transferred is
a solvent corporation organized and existing under the laws of the
United States or any State thereof or the District of Columbia and
expressly assumes in writing all the obligations of ours under the
Notes,
o immediately after giving effect to such transaction no Event of
Default has occurred and is continuing and
o other conditions as may be established in connection with the
issuance of the applicable Debt Securities are met.
Defeasance and Discharge
The Indentures provide that we are deemed to have paid and will be
discharged from all obligations in respect of the debt securities of any
series on the 123rd day after the deposit referred to below has been made, and
that the provisions of an Indenture will no longer be in effect with respect
to the debt securities issued thereunder (except for, among other matters,
certain obligations to register the transfer or exchange of the Debt
Securities of such series, to replace stolen, lost or mutilated Debt
Securities of such series, to maintain paying agencies and to hold monies for
payment in trust) if, among other things,
o we have deposited with the trustee, in trust, money and/or U.S.
Government Obligations that through the payment of interest and
principal in respect thereof, will provide money in an amount
sufficient to pay the principal, premium, if any, and accrued
interest on the applicable debt securities, on the due date thereof
or earlier redemption (irrevocably provided for under arrangements
satisfactory to the trustee), as the case may be, in accordance with
the terms of the Indenture and the applicable debt securities,
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o we have delivered to the trustee
o either
-- an opinion of counsel to the effect that holders will not
recognize income, gain or loss for federal income tax
purposes as a result of the exercise of our option under
this "Defeasance" provision 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 the
deposit, defeasance and discharge had not occurred, which
opinion of counsel must be based upon a ruling of the
Internal Revenue Service to the same effect unless there
has been a change in applicable federal income tax law or
related treasury regulations after the date of the
Indenture that a ruling is no longer required or
-- a ruling directed to the trustee received from the
Internal Revenue Service to the same effect as the
aforementioned opinion of counsel and
o an opinion of counsel to the effect that the creation of the
defeasance trust does not violate the Investment Company Act of
1940 and after the passage of 123 days following the deposit,
the trust fund will not be subject to the effect of Section 547
of the U.S. Bankruptcy Code or Section 15 of the New York
Debtor and Creditor Law,
o immediately after giving effect to that deposit on a pro forma
basis, no Event of Default has occurred and is continuing on the
date of the deposit or during the period ending on the 123rd day
after the date of the deposit, and the deposit will not result in a
breach or violation of, or constitute a default under, any other
agreement or instrument to which we are a party or by which we are
bound,
o we are not prohibited from making payments in respect of the
applicable debt securities by the subordination provisions contained
in an Indenture and
o if at that time the applicable debt securities are listed on a
national securities exchange, we have delivered to the trustee an
opinion of counsel to the effect that the debt securities will not
be delisted as a result of a deposit, defeasance and discharge.
As more fully described in the prospectus supplement, the Indentures also
provide for defeasance of certain covenants.
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DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
We may issue Stock Purchase Contracts, which represent contracts
obligating holders to purchase from us a specified number of shares of common
stock at a future date or dates. The price per share of common stock may be
fixed at the time the stock purchase contracts are issued or may be determined
by reference to a specific formula described in the stock purchase contracts.
The stock purchase contracts may be issued separately or as a part of units
("Stock Purchase Units") consisting of a stock purchase contract and debt
securities or debt obligations of third parties, including U.S. Treasury
securities, securing the holders' obligations to purchase the common stock
under the stock purchase contracts. The stock purchase contracts may require
us to make periodic payments to the holders of the stock purchase units or
vice versa, and these payments may be unsecured or prefunded on some basis.
The stock purchase contracts may require holders to secure their obligations
thereunder in a specified manner.
The prospectus supplement will describe the terms of any stock purchase
contracts or stock purchase units. The description in the prospectus
supplement will not be complete and will be qualified by reference to the
stock purchase contracts, and, if applicable, additional arrangements,
relating to the stock purchase contracts or stock purchase units.
DESCRIPTION OF SECURITIES WARRANTS
We may issue securities warrants for the purchase of debt securities,
preferred stock or common stock. Securities warrants may be issued
independently or together with debt securities, preferred stock or common
stock and may be attached to or separate from any offered securities. Each
series of securities warrants will be issued under a separate warrant
agreement to be entered into between us and a bank or trust company, as
warrant agent. The securities warrant agent will act solely as our agent in
connection with the securities warrants and will not assume any obligation or
relationship of agency or trust for or with any registered holders of
securities warrants or beneficial owners of securities warrants. This summary
of some provisions of the securities warrants is not complete. You should
refer to the securities warrant agreement, including the forms of securities
warrant certificate presenting the securities warrants, relating to the
specific securities warrants being offered for the complete terms of the
securities warrant agreement and the securities warrants. That securities
warrant agreement, together with the terms of securities warrant certificate
and securities warrants, will be filed with the SEC in connection with the
offering of the specific securities warrants.
The particular terms of any issue of securities warrants will be
described in the prospectus supplement relating to the issue. Those terms may
include:
o the designation, aggregate principal amount, currencies,
denominations and terms of the series of debt securities purchasable
upon exercise of securities warrants to purchase debt securities and
the price at which the debt securities may be purchased upon
exercise;
o the designation, number of shares, stated value and terms
(including, without limitation, liquidation, dividend, conversion
and voting rights) of the series of preferred stock purchasable upon
exercise of securities warrants to purchase shares of preferred
stock and the price at which such number of shares of preferred
stock of such series may be purchased upon such exercise;
o the number of shares of common stock purchasable upon the exercise
of securities warrants to purchase shares of common stock and the
price at which such number of shares of common stock may be
purchased upon such exercise;
o the date on which the right to exercise the securities warrants will
commence and the date on which the right will expire;
o United States Federal income tax consequences applicable to the
securities warrants; and
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o any other terms of the securities warrants.
Securities warrants for the purchase of preferred stock and common stock
will be offered and exercisable for U.S. dollars only. Securities warrants
will be issued in registered form only. The exercise price for securities
warrants will be subject to adjustment in accordance with the applicable
prospectus supplement.
Each securities warrant will entitle its holder to purchase the principal
amount of debt securities or the number of shares of preferred stock or common
stock at the exercise price set forth in, or calculable as set forth in, the
applicable prospectus supplement. The exercise price may be adjusted upon the
occurrence of certain events as set forth in the prospectus supplement. After
the close of business on the expiration date, unexercised securities warrants
will become void. We will specify the place or places where, and the manner in
which, securities warrants may be exercised in the applicable prospectus
supplement.
Prior to the exercise of any securities warrants to purchase debt
securities, preferred stock or common stock, holders of the securities
warrants will not have any of the rights of holders of the debt securities,
preferred stock or common stock purchasable upon exercise, including:
o in the case of securities warrants for the purchase of debt
securities, the right to receive payments of principal of, any
premium or interest on the debt securities purchasable upon exercise
or to enforce covenants in the applicable indenture; or
o in the case of securities warrants for the purchase of preferred
stock or common stock, the right to vote or to receive any payments
of dividends on the preferred stock or common stock purchasable upon
exercise.
PLAN OF DISTRIBUTION
We may sell the securities in any of three ways (or in any combination
thereof):
o through underwriters or dealers;
o directly to a limited number of purchasers or to a single purchaser;
or
o through agents.
The prospectus supplement will set forth the terms of the offering of such
securities, including
o the name or names of any underwriters, dealers or agents and the
respective amounts of securities underwritten or purchased by each of
them,
o the initial public offering price of the securities and the proceeds
to us and any discounts, commissions or other items constituting
compensation from us and any discounts, commissions or concessions
allowed or reallowed or paid to dealers and any securities exchanges
on which the securities may be listed.
Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
If underwriters are used in the sale of any securities, the securities
will be acquired by the underwriters for their own account and may be resold
from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The securities may be either offered to the public
through underwriting syndicates represented by managing underwriters, or
directly by underwriters. Unless
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otherwise described in the prospectus supplement, the obligations of the
underwriters to purchase the securities will be subject to certain conditions
and the underwriters will be obligated to purchase all of the securities if
any are purchased.
If a dealer is utilized in the sale of any offered securities, we will
sell those securities to the dealer, as principal. The dealer may then resell
the offered securities to the public at varying prices to be determined by the
dealer at the time of resale.
Offered Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer
or sale of Offered Securities in respect of which this Prospectus is delivered
will be named, and any commissions payable by the Company to such agent will
be set forth, in the Prospectus Supplement. Unless otherwise indicated in the
Prospectus Supplement, any such agent will be acting on a best efforts basis
for the period of its appointment.
We may authorize underwriters, dealers or agents to solicit offers by
certain purchasers to purchase the securities from us at the public offering
price set forth in the prospectus supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the
future. These contracts will be subject only to those conditions set forth in
the prospectus supplement, and the prospectus supplement will set forth the
commission payable for solicitation of such contracts.
Agents and underwriters may be entitled to indemnification by us against
certain civil liabilities, including liabilities under the Securities Act, or
to contribution with respect to payments which the agents or underwriters may
be required to make in respect thereof. Agents and underwriters may be
customers of, engage in transactions with, or perform services for the Company
in the ordinary course of business.
LEGAL MATTERS
The legality of the Securities offered hereby will be passed upon for the
Company by Davis Polk & Wardwell, New York, New York.
EXPERTS
The financial statements as of December 31, 1998 and 1997 and for each of
the three years in the period ended December 31, 1998, incorporated in this
prospectus by reference from The AES Corporation's Current Report on Form 8-K
dated March 18, 1999, and the related financial statement schedules
incorporated in this prospectus by reference from The AES Corporation's Annual
Report on Form 10-K for the year ended December 31, 1998, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports, which
are incorporated herein by reference, and have been so incorporated in
reliance upon the reports of such firm given upon their authority as experts in
accounting and auditing.
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===============================================================================
$2,500,000,000
THE AES CORPORATION
Debt Securities
Preferred Stock
Depositary Shares
Common Stock
Stock Purchase Contracts
Stock Purchase Units
Warrants
[LOGO]
-----------------------
PROSPECTUS
-----------------------
_______, 1999
===============================================================================
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION DATED JUNE 30, 1999
PROSPECTUS
$2,500,000,000
[LOGO]
The AES Corporation
Junior Subordinated Debt Trust Securities
AES Trust III
AES Trust IV
AES Trust V
-----------------------
We may offer unsecured junior subordinated trust debt securities from
time to time. Specific terms of these securities will be provided in
supplements to this prospectus.
AES Trust III, AES Trust IV and AES Trust V may offer preferred
securities representing individual beneficial interests in the assets of the
respective AES Trust. Specific terms of these preferred securities will be
provided in supplements to this prospectus.
You should read this prospectus and any supplement carefully before you
invest.
-----------------------
Our common stock trades on the New York Stock Exchange under the symbol
"AES".
-----------------------
Investing in these securities involves certain risks. See "Risk Factors"
beginning on page 5.
-----------------------
These securities have not been approved or disapproved by the Securities
and Exchange Commission or any state securities commission nor has the
Securities and Exchange Commission or any state securities commission
determined if this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
The date of this prospectus is June 30, 1999.
-----------------------
<PAGE>
You should rely only on the information contained in or incorporated by
reference in this prospectus. We have not authorized anyone to provide you
with different information. We are not making an offer of these securities in
any state where the offer is not permitted. You should not assume that the
information contained in or incorporated by reference in this prospectus is
accurate as of any date other than the date on the front of this prospectus.
-----------------------
TABLE OF CONTENTS
-----------------------
Page
----
About this Prospectus.........................................................2
Summary Information...........................................................3
Risk Factors..................................................................5
Where You Can Find More Information..........................................15
Incorporation of Documents by Reference......................................15
Special Note on Forward-Looking Statements...................................16
Use of Proceeds..............................................................16
Ratio of Earnings to Fixed Charges...........................................17
The Company..................................................................17
The AES Trusts...............................................................18
Description of Preferred Securities..........................................22
Description of Preferred Securities Guarantees...............................24
Description of the Junior Subordinated Debt Trust Securities ................27
Certain Covenants of AES Applicable to the Junior Subordinated Debt Trust
Securities.............................29
Plan of Distribution.........................................................34
Legal Matters................................................................35
Experts......................................................................35
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission utilizing a "shelf" registration
process. Under this shelf process, we may sell any combination of the
securities described in this prospectus in one or more offerings up to a total
dollar amount of $2,500,000,000. This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities, we
will provide a prospectus supplement that will contain specific information
about the terms of that offering. The prospectus supplement may also add,
update or change information contained in this prospectus. You should read
both this prospectus and any prospectus supplement together with additional
information described under the heading WHERE YOU CAN FIND MORE INFORMATION.
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<PAGE>
SUMMARY INFORMATION
Questions and Answers
This summary provides a brief overview of the key aspects of the
preferred securities. You should carefully read this prospectus to understand
fully the terms of the preferred securities as well as the tax and other
considerations that are important to you in making a decision about whether to
invest in the preferred securities. You should pay special attention to the
"Risk Factors" section beginning on page 5 of this prospectus to determine
whether an investment in the preferred securities is appropriate for you.
What are the preferred securities?
Each preferred security represents an undivided beneficial interest in
the assets of the applicable AES Trust. Each preferred security will entitle
the holder to receive cash distributions as described in the aplicable
prospectus supplement.
Who are AES Trusts?
The AES Trusts are Delaware business trusts. Their principal place of
business is c/o the AES Corporation, 1001 North 19th Street, Arlington,
Virginia 22209, and its telephone number is (703) 522-1315. All of the common
securities of the AES Trusts will be owned by the AES Corporation. The AES
Trusts will use the proceeds from the sale of the preferred securities and the
common securities to buy a series of junior subordinated deferrable interest
debentures from AES with the same financial terms as the preferred securities.
Who is the AES Corporation?
We are a global power company, with 104 power plants in operation or under
construction, 87 of which are located outside of the United States. The
mailing address of our principal executive office is 1001 North 19th Street,
Arlington, Virginia 22209 and our telephone number is (703) 522-1315. Our
Internet address is http://www.aesc.com.
When will you receive distributions on the preferred securities?
The AES Trusts' only source of cash to make payments on the preferred
securities are payments on the junior subordinated debt trust securities it
purchases from AES. If you purchase the preferred securities, you are entitled
to receive cumulative cash distributions at an annual rate which will be set
forth in the applicable prospectus supplement. Distributions will accumulate
from the date the AES Trusts issue the preferred securities and will be paid in
arrears.
When will payment of your distributions be deferred?
If AES defers interest payments on the junior subordinated debt trust
securities, the AES Trust generally will defer distributions on the preferred
securities as described in the applicable prospectus supplement. During any
deferral period, with certain exceptions, AES will not be permitted to:
o pay a dividend or make any distributions on its capital stock or
redeem, purchase, acquire or make a liquidation payment on any of
its capital stock, or make any guarantee payments relating to the
foregoing; or
o make an interest, principal or premium payment on, or repurchase or
redeem, any of its debt securities that rank equal with or junior to
the junior subordinated debt trust securities.
When can the AES Trusts redeem the preferred securities?
The AES Trusts must redeem all of the outstanding trust securities on a
date that will be specified in the applicable prospectus supplement. Some or
all of the preferred securities may be redeemed on further dates which will
also be specifed in the applicable prospectus supplement. Also, the preferred
securities may be redeemed, in whole or in part, at any time if certain changes
in tax, investment company or bank regulatory law occur and certain other
conditions are satisfied. See
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"Description of the Preferred Securities" on page 22.
What is AES' guarantee of the preferred securities?
AES' guarantee of the preferred securities consists of:
o its obligations to make payments on the junior subordinated debt
trust securities;
o its obligations under the preferred trust securities guarantee; and
o its obligations under the amended and restated declarations of trust
of the AES Trusts, which sets forth the terms of the AES Trusts. AES
has irrevocably guaranteed that if a payment on the junior
subordinated debt trust securities is made to the AES Trusts but,
for any reason, the AES Trusts do not make the corresponding
distribution or redemption payment to the holders of the preferred
securities, then AES will make the payments directly to the holders
of the preferred securities. The guarantee does not cover payments
when the AES Trusts do not have sufficient funds to make payments on
the preferred securities. AES' obligations under the guarantee are
subordinated as described on page 26.
When could the junior subordinated trust securities be distributed to you?
AES has the right to dissolve the AES Trusts at any time. If AES
terminates the AES Trusts, the AES Trusts will redeem the preferred securities
by distributing the junior subordinated debt securities to holders of the
preferred securities and the common securities on a ratable basis. If the
junior subordinated debt trust securities are distributed, AES will use it
best efforts to list the junior subordinated debt trust securities on any
exchange on which the preferred securities are then listed.
Will the preferred securities be listed on a stock exchange?
Application will be made to list the preferred securities on the NYSE, or
if AES common stock is not then listed on the NYSE, on such other exchange on
which the AES common stock is then listed. If approved for listing, the AES
Trusts expect the preferred securities will begin trading within 30 days after
they are first issued.
Will holders of the preferred securities have any voting rights?
Generally, the holders of the preferred securities will not have any
voting rights. See "Description of the Preferred Securities."
In what form will the preferred securities be issued?
The preferred securities will be represented by one or more global
securities that will be deposited with and registered in the name of The
Depository Trust Company or its nominee. This means that you will not receive
a certificate for your preferred securities and that your broker will maintain
your position in the preferred securities.
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RISK FACTORS
Purchasers of the securities should read this entire prospectus
carefully. Ownership of the securities involves certain risks. The following
factors and the other information in this prospectus should be considered
carefully in evaluating AES and our business before purchasing the securities
offered by this prospectus.
Our high degree of leverage could affect our ability to fulfill our
obligations under our securities. We had approximately $6,800 million of
outstanding indebtedness at March 31, 1999. As a result, we might be
significantly limited in our ability to meet our debt service obligations, to
finance the acquisition and development of additional projects, to compete
effectively or to operate successfully under adverse economic conditions. As
of March 31, 1999, we had a consolidated ratio of total debt to total book
capitalization (including current debt) of approximately 74%.
We are not required to pay you under the guarantee and the junior
subordinated debt trust securities unless we first make other required
payments. Our obligations under the junior subordinated debt trust securities
will rank junior to all of our senior and senior subordinated indebtedness,
including, but not limited to, the amounts outstanding under our current $600
million revolving credit facility. As of March 31, 1999, we had approximately
$617 million in aggregate principal amount of senior debt and $1,686 million in
aggregate principal amount of senior and senior subordinated debt. This means
that we cannot make any payments on the junior subordinated debt trust
securities if we default on a payment of senior indebtedness or senior
subordinated indebtedness and do not cure the default within the applicable
grace period or if the senior indebtedness or senior subordinated indebtedness
becomes immediately due because of a default and has not yet been paid in
full. In addition, our obligations under the junior subordinated debt trust
securities will be effectively subordinated to all existing and future
liabilities of our subsidiaries.
Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, receivership, reorganization, assignment
for the benefit of creditors, marshaling of assets and liabilities or any
bankruptcy, insolvency, or similar proceedings, the holders of senior and senior
subordinated debt will be entitled to receive payment in full of all amounts
due under all senior and senior subordinated debt before the holders of the
junior subordinated debt trust securities will be entitled to receive any
payment on the junior subordinated debt trust securities.
No payments in respect of the junior subordinated debt trust securities
may be made if
o a default has occurred and is continuing in a payment under the
senior and senior subordinated debt or
o during certain periods when an event of default under certain senior
and senior subordinated debt, respectively, permits the
respective lenders thereunder to accelerate the maturity thereof.
The preferred securities will rank
o subordinate and junior in right of payment to all our other
liabilities, including the junior subordinated debt trust
securities, except those made pari passu by their terms and
o senior to all capital stock now or hereafter issued by us and to any
guarantee now or hereafter entered into by us in respect of any of
our capital stock.
See "Description of the Preferred Securities Guarantees--Status of the
Preferred Securities Guarantees."
The junior subordinated debt trust securities will be effectively
subordinated to the indebtedness and other obligations (including trade
payables) of our subsidiaries. At March 31, 1999, the indebtedness and
obligations of our subsidiaries aggregated approximately $5,213 million. Our
ability to pay principal of, premium, if any, and interest on the junior
subordinated debt trust securities will be dependent upon the receipt of funds
from our subsidiaries by way of dividends, fees, interest, loans or otherwise.
There are no terms in the junior subordinated debt trust securities, the
preferred securities or the preferred securities guarantee that limit our or
our subsidiaries' ability to incur additional indebtedness. Most of our
subsidiaries with interests in power generation facilities currently have in
place arrangements that restrict their ability to make distributions to us by
way of dividends, fees, interest, loans or otherwise. Our subsidiaries are
separate and distinct legal entities and have no obligation, contingent or
otherwise, to pay any amounts due pursuant to the junior subordinated debt
trust securities or the preferred securities or to make any funds
5
<PAGE>
available therefor, whether by dividends, loans or other payments, and do not
guarantee the payment of interest on or principal of the junior subordinated
debt trust securities or the preferred securities. Any right we have to
receive any assets of any of our subsidiaries upon any liquidation,
dissolution, winding up, receivership, reorganization, assignment for the
benefit of creditors, marshaling of assets and liabilities or any bankruptcy,
insolvency or similar proceedings (and the consequent right of the holders of
the junior subordinated debt trust securities and preferred securities to
participate in the distribution of, or to realize proceeds from, those assets)
will be effectively subordinated to the claims of any such subsidiary's
creditors (including trade creditors and holders of debt issued by such
subsidiary).
We are not required to pay you under the guarantee if the applicable AES
Trusts do not have cash available. The ability of the applicable AES Trust to
make payments on the preferred securities is solely dependent upon us making
the related payments on the junior subordinated debt trust securities when
due. If we default on our obligations to make payments on the junior
subordinated debt trust securities, the applicable AES Trust will not have
sufficient funds to make payments on the preferred securities. In those
circumstances, you will not be able to rely upon the guarantee for payment of
these amounts.
Our ability to make distributions. The ability of the AES Trusts to make
distributions and other payments on the preferred securities is solely
dependent upon us making interest and other payments on the junior
subordinated debt trust securities deposited as trust assets as and when
required. If we were not to make distributions or other payments on the junior
subordinated debt trust securities for any reason, including as a result of
our election to defer the payment of interest on the junior subordinated debt
trust securities by extending the interest period on the junior subordinated
debt trust securities, the AES Trusts will not make payments on the preferred
securities. In such an event, holders of the preferred securities would not be
able to rely on the preferred securities guarantee since distributions and
other payments on the preferred securities are subject to this guarantee only
if and to the extent that we have made a payment to the Property Trustee (as
defined herein) of interest or principal on the junior subordinated debt trust
securities deposited in the trust as trust assets. Instead, holders of
preferred securities would rely on the enforcement by the Property Trustee of
its rights as registered holder of the junior subordinated debt trust
securities against us pursuant to the terms of the Indenture (as defined
herein). However, if the Trust's failure to make distributions on the
preferred securities is a consequence of the exercise by us of our right to
extend the interest payment period for the junior subordinated debt trust
securities, the Property Trustee will have no right to enforce the payment of
distributions on the preferred securities until an Event of Default (as
defined herein) under the Declaration (as defined herein) shall have occurred.
The Declaration provides that we shall pay for all debts and obligations
(other than with respect to the Trust Securities) and all costs and expenses
of the AES Trusts, including any taxes and all costs and expenses with respect
thereto, to which the AES Trusts may become subject, except for United States
withholding taxes. No assurance can be given that we will have sufficient
resources to enable it to pay these debts, obligations, costs and expenses on
behalf of the AES Trusts.
Option to extend interest payment period; tax impact of extension. So
long as we are in default in the payment of interest on the junior
subordinated debt trust securities, we have the right under the indenture to
defer payments of interest on the junior subordinated debt trust securities by
extending the interest payment period from time to time on the junior
subordinated debt trust securities for an extension period not exceeding 20
consecutive quarterly interest periods (an "Extension Period"), during which
no interest shall be due and payable. In this event, quarterly distributions
on the preferred securities would not be made by the applicable AES Trust
during any Extension Period. If we exercise the right to extend an interest
payment period, we may not during the Extension Period 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; provided that:
o we will be permitted to pay accrued dividends upon the exchange or
redemption of any series of preferred stock of AES as may be
outstanding from time to time, in accordance with the terms of that
stock and
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o the foregoing will not apply to stock dividends paid by us.
Under our certificate of incorporation, we are authorized to issue up to
50,000,000 shares of preferred stock. As of June 29, 1999, no shares of our
preferred stock were outstanding. We may from time to time offer shares of our
preferred stock to the public.
Prior to the termination of any Extension Period, we may further extend
that 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, we may commence a new Extension Period,
subject to the above requirements. We may also prepay at any time all or any
portion of the interest accrued during an Extension Period. Consequently,
there could be multiple Extension Periods of varying lengths throughout the
term of the junior subordinated debt trust securities, not to exceed 20
consecutive quarters or to cause any extension beyond the maturity of the
junior subordinated debt trust securities. See any accompanying prospectus
supplement relating to junior subordinated debt trust securities.
Because we have the right to extend the interest payment period for an
Extension Period of up to 20 consecutive quarterly interest periods on various
occasions, the junior subordinated debt trust securities will be treated as
issued with "original issue discount" for United States federal income tax
purposes. As a result, holders of preferred securities will be required to
include their pro rata share of original issue discount in gross income as it
accrues for United States federal income tax purposes in advance of the
receipt of cash. Generally, all of a securityholder's taxable interest income
with respect to the junior subordinated debt trust securities will be
accounted for as "original issue discount" and actual distributions of stated
interest will not be separately reported as taxable income. See any
accompanying prospectus supplement relating to junior subordinated debt trust
securities.
Deferral of distributions would have adverse tax consequences for you and
may adversely affect the trading price of the preferred securities. If
distributions on the preferred securities are deferred, you will be required
to recognize interest income for United States federal income tax purposes in
respect of your ratable share of the interest on the junior subordinated debt
trust securities held by the applicable AES Trust before you receive any cash
distributions relating to this interest. In addition, you will not receive
this cash if you sold the preferred securities before the end of any deferral
period or before the record date relating to distributions which are paid. We
have no current intention of deferring interest payments on the junior
subordinated debt trust securities. However, if we exercise our right in the
future, the preferred securities may trade at a price that does not fully
reflect the value of accrued but unpaid interest on the junior subordinated
debt trust securities. If you sell the preferred securities during an interest
deferral period, you may not receive the same return on investment as someone
else who continues to hold the preferred securities. In addition, the
existence of our right to defer payments of interest on the junior
subordinated debt trust securities may mean that the market price for the
preferred securities, which represent an undivided beneficial interest in the
junior subordinated debt trust securities, may be more volatile than other
securities that do not have these rights.
You should not rely on the distributions from the preferred securities
through their maturity date--they may be redeemed at any time if certain
changes in tax, investment company or bank regulatory law occur. If certain
changes, which are more fully described below, in tax, investment company or
bank regulatory law occur and are continuing, and certain other conditions
which are more fully described below are satisfied, the preferred securities
could be redeemed by the AES Trusts within 90 days of the event at a redemption
price set forth in the applicable prospectus supplement plus any accrued and
unpaid distributions. See "Description of the Preferred Securities".
You should not rely on the distributions from the preferred securities
through their maturity date--they may be redeemed at the option of AES. The
preferred securities may be redeemed, in whole, at any time, or in part, from
time to time, on or after the date specified in the applicable prospectus
supplement at a redemption price set forth in the applicable prospectus
supplement plus any accrued and unpaid distributions to the redemption date.
You should assume that this redemption option will be exercised if we are able
to refinance at a lower interest rate or it is otherwise in our interest to
redeem the junior subordinated debt securities. If the junior subordinated debt
trust securities are redeemed, the AES Trusts must redeem the preferred
securities and the common securities having an aggregate liquidation amount
equal to the aggregate principal amount of junior
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subordinated debt trust securities to be redeemed. See "Description of the
Preferred Securities" and "Description of the Junior Subordinated Debt Trust
Securities" on pages 22 and 27, respectively.
There can be no assurance as to the market prices for the preferred
securities or the junior subordinated debt trust securities; therefore, you
may suffer a loss. The AES Trusts and AES cannot give you any assurance as to
the market prices for the preferred securities or the junior subordinated debt
trust securities that may be distributed in exchange for preferred securities.
Accordingly, the preferred securities that an investor may purchase, whether
pursuant to the offer made by this prospectus or in the secondary market, or
the junior subordinated debt trust securities that a holder of preferred
securities may receive in exchange for preferred securities, may trade at a
discount to the price that the investor paid to purchase the preferred
securities. As a result of the right to defer payments on the preferred
securities, the market price of the preferred securities may be more volatile
than the market prices of other securities to which such optional deferrals do
not apply.
There could be an adverse tax consequence to you if we terminate the AES
Trusts and distribute junior subordinated debt trust securities to holders,
resulting in possible tax and liquidity consequences to you. We have the right
to terminate the AES Trusts at any time, so long as it obtains any required
regulatory approval. If we decide to exercise our right to terminate the AES
Trusts, they will redeem the preferred securities and common securities by
distributing the junior subordinated debt trust securities to holders of the
preferred securities and common securities on a ratable basis. Under current
United States federal income tax law, a distribution of junior subordinated
debt trust securities to you on the dissolution of an AES Trust should not be
a taxable event to you. However, if the AES Trusts are characterized for
United States federal income tax purposes as an association taxable as a
corporation at the time it is dissolved or if there is a change in law, the
distribution of junior subordinated debt trust securities to you may be a
taxable event to you.
There may be no trading market for the junior subordinated debt trust
securities if the AES Trusts distribute them to you. Although we will use our
best efforts to list the junior subordinated debt trust securities on the
exchange on which the preferred securities are then listed, if they are
distributed, we cannot assure you that the junior subordinated debt trust
securities will be approved for listing or that a trading market will exist
for those securities.
Since you have limited voting rights, you cannot prevent the AES Trust
trustees from taking actions you may not agree with. You will have limited
voting rights. In particular, except for the limited exceptions described
below, only AES can elect or remove any of the AES Trusts' trustees.
Special Event Redemption or Distribution. Upon the occurrence and during
the continuation of a Tax Event or Investment Company Event (each as defined
herein), which may occur at any time, the applicable AES Trust shall, unless
the junior subordinated debt trust securities are redeemed in the limited
circumstances described below, be dissolved with the result that junior
subordinated debt trust securities having an aggregate principal amount equal
to the aggregate stated liquidation amount of, and bearing accrued and unpaid
distributions on, the preferred securities and common securities would be
distributed on a Pro Rata Basis (as defined herein under "The AES Trusts--
Distributions") to the holders of the preferred securities and common
securities in liquidation of that trust. In the case of a Tax Event, in
certain circumstances, we shall have the right to redeem at any time the
junior subordinated debt trust securities in whole or in part, in which event
the applicable AES Trust will redeem preferred securities and common
securities on a Pro Rata Basis to the same extent as the junior subordinated
debt trust securities are redeemed. There can be no assurance as to the market
prices for preferred securities or the junior subordinated debt trust
securities which may be distributed in exchange for preferred securities if a
dissolution and liquidation of the applicable AES Trust were to occur.
Accordingly, the preferred securities that an investor may purchase, or the
junior subordinated debt trust securities that the investor may receive on
dissolution and liquidation of the applicable AES Trust, may trade at a
discount to the price that the investor paid to purchase the preferred
securities offered hereby. Because holders of preferred securities may receive
junior subordinated debt trust securities upon the occurrence of a Special
Event (as defined herein), prospective purchasers of preferred securities are
also making an investment decision with regard to the junior subordinated debt
trust securities and should carefully review all the information regarding the
junior
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subordinated debt trust securities contained in any accompanying prospectus
supplement relating to junior subordinated debt trust securities.
There can be no assurance that future federal legislative proposals will
not prevent us from deducting interest on the junior subordinated debt trust
securities. This would constitute a Tax Event and could result in the
distribution of any junior subordinated debt trust securities to holders of
the preferred securities or, in certain circumstances, the redemption of these
securities by us and the distribution of the resulting cash in redemption of
the preferred securities. See any accompanying prospectus supplement relating
to junior subordinated debt trust securities.
"Tax Event" means that the Regular Trustees (as defined herein) shall
have obtained an opinion of a nationally recognized independent tax counsel
experienced in such matters (a "Dissolution Tax Opinion") to the effect that
on or after the date of any accompanying prospectus supplement relating to
junior subordinated debt trust securities as a result of
o any amendment to, or change in, the laws (or any regulations
thereunder) of the United States or any political subdivision or
taxing authority thereof or therein,
o 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),
o 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
o any action taken by any governmental agency or regulatory authority,
which amendment or change is enacted, promulgated, issued or
effective or which interpretation or pronouncement is issued or
announced or which action is taken, in each case on or after the
date of such prospectus supplement, where there is more than an
insubstantial risk that
o the applicable AES 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 junior
subordinated debt trust securities,
o the applicable AES 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
o interest payable by us to the applicable AES Trust on the
junior subordinated debt trust securities is not, or within 90
days of the date thereof will not be, deductible by us 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 of 1940, as amended (the "1940
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 an
AES Trust is or will be considered an "investment company" which is required
to be registered under the 1940 Act, which Change in 1940 Act Law becomes
effective on or after the date of any accompanying prospectus supplement
relating to junior subordinated debt trust securities.
"Special Event" means a Tax Event or an Investment Company Event.
The preferred securities constitute a new issue of securities with no
established trading market. The preferred securities may trade at a price that
does not fully reflect the value of accrued but unpaid interest with respect
to the underlying junior subordinated debt trust securities. A holder who
disposes of his preferred securities between record
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dates for payments of distributions thereon will be required to include
accrued but unpaid interest on the junior subordinated debt trust securities
through the date of disposition in income as ordinary income, and to add such
amount to his adjusted tax basis in his pro rata share of the underlying
junior subordinated debt trust securities deemed disposed of. Accordingly,
such a holder will recognize a capital loss to the extent the selling price
(which may not fully reflect the value of accrued but unpaid interest) is less
than the holders adjusted tax basis (which will include accrued but unpaid
interest). Subject to certain limited exceptions, capital losses cannot be
applied to offset ordinary income for United States federal income tax
purposes. See any accompanying prospectus supplement relating to junior
subordinated debt trust securities.
Potential Market Volatility During Extension Period. As described above,
we have the right to extend an interest payment period on the junior
subordinated debt trust securities from time to time for a period not
exceeding 20 consecutive quarterly interest periods. If we determine to extend
an interest payment period, or if we thereafter extend an Extension Period or
prepay interest accrued during an Extension Period as described above, the
market price of the preferred securities is likely to be affected. In
addition, as a result of these rights, the market price of the preferred
securities (which represent an undivided interest in junior subordinated debt
trust securities) may be more volatile than other securities on which original
issue discount accrues that do not have such rights. A holder that disposes of
its preferred securities during an Extension Period, therefore, may not
receive the same return on its investment as a holder that continues to hold
its preferred securities. See any accompanying prospectus supplement relating
to junior subordinated debt trust securities.
We do a significant amount of our business outside the United States
which presents significant risks. Our involvement in the development of new
projects and the acquisition of existing plants in locations outside the
United States is increasing and most of our current development and
acquisition activities are for projects and plants outside the United States.
We have ownership interests in 104 power plants in operation or under
construction, 87 of these are outside of the United States.
The financing, development and operation of projects outside the United
States entail significant political and financial uncertainties (including,
without limitation, uncertainties associated with first-time privatization
efforts in the countries involved, currency exchange rate fluctuations,
currency repatriation restrictions, currency inconvertibility, political
instability, civil unrest, and expropriation) and other credit quality,
liquidity or structuring issues that have the potential to cause substantial
delays in respect of or material impairment of the value of the project being
developed or operated, which we may not be capable of fully insuring or
hedging against. The ability to obtain financing on a commercially acceptable
non-recourse basis in developing nations may also require us to make higher
investments than historically have been the case. In addition, financing in
countries with less than investment grade sovereign credit ratings may also
require substantial participation by multilateral financing agencies. There
can be no assurance that such financing can be obtained when needed.
The uncertainty of the legal environment in certain countries in which we
are or in the future may be developing, constructing or operating could make
it more difficult for us to enforce our respective rights under agreements
relating to such projects. In addition, the laws and regulations of certain
countries may limit our ability to hold a majority interest in some of the
projects that we may develop or acquire. International projects we own may, in
certain cases, be expropriated by applicable governments. Although we may have
legal recourse in enforcing our rights under agreements and recovering damages
for breaches thereof, there can be no assurance that any such legal
proceedings will be successful.
Global competition is increasing and could adversely affect us. The
global power production market is characterized by numerous strong and capable
competitors, many of whom may have extensive and diversified developmental or
operating experience (including both domestic and international experience)
and financial resources similar to or greater than ours. Further, in recent
years, the power production industry has been characterized by strong and
increasing competition with respect to both obtaining power sales agreements
and acquiring existing power generation assets. In certain markets, these
factors have caused reductions in prices contained in new power sales
agreements and, in many cases, have caused higher acquisition prices for
existing assets through competitive bidding
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practices. The evolution of competitive electricity markets and the
development of highly efficient gas-fired power plants have also caused, or
are anticipated to cause, price pressure in certain power markets where we
sell or intend to sell power. There can be no assurance that the foregoing
competitive factors will not have a material adverse effect on us.
Development Uncertainties. The majority of the projects that we develop
are large and complex and the completion of any such project is subject to
substantial risks. Development can require us to expend significant sums for
preliminary engineering, permitting, legal and other expenses in preparation
for competitive bids which we may not win or before it can be determined
whether a project is feasible, economically attractive or capable of being
financed. Successful development and construction is contingent upon, among
other things, negotiation of satisfactory engineering, construction, fuel
supply and power sales contracts with other project participants, receipt of
required governmental permits and consents and timely implementation and
satisfactory completion of construction. There can be no assurance that we
will be able to obtain new power sales contracts, overcome local opposition,
if any, obtain the necessary site agreements, fuel supply and ash disposal
agreements, construction contracts, steam sales contracts, licenses and
certifications, environmental and other permits and financing commitments
necessary for the successful development of our projects. There can be no
assurance that development efforts on any particular project, or our efforts
generally, will be successful. If these development efforts are not
successful, we may abandon a project under development. At the time of
abandonment, we would expense all capitalized development costs incurred in
connection therewith and could incur additional losses associated with any
related contingent liabilities. Our future growth is dependent, in part, upon
the demand for significant amounts of additional electrical generating
capacity and our ability to obtain contracts to supply portions of this
capacity. Any material unremedied delay in, or unsatisfactory completion of,
construction of our projects could, under certain circumstances, have an
adverse effect on our ability to meet our obligations, including the payment
of principal of, premium, if any, and interest on Debt trust securities. We may
also be faced with certain development uncertainties arising out of doing
business outside of the United States. See "We do a significant amount of
our business outside the United States which presents significant risks. "
Our acquisitions may not perform as expected. We have achieved a majority
of our growth through acquisitions and expect that we will continue to grow,
in part, through acquisitions. Although each of the acquired businesses had a
significant operating history at the time we acquired them, we have a limited
history of owning and operating many of these businesses. In addition, most of
these businesses were government owned and some were operated as part of a
larger integrated utility prior to their acquisition. There can be no
assurance that we will be successful in transitioning these to private
ownership, that such businesses will perform as expected or that the returns
from such businesses will support the indebtedness incurred to acquire them or
the capital expenditures needed to develop them.
We may not be able to raise sufficient capital to fund future
acquisitions and projects. Each of our projects under development and those
independent power facilities we may seek to acquire may require substantial
capital investment. Continued access to capital with acceptable terms is
necessary to assure the success of future projects and acquisitions. We have
utilized project financing loans to fund the capital expenditures associated
with constructing and acquiring our electric power plants and related assets
to the extent possible. Project financing borrowings have been substantially
non-recourse to our other subsidiaries and affiliates and to us as the parent
company and are generally secured by the capital stock, physical assets,
contracts and cash flow of the related project subsidiary or affiliate. We
intend to continue to seek, where possible, such non-recourse project
financing. However, depending on market conditions and the unique
characteristics of individual projects, such financing may not be available or
our traditional providers of project financing, particularly multinational
commercial banks, may seek higher borrowing spreads and increased equity
contributions.
Furthermore, because of the reluctance of commercial lending institutions
to provide non-recourse project financing (including financial guarantees) in
certain less developed economies, we have sought and will continue to seek, in
such locations, direct or indirect (through credit support or guarantees)
project financing from a limited number of multilateral or bilateral
international financial institutions or agencies. As a precondition to making
such project financing available, these institutions may also require
governmental guarantees of certain project and sovereign related
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risks. Depending on the policies of specific governments, such guarantees may
not be offered and as a result, we may determine that sufficient financing
will ultimately not be available to fund the related project.
In addition to the project financing loans, if available, we provide a
portion, or in certain instances all, of the remaining long-term financing
required to fund development, construction, or acquisition. These investments
have generally taken the form of equity investments or loans, which are
subordinated to the project financing loans. The funds for these investments
have been provided by cash flows from operations and by the proceeds from
borrowings under our short-term credit facilities and issuances of senior
subordinated notes, convertible debentures and common stock.
Our ability to arrange for financing on either a fully recourse or a
substantially non-recourse basis and the costs of such capital are dependent
on numerous factors, including general economic and capital market conditions,
the availability of bank credit, investor confidence, the continued success of
current projects and provisions of tax and securities laws which are conducive
to raising capital in this manner. Should future access to capital not be
available, we may decide not to build new plants or acquire existing
facilities. While a decision not to build new plants or acquire existing
facilities would not affect the results of operations of our currently
operating facilities or facilities under construction, such a decision would
affect our future growth.
Our performance is dependent to a large degree on certain of our larger
projects and their utility customers. The nature of most of our power projects
is such that each facility generally relies on one power sales contract with a
single customer for the majority, if not all, of its revenues over the life of
the power sales contract. The prolonged failure of any one utility customer to
fulfill its contractual obligations could have a substantial negative impact
on our primary source of revenues. We have sought to reduce this risk in part
by entering into power sales contracts with utilities or other customers of
strong credit quality and by locating its plants in different geographic areas
in order to mitigate the effects of regional economic downturns.
We are subject to significant government regulation. Our cogeneration
operations in the United States are subject to the provisions of various laws
and regulations, including the Public Utility Regulatory Policies Act of 1978,
as amended ("PURPA") and the Public Utility Holding Company Act, as amended
("PUHCA"). PURPA provides to qualifying facilities ("QFs") certain exemptions
from substantial federal and state legislation, including regulation as public
utilities. PUHCA regulates public utility holding companies and their
subsidiaries. We are not and will not be subject to regulation as a holding
company under PUHCA as long as the domestic power plants we own are QFs under
PURPA. QF status is conditioned on meeting certain criteria, and would be
jeopardized, for example, by the loss of a steam customer. We believe that,
upon the occurrence of an event that would threaten the QF status of one of
our domestic plants, we would be able to react in a manner that would avoid
the loss of QF status (such as by replacing the steam customer). In the event
we were unable to avoid the loss of such status for one of our plants, to
avoid public utility holding company status, we could apply to the Federal
Energy Regulatory Commission ("FERC") to obtain status as an Exempt Wholesale
Generator ("EWG"), or could restructure the ownership of the project
subsidiary. EWGs, however, are subject to broader regulation by FERC and may
be subject to state public utility commissions regulation regarding non-rate
matters. In addition, any restructuring of a project subsidiary could result
in, among other things, a reduced financial interest in such subsidiary, which
could result in a gain or loss on the sale of the interest in such subsidiary,
the removal of such subsidiary from our consolidated income tax group or our
consolidated financial statements, or an increase or decrease in our results
of operations.
The United States Congress is considering proposed legislation which
would repeal PURPA entirely, or at least repeal the obligation of utilities to
purchase from QFs. There is strong support for grandfathering existing QF
contracts if such legislation is passed, and also support for requiring
utilities to conduct competitive bidding for new electric generation if the
PURPA purchase obligation is eliminated. Various bills have also proposed
repeal of PUHCA. Repeal
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of PUHCA would allow both independent power producers and vertically
integrated utilities to acquire retail utilities in the United States that are
geographically widespread, as opposed to the current limitations of PUHCA
which require that retail electric systems be capable of physical integration.
In addition, registered holding companies would be free to acquire non-utility
businesses, which they may not do now, with certain limited exceptions. In the
event of a PUHCA repeal, competition for independent power generators from
vertically integrated utilities would likely increase. Repeal of PURPA and/or
PUHCA may or may not be part of comprehensive legislation to restructure the
electric utility industry, allow retail competition, and deregulate most
electric rates. The effect of any such repeal cannot be predicted, although
any such repeal could have a material adverse effect on us.
Pending electric utility industry restructuring proposals could have an
adverse effect on us. The FERC and many state utility commissions are
currently studying a number of proposals to restructure the electric utility
industry in the United States. Such restructuring would permit utility
customers to choose their utility supplier in a competitive electric energy
market. The FERC issued a final rule in April 1996 which requires utilities to
offer wholesale customers and suppliers open access on utility transmission
lines, on a comparable basis to the utilities' own use of the lines. The final
rule is subject to rehearing and may become the subject of court litigation.
Many utilities have already filed "open access" tariffs. The utilities contend
that they should recover from departing customers their fixed costs that will
be "stranded" by the ability of their wholesale customers (and perhaps
eventually, their retail customers) to choose new electric power suppliers.
The FERC final rule endorses the recovery of legitimate and verifiable
"stranded costs." These may include the costs utilities are required to pay
under many QF contracts which the utilities view as excessive when compared
with current market prices. Many utilities are therefore seeking ways to lower
these contract prices or rescind the contracts altogether, out of concern that
their shareholders will be required to bear all or part of such "stranded"
costs. Some utilities have engaged in litigation against QFs to achieve these
ends.
In addition, future United States electric rates may be deregulated in a
restructured United States electric utility industry and increased competition
may result in lower rates and less profit for United States electricity
sellers. Falling electricity prices and uncertainty as to the future structure
of the industry is inhibiting United States utilities from entering into
long-term power purchase contracts. The effect on us of any such restructuring
cannot be predicted, although any such restructuring could have a material
adverse effect on us.
From time to time we are subject to material litigation and regulatory
proceedings. From time to time, we and our affiliates are parties to
litigation and regulatory proceedings. Investors should review the
descriptions of such matters contained in our Annual, Quarterly and Current
Reports filed with the Commission and incorporated by reference herein. There
can be no assurances that the outcome of such matters will not have a material
adverse effect on our consolidated financial position.
Our business is subject to stringent environmental regulations. Our
activities are subject to stringent environmental regulation by federal,
state, local and foreign governmental authorities. For example, the Clean Air
Act Amendments of 1990 impose more stringent standards than those previously
in effect, and require states to impose permit fees on certain emissions.
Congress and other foreign governmental authorities also may consider
proposals to restrict or tax certain emissions. These proposals, if adopted,
could impose additional costs on the operation of our power plants. There can
be no assurance that we would be able to recover all or any increased costs
from its customers or that its business, financial condition or results of
operations would not be materially and adversely affected by future changes in
domestic or foreign environmental laws and regulations. We have made and will
continue to make capital and other expenditures to comply with environmental
laws and regulations. There can be no assurance that such expenditures will
not have a material adverse effect on our financial condition or results of
operations.
Our directors and officers have significant ownership interests in us and
can exert significant influence or control over matters requiring stockholder
approval. As of February 2, 1999, our two founders, Roger W. Sant and Dennis W.
Bakke, and their immediate families together owned beneficially approximately
21.7% of our outstanding Common Stock. As a result of their ownership
interests, Messrs. Sant and Bakke may be able to significantly influence or
exert control over our affairs, including the election of our directors. As of
February 2, 1999, all of our officers and directors and their immediate families
together owned beneficially approximately 29.1% of our outstanding Common
Stock. To
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the extent that they decide to vote together, these stockholders would be able
to significantly influence or control the election of our directors, our
management and policies and any action requiring stockholder approval,
including significant corporate transactions.
Our adherence to our "shared principles" could have an adverse impact on
our results of operations. A core part of our corporate culture is a
commitment to "shared principles": to act with integrity, to be fair, to have
fun and to be socially responsible. We seek to adhere to these principles not
as a means to achieve economic success, but because adherence is a worthwhile
goal in and of itself. However, if we perceive a conflict between these
principles and profits, we will try to adhere to our principles -- even though
doing so might result in diminished or foregone opportunities or financial
benefits.
Shares Eligible for Future Sale. From time to time, our subsidiaries
incur indebtedness that is secured by a pledge of shares of our common stock
held by that subsidiary. The sale of a substantial number of such shares in
the public market upon any foreclosure or otherwise could have an adverse
effect on the market price of our common stock.
Risk of Fraudulent Transfer. Various fraudulent conveyance laws have been
enacted for the protection of creditors and may be applied by a court on
behalf of any unpaid creditor or a representative of our creditors in a
lawsuit to subordinate or avoid the junior subordinated debentures in favor of
our other existing or future creditors. Under applicable provisions of the
U.S. Bankruptcy code or comparable provisions of state fraudulent transfer or
conveyance laws, if we at the time of issuance of junior subordinated
debentures,
o incurred such indebtedness with intent to hinder, delay or defraud
any of our present or future creditors or contemplated insolvency
with a design to prefer one or more creditors to the exclusion in
whole or in part of others or
o received less than reasonably equivalent value or fair consideration
for issuing junior subordinated debentures and we
o were insolvent,
o were rendered insolvent by reason of the issuance of the junior
subordinated debentures,
o were engaged or about to engage in business or a transaction
for which our remaining assets constitute unreasonably small
capital to carry on our business or
o intended to incur, or believed that we would incur, debts
beyond our ability to pay such debts as they mature, then, in
each case, a court of competent jurisdiction could void, in
whole or in part, the junior subordinated debentures.
Among other things, a legal challenge of the junior subordinated debentures on
fraudulent conveyance grounds may focus on the benefits, if any, realized by
us as a result of our issuance of the junior subordinated debentures.
The measure of insolvency for purposes of the foregoing will vary
depending upon the law applied in such case. Generally, however, we would be
considered insolvent if the sum of our debts, including contingent
liabilities, were greater than all of our assets at fair valuation or if the
present fair market value of our assets were less than the amount that would
be required to pay the probable liability on our existing debts, including
contingent liabilities, as they become absolute and mature. There can be no
assurance that, after providing for all prior claims, there will be sufficient
assets to satisfy the claims of the holders of the junior subordinated
debentures.
Management believes that, for purposes of all such insolvency, bankruptcy
and fraudulent transfer or conveyance laws, the junior subordinated debentures
are being incurred without the intent to hinder, delay or defraud creditors
and for proper purposes and in good faith, and that we after the issuance of
the junior subordinated debentures will be
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solvent, will have sufficient capital for carrying on our business and will be
able to pay our debts as they mature. There can be no assurance, however, that
a court passing on such questions would agree with management's view.
There is no prior public market for the securities that may be offered
pursuant to this prospectus -- as a result there could be significant price
volatility for such securities. Prior to the offering, there has been no
public market for the securities that may be offered pursuant to this
prospectus. There can be no assurance that an active trading market for any of
these securities will develop or be sustained. If such a market were to
develop, such securities could trade at prices that may be higher or lower
than their initial offering price depending upon many factors, including
prevailing interest rates, our operating results and the markets for similar
securities. Historically, the market for non-investment grade debt has
demonstrated substantial volatility in prices of securities similar to the
securities offered pursuant to this prospectus. There can be no assurance that
the future market for these securities will not be subject to similar
volatility. Accordingly, no assurance can be given as to the liquidity of the
securities offered by this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document that we file at
the public reference rooms of the SEC at 450 Fifth Street, N.W., Washington,
D.C. 20549; 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7
World Trade Center, Suite 1300, New York, New York 10048. You may obtain
information on the operation of the public reference rooms by calling the SEC
at 1-800-SEC-0330. The SEC also maintains an Internet site at
http://www.sec.gov, from where you can access our filings. Our Internet
address is http://www.aesc.com.
This prospectus constitutes part of a Registration Statement on Form S-3
filed with the Commission under the Securities Act of 1933 (the "Securities
Act"). It omits some of the information contained in the Registration
Statement, and reference is made to the Registration Statement for further
information on our company and the securities offered hereby. Any statement
contained in this prospectus concerning the provisions of any document filed
as an exhibit to the Registration Statement or otherwise filed with the
Commission is not necessarily complete, and in each instance reference is made
to the copy of the document filed.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings
made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until we sell all of the securities:
(a) Annual Report on Form 10-K for the year ended December 31, 1998;
(b) Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
(c) Current Reports on Form 8-K filed on March 18, 1999, April 12, 1999,
April 20, 1999, June 8, 1999 and June 11, 1999.
You may request a copy of these filings at no cost, by writing or
telephoning the office of William R. Luraschi, General Counsel and Secretary,
The AES Corporation, 1001 North 19th Street, Arlington, Virginia, telephone
number (703) 522-1315.
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SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements. We have based these
forward-looking statements on our current expectations and projections about
future events. These forward-looking statements are subject to risks,
uncertainties, and assumptions about AES, including, among other things:
o changes in company-wide operation and plan availability compared to
our historical performance; changes in our historical operating cost
structure, including changes in various costs and expenses;
o political and economic considerations in certain non-U.S. countries
where we are conducting or seeking to conduct business;
o restrictions on foreign currency convertibility and remittance
abroad, exchange rate fluctuations and developing legal systems;
o regulation and restrictions;
o legislation intended to promote competition in U.S. and non-U.S.
electricity markets;
o tariffs;
o governmental approval processes;
o environmental matters;
o construction, operating and fuel risks;
o load growth, dispatch and transmission constraints;
o impact of the Year 2000 issue;
o conflict of interest of contacting parties; and
o adherence to our principles.
We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. In light of these risks, uncertainties and assumptions,
the forward-looking events discussed in this prospectus might not occur.
USE OF PROCEEDS
Unless otherwise indicated in a prospectus supplement, proceeds from the
sale of the securities will be used by the Company for general corporate
purposes and may be temporarily invested in short-term securities.
Each AES Trust will use all proceeds received from the sale of its Trust
Securities to purchase junior subordinated debt trust securities from us.
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RATIO OF EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges is as follows:
Three
Months
Ended
Year Ended December 31, March 31
-------------------------------- --------
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
Ratio of earnings to fixed charges.. 2.10 2.20 1.88 1.46 1.65 1.61
For the purpose of computing the ratio of earnings to fixed charges,
earnings consist of income from continuing operations before income taxes and
minority interest, plus fixed charges, less capitalized interest, less excess
of earnings over dividends of less-than-fifty-percent-owned companies. Fixed
charges consist of interest (including capitalized interest) on all
indebtedness, amortization of debt discount and expense and that portion of
rental expense which we believe to be representative of an interest factor.
During the period from January 1, 1994 until March 31, 1999, no shares of
preferred stock were issued or outstanding, and during that period the Company
did not pay any preferred stock dividends.
THE COMPANY
We help to meet the world's needs by supplying electricity to customers
in many countries in a socially responsible way.
We have been successful in growing our business and serving additional
customers by participating in competitive bidding under privatization
initiatives. We have been particularly interested in acquiring existing
businesses or assets in electricity markets that are promoting competition and
eliminating rate of return regulation. In such privatizations, sellers
generally seek to complete competitive solicitations in less than one year,
much quicker than the time periods associated with greenfield development, and
usually require payment in full on transfer. We believe that our experience in
competitive markets and our worldwide integrated group structure, with our
significant geographic coverage and presence, enable us to react quickly and
creatively in these situations. Since 1994, our total generating capacity in
megawatts or MW has grown from 2,479 MW to 24,076 MW at March 31, 1999 (an
increase of 871%), with the total number of plants in operation increasing
from 9 to 89. Additionally, our total revenues have increased at a compound
annual growth rate of 46% from $533 million in 1994 to $2,398 million in 1998,
while net income has increased at a compound annual growth rate of 33% from
$100 million to $311 million over the same period.
A majority of our sales of electricity are made to customers (generally
electric utilities or regional electric companies), on a wholesale basis for
further resale to end users. This is referred to as the electricity
"generation" business. Sales by these generation companies are usually made
under long-term contracts from power plants owned by our subsidiaries and
affiliates, although we do, in certain circumstances, make sales into regional
electricity markets without contracts. Our ownership portfolio of power
facilities includes new plants constructed for such purposes, so-called
greenfield plants, as well as existing power plants acquired through
competitively bid privatization initiatives and negotiated acquisitions. In
the electricity generation business, we now own and operate (entirely or in
part) a diverse portfolio of electric power plants (including those within
integrated distribution companies) with a total capacity of 24,076 MW. Of that
total, 29% are fueled by coal or petroleum coke, 24% are fueled by natural
gas, 33% are hydroelectric facilities, 6% are fueled by oil, and the remaining
8% are capable of using multiple fossil fuels.
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THE AES TRUSTS
Each of AES Trust III, AES Trust IV and AES Trust V is a statutory
business trust formed, in the case of AES Trust III, on November 13, 1996, and
in the case of AES Trust IV and AES Trust V, on November 5, 1997, in each case
under the Delaware Business Trust Act (the "Business Trust Act") pursuant to a
separate declaration of trust among the Trustees (as defined herein) of that
AES Trust and us and the filing of a certificate of trust with the Secretary
of State of the State of Delaware. This declaration will be amended and
restated in its entirety (as so amended and restated, the "Declaration")
substantially in the form filed as an exhibit to the Registration Statement of
which this prospectus forms a part, as of the date the Preferred Securities of
the AES Trust are initially issued. Each Declaration will be qualified under
the Trust Indenture Act of 1939, (the "Trust Indenture Act").
This description summarizes the material terms of the Declarations and is
qualified in its entirety by reference to the form of Declaration, which has
been filed as an exhibit to the Registration Statement of which this
prospectus is a part, and the Trust Indenture Act.
Trust Securities
Upon issuance of any preferred securities by an AES Trust, the holders
thereof will own all of the issued and outstanding preferred securities of
that AES Trust. We will acquire securities representing common undivided
beneficial interests in the assets of each AES Trust (the "common securities"
and, together with the preferred securities, the "Trust Securities") in an
amount equal to at least 3% of the total capital of that AES Trust and will
own, directly or indirectly, all of the issued and outstanding common
securities of each AES Trust. The preferred securities and the common
securities will rank pari passu with each other and will have equivalent
terms; provided that
o if a Declaration Event of Default (as defined herein under "--Events
of Default") under the Declaration of an AES Trust occurs and is
continuing, the holders of preferred securities of that AES Trust
will have a priority over holders of the common securities of that
AES Trust with respect to payments in respect of distributions and
payments upon liquidation, redemption and maturity and
o holders of common securities have the exclusive right (subject to
the terms of the Declaration) to appoint, remove or replace the
trustees and to increase or decrease the number of trustees.
Each AES Trust exists for the purpose of
o issuing its preferred securities,
o issuing its common securities to AES,
o investing the gross proceeds from the sale of the Trust Securities
in junior subordinated debt trust securities of AES and
o engaging in only such other activities as are necessary, convenient
or incidental thereto. The rights of the holders of the preferred
securities, including economic rights, rights to information and
voting rights, are set forth in the applicable Declaration, the
Business Trust Act and the Trust Indenture Act.
Powers and Duties of Trustees
The number of trustees of each AES Trust shall initially be five. Three
of these Trustees (the "Regulator Trustees") are individuals who are employees
or officers of AES. The fourth trustee will be The First National Bank of
Chicago, which is unaffiliated with AES and which will serve as the property
trustee (the "Property Trustee") and act as the indenture trustee for purposes
of the Trust Indenture Act. The fifth trustee is First Chicago Delaware Inc.
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that has its principal place of business in the State of Delaware (the
"Delaware Trustee"). Pursuant to each Declaration, legal title to the junior
subordinated debt trust securities purchased by an AES Trust will be held by
the Property Trustee for the benefit of the holders of the Trust Securities of
such AES Trust, and the Property Trustee will have the power to exercise all
rights, powers and privileges under the Indenture (as defined under
"Description of the Junior Subordinated Debt Trust Securities") with respect
to the junior subordinated debt trust securities. In addition, the Property
Trustee will maintain exclusive control of a segregated non-interest bearing
bank account (the "Property Account") to hold all payments in respect of the
junior subordinated debt trust securities purchased by an AES Trust for the
benefit of the holders of Trust Securities. The Property Trustee will promptly
make distributions to the holders of the Trust Securities out of funds from
the Property Account. The preferred securities guarantees are separately
qualified under the Trust Indenture Act and will be held by The First National
Bank of Chicago, acting in its capacity as indenture trustee with respect
thereto, for the benefit of the holders of the applicable preferred
securities. As used in this prospectus and any accompanying prospectus
supplement, the term "Property Trustee" with respect to an AES Trust refers to
The First National Bank of Chicago acting either in its capacity as a trustee
under the relevant Declaration and the holder of legal title to the junior
subordinated debt trust securities purchased by that trust or in its capacity
as indenture trustee under, and the holder of, the applicable preferred
securities guarantee, as the context may require. AES, as the direct or
indirect owner of all of the common securities of each AES Trust, will have
the exclusive right (subject to the terms of the related Declaration) to
appoint, remove or replace Trustees and to increase or decrease the number of
trustees, provided that the number of trustees shall be, except under certain
circumstances, at least five and the majority of trustees shall be Regular
Trustees. The terms of the AES Trusts will be set forth in the prospectus
supplement, but may terminate earlier as provided in such Declaration.
The duties and obligations of the Trustees of an AES Trust shall be
governed by the Declaration of that AES Trust, the Business Trust Act and the
Trust Indenture Act. Under its Declaration, each AES Trust shall not, and the
Trustees shall cause such AES Trust not to, engage in any activity other than
in connection with the purposes of that AES Trust or other than as required or
authorized by the related Declaration. In particular, each AES Trust shall not
and the Trustees shall cause each AES Trust not to
o invest any proceeds received by that AES Trust from holding the
junior subordinated debt trust securities purchased by that AES
Trust but shall promptly distribute from the Property Account all
such proceeds to holders of Trust Securities pursuant to the terms
of the related Declaration and of the Trust Securities;
o acquire any assets other than as expressly provided in the related
Declaration;
o possess Trust property for other than a Trust purpose;
o make any loans, other than loans represented by the junior
subordinated debt trust securities;
o possess any power or otherwise act in such a way as to vary the
assets of such AES Trust or the terms of its Trust Securities in any
way whatsoever;
o issue any securities or other evidences of beneficial ownership of,
or beneficial interests in, such AES Trust other than its Trust
Securities;
o incur any indebtedness for borrowed money or
o or
- direct the time, method and place of exercising any trust or
power conferred upon the Indenture Trustee (as defined under
"Description of the Junior Subordinated Debt Trust Securities")
with respect to the junior subordinated debt trust securities
deposited in that AES Trust as trust assets or upon the
Property Trustee of that AES Trust with respect to its
preferred securities,
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- waive any past default that is waivable under the Indenture or
the Declaration,
- exercise any right to rescind or annul any declaration that the
principal of all of the junior subordinated debt trust
securities deposited in that AES Trust as trust assets shall be
due and payable or
- consent to any amendment, modification or termination of the
Indenture or such junior subordinated debt trust securities, in
each case where such consent shall be required, unless in the
case described in this bullet point 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 such AES Trust to be
classified for United States federal income tax purposes as an
association taxable as a corporation or a partnership and that
such AES Trust will continue to be classified as a grantor
trust for United States federal income tax purposes.
Books and Records
The books and records of each AES Trust will be maintained at the
principal office of such AES Trust and will be open for inspection by a holder
of preferred securities of that AES Trust or his representative for any
purpose reasonably related to his interest in such AES Trust during normal
business hours. Each holder of preferred securities will be furnished annually
with unaudited financial statements of the applicable AES Trust as soon as
available after the end of such AES Trust's fiscal year.
Voting
Holders of preferred securities will have limited voting rights, but will
not be able to appoint, remove or replace, or to increase or decrease the
number of, Trustees, which rights are vested exclusively in the common
securities.
The Property Trustee
The Property Trustee, for the benefit of the holders of the Trust
Securities of an AES Trust, is authorized under each Declaration to exercise
all rights under the Indenture with respect to the junior subordinated debt
trust securities deposited in that AES Trust as trust assets, including its
rights as the holder of those junior subordinated debt trust securities to
enforce our obligations under the junior subordinated debt trust securities
upon the occurrence of an Indenture Event of Default (as defined herein under
"Description of the Junior Subordinated Debt Trust Securities--Indenture
Events of Default"). The Property Trustee shall also be authorized to enforce
the rights of holders of preferred securities of an AES Trust under the
related preferred securities guarantee. If any AES Trust's failure to make
distributions on the preferred securities of an AES Trust is a consequence of
our exercise of any right under the terms of the junior subordinated debt
trust securities deposited in that AES Trust as trust assets to extend the
interest payment period for those junior subordinated debt trust securities,
the Property Trustee will have no right to enforce the payment of
distributions on those preferred securities until a Declaration Event of
Default shall have occurred.
Holders of at least a majority in liquidation amount of the preferred
securities held by an AES Trust will have the right to direct the Property
Trustee for that AES Trust with respect to certain matters under the
Declaration for that AES Trust and the related preferred securities guarantee.
If the Property Trustee fails to enforce its rights under the Indenture or
fails to enforce the preferred securities guarantee, to the extent permitted
by applicable law, any holder of preferred securities may, 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 against us to enforce
such rights or the preferred securities guarantee, as the case may be. In
addition, the holders of at least 25% in aggregate liquidation preference of
the outstanding preferred securities would have the right to directly
institute proceedings for enforcement of payments to such holders of principal
of, or premium, if any, or interest on the junior subordinated debt trust
securities having a principal amount equal to the aggregate liquidation
preference of the preferred securities of such holders (a "Direct Action"). In
connection with such Direct Action, we will be subrogated to the rights of
that holder of preferred securities under the
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Declaration to the extent of any payment made by us to that holder of
preferred securities in the Direct Action. Notwithstanding the foregoing, if
an Event of Default under the applicable Declaration has occurred and is
continuing and such event is attributable to the failure of us to pay interest
or principal on the applicable series of junior subordinated debt trust
securities 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 that AES Trust may directly institute a proceeding for
enforcement of payment to that holder of the principal of or interest on the
applicable series of junior subordinated debt trust securities having a
principal amount equal to the aggregate liquidation amount of the preferred
securities of that holder (a "Holder Direct Action") on or after the
respective due date specified in the applicable series of junior subordinated
debt trust securities. In connection with that Holder Direct Action, we will
be subrogated to the rights of that holder of preferred securities under the
applicable Declaration to the extent of any payment made by us to that holder
of preferred securities in the Holder Direct Action.
Distributions
Pursuant to each Declaration, distributions on the preferred securities
of an AES Trust must be paid on the dates payable to the extent that the
Property Trustee for that AES Trust has cash on hand in the applicable
Property Account to permit the payment. The funds available for distribution
to the holders of the preferred securities of an AES Trust will be limited to
payments received by the Property Trustee in respect of the junior
subordinated debt trust securities that are deposited in the AES Trust as
trust assets. If we do not make interest payments on the junior subordinated
debt trust securities deposited in an AES Trust as trust assets, the Property
Trustee will not make distributions on the preferred securities of that AES
Trust. Under the Declaration, if and to the extent we make interest payments
on the junior subordinated debt trust securities deposited in an AES Trust as
trust assets, the Property Trustee is obligated to make distributions on the
Trust Securities of that AES Trust on a Pro Rata Basis (as defined below). The
payment of distributions on the preferred securities of an AES Trust is
guaranteed by AES on a subordinated basis as and to the extent set forth under
"Description of the Preferred Securities Guarantee." A preferred securities
guarantee is a guarantee from the time of issuance of the applicable preferred
securities, but the preferred securities guarantee covers distributions and
other payments on the applicable preferred securities only if and to the
extent that we have made a payment to the Property Trustee of interest or
principal on the junior subordinated debt trust securities deposited in the
AES Trust as trust assets. As used in this prospectus, the term "Pro Rata
Basis" shall mean pro rata to each holder of Trust Securities of an AES Trust
according to the aggregate liquidation amount of the Trust Securities of that
AES Trust held by the relevant holder in relation to the aggregate liquidation
amount of all Trust Securities of that AES Trust outstanding unless, in
relation to a payment, a Declaration Event of Default under the Declaration
has occurred and is continuing, in which case any funds available to make the
payment shall be paid first to each holder of the preferred securities of that
AES Trust pro rata according to the aggregate liquidation amount of the
preferred securities held by the relevant holder in relation to the aggregate
liquidation amount of all the preferred securities of that AES Trust
outstanding, and only after satisfaction of all amounts owed to the holders of
such preferred securities, to each holder of common securities of that AES
Trust pro rata according to the aggregate liquidation amount of those common
securities held by the relevant holder in relation to the aggregate
liquidation amount of all common securities of that AES Trust outstanding.
Events of Default
If an Indenture Event of Default occurs and is continuing with respect to
junior subordinated debt trust securities deposited in an AES Trust as trust
assets, an Event of Default under the Declaration (a "Declaration Event of
Default") of that AES Trust will occur and be continuing with respect to any
outstanding Trust Securities of that AES Trust. In such event, each
Declaration provides that the holders of common securities of that AES Trust
will be deemed to have waived any Declaration Event of Default with respect to
the common securities until all Declaration Events of Default with respect to
the preferred securities of that AES Trust have been cured or waived. Until
all Declaration Events of Default with respect to the preferred securities of
that AES Trust have been so cured or waived, the Property Trustee will be
deemed to be acting solely on behalf of the holders of the preferred
securities of that AES Trust and only the holders of such preferred securities
will have the right to direct the Property Trustee with respect to certain
matters under such Declaration and consequently under the Indenture. In the
event that any Declaration Event of Default with
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respect to the preferred securities of such AES Trust is waived by the holders
of the preferred securities of that AES Trust as provided in the Declaration,
the holders of common securities pursuant to the Declaration have agreed that
the waiver also constitutes a waiver of the Declaration 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.
Record Holders
Each Declaration provides that the trustees of an AES Trust may treat the
person in whose name a certificate representing its preferred securities is
registered on the books and records of an AES Trust as the sole holder thereof
and of the preferred securities represented thereby for purposes of receiving
distributions and for all other purposes and, accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such certificate
or in the preferred securities represented thereby on the part of any person,
whether or not that AES Trust shall have actual or other notice thereof.
Preferred securities will be issued in fully registered form. Unless otherwise
specified in a prospectus supplement, preferred securities will be represented
by a global certificate registered on the books and records of such AES Trust
in the name of a depositary named in an accompanying prospectus supplement or
its nominee. Under each Declaration:
o that AES Trust and the trustees thereof shall be entitled to deal
with the depositary (or any successor depositary) for all purposes,
including the payment of distributions and receiving approvals,
votes or consents under the related Declaration, and except as set
forth in the related Declaration with respect to the Property
Trustee, shall have no obligation to persons owning a beneficial
interest in preferred securities ("Preferred Security Beneficial
Owners") registered in the name of and held by the depositary or its
nominee; and
o the rights of Preferred Security Beneficial Owners shall be
exercised only through the depositary (or any successor depositary)
and shall be limited to those established by law and agreements
between those Preferred Security Beneficial Owners and the
depositary and/or its participants. With respect to preferred
securities registered in the name of and held by the depositary or
its nominee, all notices and other communications required under
each Declaration shall be given to, and all distributions on those
preferred securities shall be given or made to, the depositary (or
its successor).
The specific terms of the depositary arrangement with respect to the
preferred securities will be disclosed in the applicable prospectus
supplement.
Debts and Obligations
In each Declaration, we have agreed to pay for all debts and obligations
(other than with respect to the Trust Securities) and all costs and expenses
of the applicable AES Trust, including the fees and expenses of its trustees
and any taxes and all costs and expenses with respect thereto, to which that
AES Trust may become subject, except for United States withholding taxes. The
foregoing obligations under each Declaration are 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 that Creditor has
received notice thereof. Any Creditor may enforce these obligations of ours
directly against us and we have irrevocably waived any right or remedy to
require that any Creditor take any action against any AES Trust or any other
person before proceeding against AES. We have agreed in each Declaration to
execute additional agreements as may be necessary or desirable in order to
give full effect to the foregoing.
DESCRIPTION OF THE PREFERRED SECURITIES
Each AES Trust may issue, from time to time, only one series of preferred
securities having terms described in the prospectus supplement relating
thereto. The Declaration of each AES Trust authorizes the Regular Trustees of
that AES Trust to issue on behalf of that AES Trust one series of preferred
securities. Each Declaration will be qualified as an indenture under the Trust
Indenture Act. The preferred securities will have terms, including
distributions, redemption, voting, liquidation rights and such other
preferred, deferred or other special rights or restrictions as shall
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be set forth in the related Declaration or made part of that Declaration by
the Trust Indenture Act. Reference is made to the prospectus supplement
relating to the preferred securities of an AES Trust for specific terms,
including
o the specific designation of the preferred securities,
o the number of preferred securities issued by the AES Trust,
o the annual distribution rate (or method of calculation thereof)
for preferred securities issued by such AES Trust, the date or
dates upon which such distributions shall be payable and the
record date or dates for the payment of such distributions,
o whether distributions on preferred securities issued by the AES
Trust shall be cumulative, and, in the case of preferred
securities having cumulative distribution rights, the date or
dates or method of determining the date or dates from which
distribution on preferred securities issued by that AES Trust
shall be cumulative,
o the amount or amounts which shall be paid out of the assets of
the AES Trust to the holders of preferred securities of that
AES Trust upon voluntary or involuntary dissolution, winding-up
or termination of that AES Trust,
o the obligation or right, if any, of the AES Trust to purchase
or redeem preferred securities issued by that AES Trust and the
price or prices at which, the period or periods within which
and the terms and conditions upon which preferred securities
issued by the AES Trust shall or may be purchased or redeemed,
in whole or in part, pursuant to that obligation or right,
o the voting rights, if any, of preferred securities issued by
the AES Trust in addition to those required by law, including
the number of votes per Preferred Security and any requirement
for the approval by the holders of preferred securities, or of
preferred securities issued by one or more AES Trusts, or of
both, as a condition to specified actions or amendments to the
Declaration of that AES Trust,
o terms for any conversion or exchange into other securities and
o any other relevant rights, preferences, privileges, limitations
or restrictions of preferred securities issued by the AES Trust
consistent with the Declaration of that AES Trust or with
applicable law.
All preferred securities offered hereby will be guaranteed by us as and
to the extent set forth below under "Description of the Preferred Securities
Guarantees." Certain United States federal income tax considerations
applicable to any offering of preferred securities will be described in the
prospectus supplement relating thereto.
In connection with the issuance of preferred securities, each AES Trust
will issue one series of common securities. The Declaration of each AES Trust
authorizes the Regular Trustees of that trust to issue on behalf of that AES
Trust one series of common securities having such terms including
distributions, redemption, voting, liquidation rights or such restrictions as
shall be set forth therein. The terms of the common securities issued by an
AES Trust will be substantially identical to the terms of the preferred
securities issued by that AES Trust and the common securities will rank pari
passu, and payments will be made thereon on a Pro Rata Basis with the
preferred securities except that if a Declaration Event of Default occurs and
is continuing, the rights of the holders of such common securities to payment
in respect of distributions and payments upon liquidation, redemption and
maturity will be subordinated to the rights of the holders of those preferred
securities. Except in certain limited circumstances, the common securities
issued by an AES Trust will also carry the right to vote and to appoint,
remove or replace any of the trustees of that AES Trust. All of the common
securities of an AES Trust will be directly or indirectly owned by AES.
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DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEES
Below is a summary of information concerning the preferred securities
guarantees that will be executed and delivered by us for the benefit of the
holders from time to time of preferred securities. Each preferred security
guarantee will be separately qualified under the Trust Indenture Act and will
be held by The First National Bank of Chicago, acting in its capacity as
indenture trustee with respect thereto, for the benefit of holders of the
preferred securities of the applicable AES Trust. The terms of each preferred
securities guarantee will be those set forth in each preferred securities
guarantee and those made part of that guarantee by the Trust Indenture Act.
This description summarizes the material terms of the preferred securities
guarantees and is qualified in its entirety by reference to the form of
preferred securities guarantee, which is filed as an exhibit to the
registration statement of which this prospectus forms a part, and the Trust
Indenture Act. Section and Article references used herein are references to
the provisions of the form of preferred securities guarantee.
General
Pursuant to each preferred securities guarantee, we will irrevocably and
unconditionally agree, to the extent set forth therein, to pay in full, to the
holders of the preferred securities issued by an AES Trust, the Guarantee
Payments (as defined herein) (without duplication of amounts theretofore paid
by that AES Trust), to the extent not paid by that AES Trust, regardless of
any defense, right of set-off or counterclaim that the AES Trust may have or
assert. The following payments or distributions with respect to preferred
securities issued by an AES Trust to the extent not paid or made by that AES
Trust (the "Guarantee Payments"), will be subject to the preferred securities
guarantee (without duplication):
o any accrued and unpaid distributions on those preferred securities,
and the redemption price, including all accrued and unpaid
distributions to the date of redemption, with respect to any
preferred securities called for redemption by that AES Trust but if
and only to the extent that in each case we have made a payment to
the related Property Trustee of interest or principal on the junior
subordinated debt trust securities deposited in that AES Trust as
trust assets and
o upon a voluntary or involuntary dissolution, winding-up or
termination of that AES Trust (other than in connection with the
distribution of that junior subordinated debt trust securities to
the holders of preferred securities or the redemption of all of the
preferred securities upon the maturity or redemption of such junior
subordinated debt trust securities) the lesser of
o the aggregate of the liquidation amount and all accrued and
unpaid distributions on that preferred securities to the date
of payment, to the extent that AES Trust has funds available
therefor or
o the amount of assets of that AES Trust remaining available for
distribution to holders of such Preferred Securities in
liquidation of that AES Trust.
Our obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by us to the holders of preferred securities
or by causing the applicable AES Trust to pay those amounts to those holders.
The preferred securities guarantee is a guarantee from the time of
issuance of the applicable preferred securities, but the preferred securities
guarantee covers distributions and other payments on those preferred
securities only if and to the extent that we have made a payment to the
Property Trustee of interest or principal on the junior subordinated debt
trust securities deposited in the applicable AES Trust as trust assets. If we
do not make interest or principal payments on the junior subordinated debt
trust securities deposited in the applicable AES Trust as trust assets, the
Property Trustee will not make distributions of the preferred securities of
that AES Trust and the AES Trust will not have funds available therefor.
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Our obligations under the Declaration for each Trust, the preferred
securities guarantee issued with respect to preferred securities issued by
that Trust, the junior subordinated debt trust securities purchased by that
Trust and the related Indenture (as defined below) in the aggregate will
provide a full and unconditional guarantee on a subordinated basis by us of
payments due on the preferred securities issued by that Trust.
Certain Covenants of AES
In each preferred securities guarantee, we will covenant that, so long as
any preferred securities issued by the applicable AES Trust remain
outstanding, we will not
o declare or pay any dividends on, or redeem, purchase, acquire or
make a distribution or liquidation payment with respect to, any of
our common stock or preferred stock or make any guarantee payment
with respect thereto or
o make any payment of interest, premium (if any) or principal on any
debt trust securities issued by us which rank pari passu with or
junior to the junior subordinated debt trust securities, if at such
time
o we are in default with respect to our Guarantee Payments or
other payment obligations under the preferred securities
guarantee,
o there shall have occurred any Declaration Event of Default under
the related Declaration or
o in the event that junior subordinated debt trust securities are
issued to an AES Trust in connection with the issuance of Trust
Securities by that AES Trust, we shall have given notice of our
election to defer payments of interest on these junior
subordinated debt trust securities by extending the interest
payment period as provided in the terms of the junior
subordinated debt trust securities and such period, or any
extension thereof, is continuing: provided that
- we will be permitted to pay accrued dividends (and cash in
lieu of fractional shares) upon the conversion of
Preferred Stock as may be outstanding from time to time,
in each case in accordance with the terms of such stock
and
- the foregoing will not apply to stock dividends paid by us.
In addition, so long as any preferred securities remain outstanding, we
have agreed
o to remain the sole direct or indirect owner of all of the
outstanding common securities issued by the applicable AES Trust and
shall not cause or permit the common securities to be transferred
except to the extent permitted by the related Declaration; provided
that any permitted successor of ours under the Indenture may succeed
to our ownership of the common securities issued by the applicable
AES Trust and
o to use reasonable efforts to cause that AES Trust to continue to be
treated as a grantor trust for United States federal income tax
purposes except in connection with a distribution of junior
subordinated debt trust securities.
Amendments and Assignment
Except with respect to any changes that do not adversely affect the
rights of holders of preferred securities (in which case no consent will be
required), each preferred securities guarantee may be amended only with the
prior approval of the holders of not less than 66 2/3% in liquidation amount of
the outstanding preferred securities issued by the applicable AES Trust. The
manner of obtaining an approval of holders of the preferred securities will be
described in an accompanying prospectus supplement. All guarantees and
agreements contained in a preferred securities
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guarantee shall bind the successors, assignees, receivers, trustees and
representatives of AES and shall inure to the benefit of the holders of the
preferred securities of the applicable AES Trust then outstanding. Except in
connection with a consolidation, merger or sale involving AES that is
permitted under the Indenture, we may not assign its obligations under any
preferred securities guarantee.
Termination of the Preferred Securities Guarantees
Each preferred securities guarantee will terminate and be of no further
force and effect as to the preferred securities issued by the applicable AES
Trust upon full payment of the redemption price of all preferred securities of
that AES Trust, or upon distribution of the junior subordinated debt trust
securities to the holders of the preferred securities of that AES Trust in
exchange for all of the preferred securities issued by that AES Trust, or upon
full payment of the amounts payable upon liquidation of that AES Trust.
Notwithstanding the foregoing, each preferred securities guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any holder of preferred securities issued by the applicable AES Trust
must restore payment of any sums paid under such preferred securities or such
guarantee.
Status of the Preferred Securities Guarantees
Our obligations under each preferred securities guarantee to make the
Guarantee Payments will constitute an unsecured obligation of ours and will
rank
o subordinate and junior in right of payment to all of our other
liabilities, including the junior subordinated debt trust
securities, except those made pari passu or subordinate by their
terms, and
o senior to all capital stock now or hereafter issued by us and to any
guarantee nor or hereafter entered into by us in respect of any of
our capital stock. Our obligations under each preferred securities
guarantee will rank pari passu with each other preferred securities
guarantee. Because we are a holding company, our obligations under
each preferred securities guarantee are also effectively
subordinated to all existing and future liabilities, including trade
payables, of our subsidiaries, except to the extent that we are a
creditor of the subsidiaries recognized as such. Each Declaration
provides that each holder of preferred securities issued by the
applicable AES Trust by acceptance thereof agrees to the
subordination provisions and other terms of the related preferred
securities guarantee.
Each preferred securities guarantee will constitute a guarantee of
payment and not of collection (that is, the guaranteed party may institute a
legal proceeding directly against the guarantor to enforce its rights under
the guarantee without first instituting a legal proceeding against any other
person or entity). Each preferred securities guarantee will be deposited with
The First National Bank of Chicago, as indenture trustee, to be held for the
benefit of the holders of the preferred securities issued by the applicable
AES Trust. The First National Bank of Chicago shall enforce the preferred
securities guarantee on behalf of the holders of the preferred securities
issued by the applicable AES Trust. The holders of not less than a majority in
aggregate liquidation amount of the preferred securities issued by the
applicable AES Trust have the right to direct the time, method and place of
conducting any proceeding for any remedy available in respect of the related
preferred securities guarantee, including the giving of directions to The
First National Bank of Chicago . If The First National Bank of Chicago fails
to enforce such preferred securities guarantee as above provided, any holder
of preferred securities issued by the applicable AES Trust may institute a
legal proceeding directly against us to enforce its rights under such
preferred securities guarantee, without first instituting a legal proceeding
against the applicable AES Trust or any other person or entity.
Notwithstanding the foregoing, if we have failed to make a guarantee payment,
a holder of preferred securities may directly institute a proceeding against
us for enforcement of the preferred securities guarantee for that payment.
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Miscellaneous
We will be required to provide annually to The First National Bank of
Chicago a statement as to the performance by us of certain of our obligations
under the preferred securities guarantees and as to any default in such
performance. We are required to file annually with The First National Bank of
Chicago an officer's certificate as to our compliance with all conditions
under the preferred securities guarantees.
The First National Bank of Chicago, prior to the occurrence of a default,
undertakes to perform only those duties as are specifically set forth in the
applicable preferred securities guarantee and, after default with respect to a
preferred securities guarantee, shall exercise the same degree of care as a
prudent individual would exercise in the conduct of his or her own affairs.
Subject to such provision, The First National Bank of Chicago is under no
obligation to exercise any of the powers vested in it by a preferred
securities guarantee at the request of any holder of preferred securities
unless it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby.
Governing Law
The Guarantees will be governed by, and construed in accordance with, the
laws of the State of New York.
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBT TRUST SECURITIES
Junior subordinated debt trust securities may be issued from time to time
in one or more series under an Indenture (the "Indenture") between us and The
First National Bank of Chicago, as trustee (the "Indenture Trustee"). The form
of junior subordinated debt trust securities indenture has been filed as an
exhibit to the Registration Statement of which this prospectus forms a part.
The following description summarizes the material terms of the Indenture, and
is qualified in its entirety by reference to the Indenture and the Trust
Indenture Act. Whenever particular provisions or defined terms in the
Indenture are referred to in this prospectus, those provisions or defined
terms are incorporated by reference in this prospectus. Section and article
references are references to provisions of the Indenture.
General
The junior subordinated debt trust securities will be unsecured, junior
subordinated obligation of AES. The Indenture does not limit the amount of
additional indebtedness we or any of our subsidiaries may incur. Since we are
a holding company, our rights and the rights of our creditors, including the
holders of junior subordinated debt trust securities, to participate in the
assets of any subsidiary upon the latter's liquidation or recapitalization
will be subject to the prior claims of the subsidiary's creditors, except to
the extent that we may ourselves be a creditor with recognized claims against
the subsidiary.
The Indenture does not limit the aggregate principal amount of
indebtedness which may be issued thereunder and provides that junior
subordinated debt trust securities may be issued thereunder from time to time
in one or more series. The junior subordinated debt trust securities are
issuable in one or more series pursuant to an indenture supplemental to the
Indenture.
In the event junior subordinated debt trust securities are issued to an
AES Trust or a Trustee of such trust in connection with the issuance of Trust
Securities by that AES Trust, those junior subordinated debt trust securities
subsequently may be distributed pro rata to the holders of these Trust
Securities in connection with the dissolution of such AES Trust upon the
occurrence of certain events described in the prospectus supplement relating
to such Trust Securities. Only one series of junior subordinated debt trust
securities will be issued to an AES Trust or a trustee of such trust in
connection with the issuance of Trust Securities by such AES Trust.
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Reference is made to the prospectus supplement which will accompany this
prospectus for the following terms of the series of junior subordinated debt
trust securities being offered thereby (to the extent such terms are
applicable to the junior subordinated debt trust securities):
o the specific designation of the junior subordinated debt trust
securities, aggregate principal amount, purchase price and premium,
if any;
o any limit on the aggregate principal amount of the junior
subordinated debt trust securities;
o the date or dates on which the principal of the junior subordinated
debt trust securities is payable and the right, to extend or defer
such date or dates;
o the rate or rates at which the junior subordinated debt trust
securities will bear interest or the method of calculating such rate
or rates, if any;
o the date or dates from which interest shall accrue, the interest
payment dates on which interest will be payable or the manner of
determination of the interest payment dates and the record dates for
the determination of holders to whom interest is payable on any
interest payment dates;
o the right, if any, to extend the interest payment periods and the
duration of the extension;
o the period or periods within which, the price or prices at which,
and the terms and conditions upon which, the junior subordinated
debt trust securities may be redeemed, in whole or in part, at the
option of AES;
o our obligation, if any, to redeem or purchase junior subordinated
debt trust securities pursuant to any sinking fund or analogous
provisions or at the option of the holder thereof and the period or
periods for which, the price or prices at which, and the terms and
conditions upon which, the junior subordinated debt trust securities
shall be redeemed or purchased, in whole or part, pursuant to that
obligation;
o any exchangeability, conversion or prepayment provisions of the
junior subordinated debt trust securities;
o any applicable United States federal income tax consequences,
including whether and under what circumstances we will pay
additional amounts on the junior subordinated debt trust securities
held by a person who is not a U.S. person in respect of any tax,
assessment or governmental charge withheld or deducted and, if so,
whether we will have the option to redeem those junior subordinated
debt trust securities rather than pay these additional amounts;
o the form of the junior subordinated debt trust securities;
o if other than denominations of $25 or any integral multiple thereof,
the denominations in which the junior subordinated debt trust
securities shall be issuable;
o any and all other terms with respect to that series, including any
modification of or additions to the events of default or covenants
provided for with respect to such series, including any modification
of or additions to the events of default or covenants provided for
with respect to the junior subordinated debt trust securities, and
any terms which may be required by or advisable under applicable
laws or regulations not inconsistent with the Indenture; and
o whether the junior subordinated debt trust securities are issuable
as a global security, and in such case, the identity of the
depositary.
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Unless otherwise indicated in the prospectus supplement relating thereto,
the junior subordinated debt trust securities will be issued in United States
dollars in fully registered form without coupons in denominations of $25 or
integral multiples thereof. Junior subordinated debt trust securities may be
presented for exchange and junior subordinated debt trust securities in
registered form may be presented for transfer in the manner, at the places and
subject to the restrictions set forth in the junior subordinated debt trust
securities and the prospectus supplement. These services will be provided
without charge, other than any tax or other governmental charge payable in
connection therewith, but subject to the limitations provided in the junior
subordinated debt trust securities. Junior subordinated debt trust securities
in bearer form and the coupons, if any, appertaining thereto will be
transferable by delivery.
Junior subordinated debt trust securities may bear interest at a fixed
rate or a floating rate. Junior subordinated debt trust securities bearing no
interest or interest at a rate that at the time of issuance is below the
prevailing market rate will be sold at a discount below their stated principal
amount. Special United States federal income tax considerations applicable to
any discounted junior subordinated debt trust securities or to certain junior
subordinated debt trust securities issued at par which are treated as having
been issued at a discount for United States federal income tax purposes will
be described in the relevant prospectus supplement.
CERTAIN COVENANTS OF AES APPLICABLE TO
THE JUNIOR SUBORDINATED DEBT TRUST SECURITIES
If junior subordinated debt trust securities are issued to an AES Trust
in connection with the issuance of Trust Securities by that AES Trust, we will
covenant in the Indenture that, so long as the preferred securities issued by
the applicable AES Trust remain outstanding, we 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 payment with respect to, any of its common stock
or preferred stock or make any guarantee payment with respect thereto if at
that time
o we are in default with respect to our Guarantee Payments or other
payment obligations under the related preferred securities
guarantee,
o there shall have occurred any Indenture Event of Default with
respect to the junior subordinated debt trust securities or
o in the event that junior subordinated debt trust securities are
issued to an AES Trust in connection with the issuance of Trust
Securities by that AES Trust, we shall have given notice of our
election to defer payments of interest on those junior subordinated
debt trust securities by extending the interest payment period as
provided in the terms of those junior subordinated debt trust
securities and that period, or any extension thereof, is continuing;
provided that
o we will be permitted to pay accrued dividends (and cash in lieu
of fractional shares) upon the conversion of any of our
preferred stock as may be outstanding from time to time, in
each case in accordance with the terms of such stock and
o the foregoing will not apply to any stock dividends paid by us.
In addition, if junior subordinated debt trust securities are issued to
an AES Trust in connection with the issuance of Trust Securities by that AES
Trust, for so long as the preferred securities issued by the applicable AES
Trust remain outstanding, we have agreed
o to remain the sole direct or indirect owner of all of the
outstanding common securities issued by the applicable AES Trust and
not to cause or permit the common securities to be transferred
except to the extent
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permitted by the related Declaration; provided that any permitted
successor of AES under the Indenture may succeed to our ownership of
the common securities issued by the applicable AES Trust,
o to comply fully with all of its obligations and agreements contained
in the related Declaration and
o not to take any action which would cause the applicable AES Trust to
cease to be treated as a grantor trust for United States federal
income tax purposes, except in connection with a distribution of
junior subordinated debt trust securities.
Subordination
The payment of principal of, premium, if any, and interest on the junior
subordinated debt trust securities will, to the extent and in the manner set
forth in the Indenture, be subordinated in right of payment to the prior
payment in full, in cash or cash equivalents, of all senior and subordinated
debt of AES.
Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, receivership, reorganization, assignment
for the benefit of creditors, marshaling of assets and liabilities or any
bankruptcy, insolvency or similar proceedings of us, the holders of all senior
and subordinated debt will first be entitled to receive payment in full of all
amounts due or to become due thereon before the holders of the junior
subordinated debt trust securities will be entitled to receive any payment in
respect of the principal of, premium, if any, or interest on the junior
subordinated debt trust securities.
No payments on account of principal, premium, if any, or interest in
respect of the junior subordinated debt trust securities may be made by us if
there shall have occurred and be continuing a default in any payment with
respect to senior and subordinated debt or during certain periods when an
event of default under certain senior and subordinated debt permits the
lenders thereunder to accelerate the maturity of such senior and subordinated
debt. In addition, during the continuance of any other event of default (other
than a payment 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 holders of such
designated senior and subordinated debt or from an agent of such holders, no
payments on account of principal, premium, if any, or interest in respect of
the junior subordinated debt trust securities may be made by us during a
period (the "Payment Blockage Period") commencing on the date of delivery of
such notice and ending 179 days thereafter (unless the Payment Blockage Period
shall be terminated by written notice to the Trustee from the holders of the
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 junior
subordinated debt trust securities 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.
By reason of this subordination, in the event of insolvency, funds that
would otherwise be payable to holders of junior subordinated debt trust
securities will be paid to the holders of our senior and subordinated debt to
the extent necessary to pay that debt in full, and we may be unable to meet
fully our obligations with respect to the junior subordinated debt trust
securities.
"Debt" is defined to mean, with respect to any person at any date of
determination (without duplication):
o all indebtedness for borrowed money;
o all obligations evidenced by bonds, debentures, notes or other
similar instruments;
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o all obligations in respect of letters of credit or bankers'
acceptance or other similar instruments (or reimbursement
obligations with respect thereto);
o all obligations to pay the deferred purchase price of property or
services, except trade payables;
o all obligations as lessee under capitalized leases;
o all Debt of others secured by a lien on any asset of the person,
whether or not the Debt is assumed by that person; provided that,
for purposes of determining the amount of any Debt of the type
described in this clause, if recourse with respect to that Debt is
limited to that asset, the amount of that Debt shall be limited to
the lesser of the fair market value of the asset or the amount of
the Debt;
o all Debt of others guaranteed by that person to the extent that Debt
is guaranteed by such person;
o all redeemable stock valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid
dividends; and,
o to the extent not otherwise included in this definition, all
obligations under currency agreements and interest rate agreements.
"Designated Senior Debt" is defined to mean:
o Debt under the Credit Agreement dated as of August 2, 1996 (the
"Credit Agreement") among The AES Corporation, the banks named on
the signature pages thereof and the Morgan Guaranty Trust Company of
New York, as agent for the banks, as such Credit Agreement has been
and may be amended, restated, supplemented or otherwise modified
from time to time; and
o Debt constituting Senior Debt which, at the time of its determination
o has an aggregate principal amount of at least $30 million; and
o is specifically designated by us as "Designated Senior Debt."
"Senior and Subordinated Debt" is defined to mean the principal of (and
premium, if any) and interest on all our Debt whether created, incurred or
assumed before, on or after the date of the Indenture; provided that such
Senior and Subordinated Debt shall not include
o Debt to any Affiliate,
o Debt that, when incurred and without respect to any election under
Section 1111(b) of Title 11, U.S. Code, was without recourse,
o any other Debt which by the terms of the instrument creating or
evidencing the same are specifically designated as not being senior
in right of payment to the junior subordinated debt trust
securities, and in particular the junior subordinated debt trust
securities shall rank pari passu with all other debt trust
securities and guarantees issued to any trust, partnership or other
entity affiliated with us which is a financing vehicle of us in
connection with an issuance of preferred securities by such
financing entity, and
o our redeemable stock.
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Indenture Events of Default
The Indenture provides that any one or more of the following described
events, which has occurred and is continuing, constitutes an "Indenture Event
of Default" with respect to each series of junior subordinated debt trust
securities:
o failure for 30 days to pay interest on the junior subordinated debt
trust securities of that series when due; provided that a valid
extension of the interest payment period by us shall not constitute
a default in the payment of interest for this purpose;
o failure to pay principal of or premium, if any, on the junior
subordinated debt trust securities of such series when due whether
at maturity, upon redemption, by declaration or otherwise;
o failure to observe or perform any other covenant contained in the
Indenture with respect to such series for 90 days after written
notice to us from the Indenture Trustee or the holders of at least
25% in principal amount of the outstanding junior subordinated debt
trust securities of such series; or
o certain events in bankruptcy, insolvency or reorganization of AES.
In each and every such case, unless the principal of all the junior
subordinated debt trust securities of that series shall have already become
due and payable, either the Indenture Trustee or the holders of not less than
25% in aggregate principal amount of the junior subordinated debt trust
securities of that series then outstanding, by notice in writing to us (and to
the Indenture Trustee if given by such holders), may declare the principal of
all the junior subordinated debt trust securities 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.
The holders of a majority in aggregate outstanding principal amount of
the junior subordinated debt trust securities of that series have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Indenture Trustee. The Indenture Trustee or the holders of
not less than 25% in aggregate outstanding principal amount of the junior
subordinated debt trust securities of that series may declare the principal
due and payable immediately upon an Indenture Event of Default with respect to
such series, but the holders of a majority in aggregate outstanding principal
amount of junior subordinated debt trust securities of such series may annul
such declaration and waive the default if the default has been cured and a sum
sufficient to pay all matured installments of interest and principal otherwise
than by acceleration and any premium has been deposited with the Indenture
Trustee.
The holders of a majority in aggregate outstanding principal amount of
the junior subordinated debt trust securities of that series may, on behalf of
the holders of all the junior subordinated debt trust securities of that
series, waive any past default, except a default in the payment of principal,
premium, if any, or interest (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal otherwise
than by acceleration and any premium has been deposited with the Indenture
Trustee) or a call for redemption of junior subordinated debt trust
securities. We are required to file annually with the Indenture Trustee a
certificate as to whether or not we are in compliance with all the conditions
and covenants under the Indenture.
If junior subordinated debt trust securities are issued to an AES Trust
in connection with the issuance of Trust Securities of such AES Trust, then
under the applicable Declaration an Indenture Event of Default with respect to
such series of junior subordinated debt trust securities will constitute a
Declaration Event of Default.
Modification of the Indenture
The Indenture contains provisions permitting us and the Indenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of the outstanding junior subordinated debt trust securities
of each series affected, to modify the Indenture or any supplemental indenture
affecting the rights of the holders of such junior
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subordinated debt trust securities; provided that no such modification may,
without the consent of the holder of each outstanding junior subordinated debt
trust security affected thereby,
o extend the fixed maturity of any junior subordinated debt trust
securities of any series, reduce the principal amount thereof,
reduce the rate or extend the time of payment of interest thereon,
reduce any premium payable upon the redemption thereof, without the
consent of the holder of each junior subordinated debt trust
security so affected or
o reduce the percentage of junior subordinated debt trust securities,
the holders of which are required to consent to any such
modification, without the consent of the holders of each junior
subordinated debt trust security then outstanding and affected
thereby.
Book-entry and Settlement
If any junior subordinated debt preferred securities of a series are
represented by one or more global securities (each, a "Global Security"), the
applicable prospectus supplement will describe the circumstances, if any,
under which beneficial owners of interests in any such Global Security may
exchange such interests for junior subordinated debt trust securities of such
series and of like tenor and principal amount in any authorized form and
denomination. Principal of and any premium and interest on a Global Security
will be payable in the manner described in the applicable prospectus
supplement.
The specific terms of the depositary arrangement with respect to any
portion of a series of junior subordinated debt trust securities to be
represented by a Global Security will be described in the applicable
prospectus supplement.
Consolidation, Merger and Sale
The Indenture will provide that we may 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 may not permit any person to merge into or
consolidate with us unless
o either AES will be the resulting or surviving entity or any
successor or purchaser is a corporation organized under the laws of
the United States of America, any State or the District of Columbia,
and any such successor or purchaser expressly assumes our
obligations under the Indenture and
o immediately after giving effect to the transaction no Event of Default
shall have occurred and be continuing.
Defeasance and Discharge
Under the terms of the Indenture, we will be discharged from any and all
obligations in respect of the junior subordinated debt trust securities of a
series (except in each case for certain obligations to register the transfer
or exchange of such junior subordinated debt trust securities, replace stolen,
lost or mutilated junior subordinated debt trust securities of that series,
maintain paying agencies and hold moneys for payment in trust) if
o we irrevocably deposit with the Indenture Trustee cash or U.S.
Government Obligations, as trust funds in an amount certified to be
sufficient to pay at maturity (or upon redemption) the principal of,
premium, if any, and interest on all outstanding junior subordinated
debt trust securities of such series;
o this deposit will not result in a breach or violation of, or
constitute a default under, any agreement or instrument to which we
are a party or by which we are bound;
o we deliver to the Indenture Trustee an opinion of counsel to the
effect that the holders of the junior subordinated debt trust
securities of that series will not recognize income, gain or loss
for United States
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federal income tax purposes as a result of that defeasance and that
defeasance will not otherwise alter holders' United States federal
income tax treatment of principal, premium and interest payments on
those junior subordinated debt trust securities of that series (such
opinion must be based on a ruling of the Internal Revenue Service or
a change in United States federal income tax law occurring after the
date of that junior subordinated debt trust securities indenture,
since such a result would not occur under current tax law);
o we have delivered to the Indenture Trustee an Officer's Certificate
and an opinion of counsel, each stating that all conditions
precedent provided for relating to the defeasance contemplated by
such provision have been complied with; and
o no event or condition shall exist that, pursuant to the
subordination provisions applicable to such series, would prevent us
from making payments of principal of, premium, if any, and interest
on the junior subordinated debt trust securities of such series at
the date of the irrevocable deposit referred to above.
Governing Law
The Indenture and the junior subordinated debt trust securities will be
governed by the laws of the State of New York.
Information Concerning the Indenture Trustee
The Indenture Trustee, prior to default, undertakes to perform only such
duties as are specifically set forth in the Indenture and, after default,
shall exercise the same degree of care as a prudent individual would exercise
in the conduct of his or her own affairs. Subject to such provision, the
Indenture Trustee is under no obligation to exercise any of the powers vested
in it by the junior subordinated debt trust securities indenture at the
request of any holder of junior subordinated debt trust securities, unless
offered reasonable indemnity by such holder against the costs, expenses and
liabilities that might be incurred thereby. The Indenture Trustee is not
required to expend or risk its own funds or otherwise incur personal financial
liability in the performance of its duties if the Trustee reasonably believes
that repayment or adequate indemnity is not reasonably assured to it.
AES and our subsidiaries maintain ordinary banking and trust
relationships with The First National Bank of Chicago and its affiliates.
Miscellaneous
We will have the right at all times to assign any of our rights or
obligations under the Indenture to a direct or indirect wholly-owned
subsidiary of ours; provided that, in the event of any such assignment, we
will remain jointly and severally liable for all such obligations. Subject to
the foregoing, the Indenture will be binding upon and inure to the benefit of
the parties thereto and their respective successors and assigns. The Indenture
provides that it may not otherwise be assigned by the parties thereto other
than by us to a successor or purchaser pursuant to a consolidation, merger or
sale permitted by the Indenture.
PLAN OF DISTRIBUTION
We may sell any series of junior subordinated debt trust securities and
the AES Trusts may sell the preferred securities being offered hereby in any
of three ways (or in any combination thereof):
o through underwriters or dealers;
o directly to a limited number of purchasers or to a single purchaser;
or
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o through agents.
The prospectus supplement with respect to any offered securities will set
forth the terms of the offering of such offered securities, including the name
or names of any underwriters, dealers or agents and the respective amounts of
such offered securities underwritten or purchased by each of them, the initial
public offering price of such offered securities and the proceeds to us from
such sale, any discounts, commissions or other items constituting compensation
from us and any discounts, commissions or concessions allowed or reallowed or
paid to dealers and any securities exchanges on which these offered securities
may be listed. Any public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
If underwriters are used in the sale of any offered securities, such
offered securities will be acquired by the underwriters for their own account
and may be resold from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices
determined at the time of sale. These offered securities may be either offered
to the public through underwriting syndicates represented by managing
underwriters, or directly by underwriters. Unless otherwise set forth in the
prospectus supplement, the obligations of the underwriters to purchase these
offered securities will be subject to certain conditions precedent and the
underwriters will be obligated to purchase all of such offered securities if
any are purchased.
Offered securities may be sold directly by us or through agents
designated by us from time to time. Any agent involved in the offer or sale of
offered securities in respect of which this prospectus is delivered will be
named, and any commissions payable by us to such agent will be set forth, in
the prospectus supplement. Unless otherwise indicated in the prospectus
supplement, any such agent will be acting on a best efforts basis for the
period of its appointment.
If so indicated in the prospectus supplement, we will authorize
underwriters, dealers or agents to solicit offers by certain purchasers to
purchase offered securities from us at the public offering price set forth in
the prospectus supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date in the future. These contracts will
be subject only to those conditions set forth in the prospectus supplement,
and the prospectus supplement will set forth the commission payable for
solicitation of such contracts.
Agents and underwriters may be entitled under agreements entered into
with us to indemnification by us against certain civil liabilities, including
liabilities under the Securities Act, or to contribution with respect to
payments which the agents or underwriters may be required to make in respect
thereof. Agents and underwriters may be customers of, engage in transactions
with, or perform services for us in the ordinary course of business.
LEGAL MATTERS
Unless otherwise indicated in the applicable prospectus supplement,
certain matters of Delaware law relating to the validity of the preferred
securities will be passed upon by Richards, Layton & Finger, Wilmington,
Delaware. The legality of the junior subordinated debt trust securities and
the preferred securities offered hereby will be passed upon for us by Davis
Polk & Wardwell, New York, New York.
EXPERTS
The financial statements as of December 31, 1998 and 1997 and for each of
the three years in the period ended December 31, 1998, incorporated in this
prospectus by reference from The AES Corporation's Current Report on Form 8-K
dated March 18, 1999, and the related financial statement schedules
incorporated in this prospectus by reference from The AES Corporation's Annual
Report on Form 10-K for the year ended December 31, 1998, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports, which
are incorporated herein by reference, and have been so incorporated in
reliance upon the reports of such firm given upon their authority as experts in
accounting and auditing.
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===============================================================================
$2,500,000,000
THE AES CORPORATION
Junior Subordinated Debt Securities
AES Trust III
AES Trust IV
AES Trust V
[LOGO]
-----------------------
PROSPECTUS
-----------------------
, 1999
===============================================================================
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the expenses in connection with the
issuance and distribution of the securities being registered, other than
underwriting discounts and commissions. All of the amounts shown are
estimates, except the SEC registration fee.
SEC Registration filing fee..........................................$ 695,000
Printing and engraving expenses......................................$ 25,000
Blue sky fees and expenses (including counsel).......................$ 10,000
Legal fees and expenses..............................................$ 100,000
Fees of accountants..................................................$ 25,000
Fees of trustee......................................................$ 15,000
Total.............................................................$ 870,000
=========
Item 15. Indemnification of Directors and Officers
Under the Company's By-Laws, and in accordance with Section 145 of the
Delaware General Corporation Law ("GCL"), the Company shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than any action or suit by or
in the right of the Company to procure a judgment in its favor, which is
hereinafter referred to as a "derivative action") by reason of the fact that
such person is or was a director, officer or employee of the Company, or is or
was serving in such capacity or as an agent at the request of the Company for
another entity, to the full extent authorized by Delaware law, against
expenses (including, but not limited to, attorneys' fees), judgments, fines
and amounts actually and reasonably incurred in connection with the defense or
settlement of such action, suit or proceeding if such person acted in good
faith and in a manner the person reasonably believed to be in or not opposed
to the best interests of the Company, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe was unlawful. Agents of the
Company may be similarly indemnified, at the discretion of the Board of
Directors.
Under Section 145 of the GCL, a similar standard of care is applicable in
the case of derivative actions, except that indemnification only extends to
expenses (including attorneys' fees) incurred in connection with the defense
or settlement of such an action and then, where the person is adjudged to be
liable to the Company, only if and to the extent that the Court of Chancery of
the State of Delaware or the court in which such action was brought determines
that such person is fairly and reasonably entitled to such indemnity and only
for such expenses as the court shall deem proper.
Pursuant to Company's By-Laws, a person eligible for indemnification may
have the expenses incurred in connection with any matter described above paid
in advance of a final disposition by the Company. However, such advances will
only be made upon the delivery of an undertaking by or on behalf of the
indemnified person to repay all amounts so advanced if it is ultimately
determined that such person is not entitled to indemnification.
In addition, under the Company's By-Laws, the Company may purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Company or of another corporation against any
liability asserted against and incurred by such person in such capacity, or
arising out of the person's status as such
II-1
<PAGE>
whether or not the Company would have the power or the obligation to indemnify
such person against such liability under the provisions of the Company's
By-Laws.
Item 16. Exhibits.
Exhibits Description of Exhibit
- -------- ----------------------
1.1 Form of Underwriting Agreement (Debt Securities) (incorporated by
reference to Exhibit 1.1 of Amendment No. 1 to Registration
Statement No. 333-15487 on Form S-3 filed on November 18, 1996)
1.2 Form of Underwriting Agreement (Common Stock and Preferred Stock)
(incorporated by reference to Exhibit 1.2 of Amendment No. 1 to
Registration Statement No. 333-15487 on Form S-3 filed on
November 18, 1996)
1.3 Form of Underwriting Agreement (Stock Purchase Contracts and Stock
Purchase Units) (incorporated by reference to Exhibit 1.3 of
Amendment No. 1 to Registration Statement No. 333-15487 on Form
S-3 filed on November 18, 1996)
1.4 Form of Underwriting Agreement (Preferred Securities)
(incorporated by reference to Exhibit 1.4 of Registration
Statement No. 333-39857 on Form S-3 filed on November 10, 1997)
4.1 Senior Debt Securities Indenture dated as of December 8, 1998
between the Company and The First National Bank of Chicago
4.2 Senior Subordinated Debt Securities Indenture dated as of July 1,
1996 between the Company and The First National Bank of Chicago
4.3 Junior Subordinated Debt Securities Indenture dated as of August
10, 1998 between the Company and The First National Bank of
Chicago (incorporated by reference to Exhibit 4.15 to the
Quarterly Report on Form 10-Q of the Registrant for the quarterly
period ended June 30, 1998 filed August 14, 1998)
4.4 Junior Subordinated Debt Trust Securities Indenture dated as of
March 1, 1997 between the Company and The First National Bank of
Chicago (incorporated by reference to Exhibit 4.1 to the
Registration Statement on Form S-3 (Registration No. 333-46189)
filed February 12, 1998)
4.5 Declaration of Trust of AES Trust III (incorporated by reference
to Exhibit 4.14 of Amendment No. 1 to Registration Statement No.
333-15487 on Form S-3 filed on November 18, 1996)
4.6 Certificate of Trust of AES Trust III (incorporated by reference
to Exhibit 4.15 of Amendment No. 1 to Registration Statement No.
333-15487 on Form S-3 filed on November 18, 1996)
4.7 Form of Amended and Restated Declaration of Trust for AES Trust
III, AES Trust IV and AES Trust V (incorporated by reference to
Exhibit 4.9 of Amendment No. 2 to Registration Statement No. 333-
15487 on Form S-3 filed on November 27, 1996)
4.8 Form of Preferred Security (included in Exhibit 4.7)
4.9 Form of Supplemental Indenture to be used in connection with
issuance of Junior Subordinated Debt Trust Securities and
Preferred Securities (incorporated by reference to Exhibit 4.11
of Registration Statement No. 333-15487 on Form S-3 filed on
November 4, 1996)
4.10 Form of Junior Subordinated Debt Trust Security (included in
Exhibit 4.9)
4.11 Form of Preferred Securities Guarantee with respect to Preferred
Securities (incorporated by reference to Exhibit 4.13 of
Amendment No. 2 to Registration Statement No. 333-15487 on Form
S-3 filed on November 27, 1996)
4.12 Declaration of Trust of AES Trust IV (incorporated by reference to
Exhibit 4.12 of Registration Statement No. 333-39857 on Form S-3
filed on November 10, 1997)
4.13 Certificate of Trust of AES Trust IV (incorporated by reference to
Exhibit 4.13 of Registration Statement No. 333-39857 on Form S-3
filed on November 10, 1997)
4.14 Declaration of Trust of AES Trust V (incorporated by reference to
Exhibit 4.14 of Registration Statement No. 333-39857 on Form S-3
filed on November 10, 1997)
II-2
<PAGE>
Exhibits Description of Exhibit
- -------- ----------------------
4.15 Certificate of Trust of AES Trust V (incorporated by reference to
Exhibit 4.14 of Registration Statement No. 333-39857 on Form S-3
filed on November 10, 1997)
4.16 Form of Purchase Contract Agreement (incorporated by reference to
Exhibit 4.16 of Amendment No. 1 to Registration Statement No.
333-15487 on Form S-3 filed on November 18, 1996)
4.17 Form of Pledge Agreement (incorporated by reference to Exhibit
4.17 of Amendment No. 1 to Registration Statement No. 333-15487 on
Form S-3 filed on November 18, 1996)
4.18 Form of Warrant Agreement for Debt Securities+
4.19 Form of Warrant Certificate for Debt Securities+
4.20 Form of Warrant Agreement for Preferred Stock+
4.21 Form of Warrant Certificate for Preferred Stock+
4.22 Form of Warrant Agreement for Common Stock+
4.23 Form of Warrant Certificate for Common Stock+
4.24 Form of Deposit Agreement for Depositary Shares+
4.25 Form of Depositary Receipt+
5.1 Opinion of Davis Polk & Wardwell +
5.2 Opinion of Delaware counsel +
12.1 Computation of ratio of earnings to fixed charges
23.1 Consent of Deloitte & Touche LLP
23.3 Consent of Davis Polk & Wardwell (included in Exhibit 5.1)
23.4 Consent of Delaware counsel (included in Exhibit 5.2)
24.1 Powers of Attorney for the Company
24.2 Powers of Attorney for the Company as sponsor, to sign the
Registration Statement on behalf of AES Trust III, AES Trust IV
and AES Trust V (included in Exhibits 4.5, 4.7 and 4.14)
25.1 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as Trustee,
under the Senior Debt Securities Indenture
25.2 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Trustee, under
the Senior Subordinated Debt Securities Indenture (included in
Exhibit 25.1)
25.3 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Trustee, under
the Junior Subordinated Debt Securities Indenture (included in
Exhibit 25.1)
25.4 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as Trustee,
with respect to the Junior Subordinated Debt Trust Securities
Indenture (included in Exhibit 25.1)
25.5 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as Trustee,
with respect to the Preferred Securities of AES Trust III
25.6 Statement of Eligibility under The Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as Trustee,
with respect to the Preferred Securities of AES Trust IV
25.7 Statement of Eligibility under The Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as Trustee,
with respect to the Preferred Securities of AES Trust V
25.8 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as Trustee,
with respect to the Preferred Securities Guarantee of the Company
with respect to the Preferred Securities of AES Trust III (included
in Exhibit 25.1)
25.9 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as Trustee,
with respect to the Preferred Securities Guarantee of the Company
with respect to the Preferred Securities of AES Trust IV (included
in Exhibit 25.1)
25.10 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as Trustee,
with respect to the Preferred Securities Guarantee of the Company
with respect to the Preferred Securities of AES Trust V (included
in Exhibit 25.1)
- ---------------
+ To be filed by Amendment.
II-3
<PAGE>
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made of the securities registered hereby, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
this registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that the undertakings set forth in paragraphs (1)(i) and
(1)(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") that are incorporated by reference in this registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions described under Item 15 above,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the registrar of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that is has reasonable grounds to believe that it meets
all of the requirements for filing on Forms S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
hereunto duly authorized, in the City of Arlington, State of Virginia on June
30, 1999.
THE AES CORPORATION
By: /s/ Dennis W. Bakke
----------------------------------
Dennis W. Bakke
President and Chief Executive Officer
The Registrant and each person whose signature appears below constitutes
and appoints Dennis W. Bakke and William R. Luraschi and any agent for service
named in this Registration Statement and each of them, his, her or its true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him, her or it and in his, her, or its name, place and
stead, in any and all capacities, to sign and file any and all amendments
(including post-effective amendments) to this Registration Statement, to sign
any related registration statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, and to file the same with all exhibits thereto, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes as he, she, or it 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 substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the dates indicated.
<TABLE>
Signature Title Date
--------- ----- ----
<S> <C> <C>
*
---------------------------------- Chairman of the Board June 30, 1999
Roger W. Sant
/s/ Dennis W. Bakke
---------------------------------- President, Chief Executive Officer and June 30, 1999
Dennis W. Bakke Director (Principal Executive Officer)
*
---------------------------------- Director June 30, 1999
Alice F. Emerson
II-5
<PAGE>
*
---------------------------------- Director June 30, 1999
Robert F. Hemphill, Jr.
*
---------------------------------- Director June 30, 1999
Frank Jungers
*
---------------------------------- Director June 30, 1999
John H. McArthur
*
---------------------------------- Director June 30, 1999
Hazel O'Leary
*
---------------------------------- Director June 30, 1999
Thomas I. Unterberg
*
---------------------------------- Director June 30, 1999
Robert H. Waterman, Jr.
/s/ Barry J. Sharp
---------------------------------- Vice President and Chief Financial June 30, 1999
Barry J. Sharp Officer (Principal Financial and
Accounting Officer)
By: /s/ William R. Luraschi
--------------------------------------- June 30, 1999
William R. Luraschi
Attorney-in-Fact
</TABLE>
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, AES Trust
III, AES Trust IV and AES Trust V each certifies that it has reasonable
grounds to believe that it meets all of the requirements for filing on Forms
S-3 and has duly caused this Registration Statement to be signed on its behalf
by the undersigned, hereunto duly authorized, in the City of Arlington, State
of Virginia on June 30, 1999.
AES TRUST III
By: The AES Corporation, as Sponsor
By: /s/ William R. Luraschi
------------------------------------
Name: William R. Luraschi
Title: General Counsel and Secretary
AES TRUST IV
By: The AES Corporation, as Sponsor
By: /s/ William R. Luraschi
------------------------------------
Name: William R. Luraschi
Title: General Counsel and Secretary
AES TRUST V
By: The AES Corporation, as Sponsor
By: /s/ William R. Luraschi
------------------------------------
Name: William R. Luraschi
Title: General Counsel and Secretary
II-7
<PAGE>
<TABLE>
EXHIBIT INDEX
Sequentially
Exhibits Description of Exhibit Numbered Page
- -------- ---------------------- -------------
<S> <C> <C>
1.1 Form of Underwriting Agreement (Debt Securities) (incorporated by
reference to Exhibit 1.1 of Amendment No. 1 to Registration
Statement No. 333-15487 on Form S-3 filed on November 18, 1996)
1.2 Form of Underwriting Agreement (Common Stock and Preferred Stock)
(incorporated by reference to Exhibit 1.2 of Amendment No. 1 to
Registration Statement No. 333-15487 on Form S-3 filed on
November 18, 1996)
1.3 Form of Underwriting Agreement (Stock Purchase Contracts and Stock
Purchase Units) (incorporated by reference to Exhibit 1.3 of
Amendment No. 1 to Registration Statement No. 333-15487 on Form
S-3 filed on November 18, 1996)
1.4 Form of Underwriting Agreement (Preferred Securities)
(incorporated by reference to Exhibit 1.4 of Registration
Statement No. 333-39857 on Form S-3 filed on November 10, 1997)
4.1 Senior Debt Securities Indenture dated as of December 8, 1998
between the Company and The First National Bank of Chicago
4.2 Senior Subordinated Debt Securities Indenture dated as of July 1,
1996 between the Company and The First National Bank of Chicago
4.3 Junior Subordinated Debt Securities Indenture dated as of August
10, 1998 between the Company and The First National Bank of
Chicago (incorporated by reference to Exhibit 4.15 to the
Quarterly Report on Form 10-Q of the Registrant for the quarterly
period ended June 30, 1998 filed August 14, 1998)
4.4 Junior Subordinated Debt Trust Securities Indenture dated as of
March 1, 1997 between the Company and The First National Bank of
Chicago (incorporated by reference to Exhibit 4.1 to the
Registration Statement on Form S-3 (Registration No. 333-46189)
filed February 12, 1998)
4.5 Declaration of Trust of AES Trust III (incorporated by reference
to Exhibit 4.14 of Amendment No. 1 to Registration Statement No.
333-15487 on Form S-3 filed on November 18, 1996)
4.6 Certificate of Trust of AES Trust III (incorporated by reference
to Exhibit 4.15 of Amendment No. 1 to Registration Statement No.
333-15487 on Form S-3 filed on November 18, 1996)
4.7 Form of Amended and Restated Declaration of Trust for AES Trust
III, AES Trust IV and AES Trust V (incorporated by reference to
Exhibit 4.9 of Amendment No. 2 to Registration Statement No. 333-
15487 on Form S-3 filed on November 27, 1996)
4.8 Form of Preferred Security (included in Exhibit 4.7)
4.9 Form of Supplemental Indenture to be used in connection with
issuance of Junior Subordinated Debt Trust Securities and
Preferred Securities (incorporated by reference to Exhibit 4.11
of Registration Statement No. 333-15487 on Form S-3 filed on
November 4, 1996)
4.10 Form of Junior Subordinated Debt Trust Security (included in
Exhibit 4.9)
4.11 Form of Preferred Securities Guarantee with respect to Preferred
Securities (incorporated by reference to Exhibit 4.13 of
Amendment No. 2 to Registration Statement No. 333-15487 on Form
S-3 filed on November 27, 1996)
4.12 Declaration of Trust of AES Trust IV (incorporated by reference to
Exhibit 4.12 of Registration Statement No. 333-39857 on Form S-3
filed on November 10, 1997)
4.13 Certificate of Trust of AES Trust IV (incorporated by reference to
Exhibit 4.13 of Registration Statement No. 333-39857 on Form S-3
filed on November 10, 1997)
4.14 Declaration of Trust of AES Trust V (incorporated by reference to
Exhibit 4.14 of Registration Statement No. 333-39857 on Form S-3
filed on November 10, 1997)
4.15 Certificate of Trust of AES Trust V (incorporated by reference to
Exhibit 4.14 of Registration Statement No. 333-39857 on Form S-3
filed on November 10, 1997)
4.16 Form of Purchase Contract Agreement (incorporated by reference to
Exhibit 4.16 of Amendment No. 1 to Registration Statement No.
333-15487 on Form S-3 filed on November 18, 1996)
4.17 Form of Pledge Agreement (incorporated by reference to Exhibit
4.17 of Amendment No. 1 to Registration Statement No. 333-15487 on
Form S-3 filed on November 18, 1996)
4.18 Form of Warrant Agreement for Debt Securities+
4.19 Form of Warrant Certificate for Debt Securities+
4.20 Form of Warrant Agreement for Preferred Stock+
4.21 Form of Warrant Certificate for Preferred Stock+
4.22 Form of Warrant Agreement for Common Stock+
4.23 Form of Warrant Certificate for Common Stock+
4.24 Form of Deposit Agreement for Depositary Shares+
4.25 Form of Depositary Receipt+
5.1 Opinion of Davis Polk & Wardwell +
5.2 Opinion of Delaware counsel +
12.1 Computation of ratio of earnings to fixed charges
23.1 Consent of Deloitte & Touche LLP
23.3 Consent of Davis Polk & Wardwell (included in Exhibit 5.1)
23.4 Consent of Delaware counsel (included in Exhibit 5.2)
24.1 Powers of Attorney for the Company
24.2 Powers of Attorney for the Company as sponsor, to sign the
Registration Statement on behalf of AES Trust III, AES Trust IV
and AES Trust V (included in Exhibits 4.5, 4.7 and 4.14)
25.1 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as Trustee,
under the Senior Debt Securities Indenture
25.2 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Trustee, under
the Senior Subordinated Debt Securities Indenture (included in
Exhibit 25.1)
25.3 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Trustee, under
the Junior Subordinated Debt Securities Indenture (included in
Exhibit 25.1)
- ---------------
+ To be filed by Amendment.
II-8
<PAGE>
Sequentially
Exhibits Description of Exhibit Numbered Page
- -------- ---------------------- -------------
25.4 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as Trustee,
with respect to the Junior Subordinated Debt Trust Securities
Indenture (included in Exhibit 25.1)
25.5 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as Trustee,
with respect to the Preferred Securities of AES Trust III
25.6 Statement of Eligibility under The Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as Trustee,
with respect to the Preferred Securities of AES Trust IV
25.7 Statement of Eligibility under The Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as Trustee,
with respect to the Preferred Securities of AES Trust V
25.8 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as Trustee,
with respect to the Preferred Securities Guarantee of the Company
with respect to the Preferred Securities of AES Trust III (included
in Exhibit 25.1)
25.9 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as Trustee,
with respect to the Preferred Securities Guarantee of the Company
with respect to the Preferred Securities of AES Trust IV (included
in Exhibit 25.1)
25.10 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as Trustee,
with respect to the Preferred Securities Guarantee of the Company
with respect to the Preferred Securities of AES Trust V (included
in Exhibit 25.1)
- ---------------
+ To be filed by Amendment.
* Incorporated by reference to other documents (see Item 16) and not included
herein.
</TABLE>
II-9
EXHIBIT 4.2
THE AES CORPORATION
as the Company
and
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
----------------------------------
Subordinated Indenture
Dated as of July 1, 1996
----------------------------------
TABLE OF CONTENTS(*)
(*) Note: The Table of Contents shall not for any purposes be deemed
to be a part of the Indenture.
Page
----
RECITALS OF THE COMPANY
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions................................................ 1
SECTION 1.2 Other Definitions.......................................... 7
SECTION 1.3 Incorporation by Reference of Trust Indenture Act.......... 7
SECTION 1.4 Rules of Construction...................................... 8
ARTICLE 2
THE SECURITIES
SECTION 2.1 Form and Dating............................................ 8
SECTION 2.2 Execution and Authentication............................... 8
SECTION 2.3 Amount Unlimited; Issuable in Series....................... 10
SECTION 2.4 Denomination and Date of Securities; Payments of Interest.. 14
SECTION 2.5 Registrar and Paying Agent; Agents Generally............... 14
SECTION 2.6 Paying Agent to Hold Money in Trust........................ 15
SECTION 2.7 Transfer and Exchange...................................... 16
SECTION 2.8 Replacement Securities..................................... 19
SECTION 2.9 Outstanding Securities..................................... 20
SECTION 2.10 Temporary Securities....................................... 21
SECTION 2.11 Cancellation............................................... 21
SECTION 2.12 CUSIP Numbers.............................................. 22
SECTION 2.13 Defaulted Interest......................................... 22
SECTION 2.14 Series May Include Tranches................................ 22
ARTICLE 3
REDEMPTION
SECTION 3.1 Applicability of Article................................... 23
SECTION 3.2 Notice of Redemption; Partial Redemptions.................. 23
SECTION 3.3 Payment of Securities Called for Redemption................ 25
SECTION 3.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption................................... 26
SECTION 3.5 Mandatory and Optional Sinking Funds....................... 27
ARTICLE 4
COVENANTS
SECTION 4.1 Payment of Securities...................................... 30
SECTION 4.2 Maintenance of Office or Agency............................ 31
SECTION 4.3 Securityholders' Lists..................................... 32
SECTION 4.4 Certificate to Trustee..................................... 32
SECTION 4.5 Reports by the Company..................................... 33
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.1 When Company May Merge, Etc................................ 33
SECTION 5.2 Successor Substituted...................................... 34
ARTICLE 6
DEFAULT AND REMEDIES
SECTION 6.1 Events of Default........................................... 34
SECTION 6.2 Acceleration................................................ 35
SECTION 6.3 Other Remedies.............................................. 37
SECTION 6.4 Waiver of Past Defaults..................................... 37
SECTION 6.5 Control by Majority......................................... 38
SECTION 6.6 Limitation on Suits......................................... 38
SECTION 6.7 Rights of Holders to Receive Payment........................ 39
SECTION 6.8 Collection Suit by Trustee.................................. 39
SECTION 6.9 Trustee May File Proofs of Claim............................ 39
SECTION 6.10 Application of Proceeds..................................... 40
SECTION 6.11 Restoration of Rights and Remedies.......................... 41
SECTION 6.12 Undertaking for Costs....................................... 41
SECTION 6.13 Rights and Remedies Cumulative.............................. 42
SECTION 6.14 Delay or Omission Not Waiver................................ 42
ARTICLE 7
TRUSTEE
SECTION 7.1 General.................................................... 42
SECTION 7.2 Certain Rights of Trustee.................................. 42
SECTION 7.3 Individual Rights of Trustee............................... 44
SECTION 7.4 Trustee's Disclaimer....................................... 45
SECTION 7.5 Notice of Default.......................................... 45
SECTION 7.6 Reports by Trustee to Holders.............................. 46
SECTION 7.7 Compensation and Indemnity................................. 46
SECTION 7.8 Replacement of Trustee..................................... 47
SECTION 7.9 Successor Trustee by Merger, Etc........................... 48
SECTION 7.10 Eligibility................................................ 49
SECTION 7.11 Money Held in Trust........................................ 49
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS.
SECTION 8.1 Satisfaction and Discharge of Indenture.................... 49
SECTION 8.2 Application by Trustee of Funds Deposited for Payment of
Securities................................................. 50
SECTION 8.3 Repayment of Moneys Held by Paying Agent................... 51
SECTION 8.4 Return of Moneys Held by Trustee and Paying Agent Unclaimed
for Two Years.............................................. 51
SECTION 8.5 Defeanance and Discharge of Indenture...................... 52
SECTION 8.6 Defeasance of Certain Obligations.......................... 53
SECTION 8.7 Reinstatement.............................................. 55
ARTICLE 9
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1 Without Consent of Holders................................. 55
SECTION 9.2 With Consent of Holders.................................... 56
SECTION 9.3 Revocation and Effect of Consent........................... 57
SECTION 9.4 Notation on or Exchange of Securities...................... 58
SECTION 9.5 Trustee to Sign Amendments, Etc............................ 58
SECTION 9.6 Conformity with Trust Indenture Act........................ 59
ARTICLE 10
MISCELLANEOUS
SECTION 10.1 Trust Indenture Act of 1939................................ 59
SECTION 10.2 Notices.................................................... 59
SECTION 10.3 Certificate and Opinion as to Conditions Precedent......... 61
SECTION 10.4 Statements Required in Certificate or Opinion.............. 61
SECTION 10.5 Evidence of Ownership...................................... 61
SECTION 10.6 Rules by Trustee, Paying Agent or Registrar................ 62
SECTION 10.7 Payment Date Other Than a Business Day..................... 62
SECTION 10.8 Governing Law.............................................. 63
SECTION 10.9 No Adverse Interpretation of Other Agreements.............. 63
SECTION 10.10 Successors................................................. 63
SECTION 10.11 Duplicate Originals........................................ 63
SECTION 10.12 Separability............................................... 63
SECTION 10.13 Table of Contents, Headings, Etc........................... 63
SECTION 10.14 Incorporators, Stockholders, Officers and Directors of
Company Exempt from Individual Liability................... 63
SECTION 10.15 Judgment Currency.......................................... 64
ARTICLE 11
SUBORDINATION OF SECURITIES
SECTION 11.1 Agreement to Subordinate................................... 64
SECTION 11.2 Payments to Securityholders................................ 65
SECTION 11.3 Subrogation of Securities.................................. 67
SECTION 11.4 Authorization by Securityholders........................... 68
SECTION 11.5 Notice to Trustee.......................................... 68
SECTION 11.6 Trustee's Relation to Senior Debt.......................... 70
SECTION 11.7 No Impairment of Subordination............................. 70
SIGNATURES
INDENTURE, dated as of July 1, 1996, between The AES
Corporation., a Delaware corporation, as the Company, and The First National
Bank of Chicago, a national association, as Trustee.
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the issue from time to
time of its debentures, notes or other evidences of indebtedness to be issued
in one or more series (the "Securities") up to such principal amount or
amounts as may from time to time be authorized in accordance with the terms of
this Indenture and to provide, among other things, for the authentication,
delivery and administration thereof, the Company has duly authorized the
execution and delivery of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid
indenture and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the
Securities by the holders thereof, the Company and the Trustee mutually
covenant and agree for the equal and proportionate benefit of the respective
holders from time to time of the Securities or of any and all series thereof
and of the coupons, if any, appertaining thereto as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled
by" and "under common control with") when used with respect to any Person
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through
the ownership of voting securities, by contract or otherwise.
"Agent" means any Registrar, Paying Agent, transfer agent or
Authenticating Agent.
"Authorized Newspaper" means a newspaper (which, in the case of
The City of New York, will, if practicable, be The Wall Street Journal
(Eastern Edition) and in the case of London, will, if practicable, be the
Financial Times (London Edition) and published in an official language of the
country of publication customarily published at least once a day for at least
five days in each calendar week and of general circulation in The City of New
York or London, as applicable. If it shall be impractical in the opinion of
the Trustee to make any publication of any notice required hereby in an
Authorized Newspaper, any publication or other notice in lieu thereof which is
made or given with the approval of the Trustee shall constitute a sufficient
publication of such notice.
"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.
"Board Resolution" means one or more resolutions of the board
of directors of the Company or any authorized committee thereof, certified by
the secretary or an assistant secretary to have been duly adopted and to be in
full force and effect on the date of certification, and delivered to the
Trustee.
"Business Day" means any day, other than a Saturday or Sunday,
that is neither a legal holiday nor a day on which banking institutions are
authorized or required by law or regulation to close in The City of New York,
with respect to any Security the interest on which is based on the offered
quotations in the interbank Eurodollar market for dollar deposits in London,
or with respect to Securities denominated in a specified currency other than
United States dollars, in the principal financial center of the country of the
specified currency.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act or, if at any
time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act,
then the body performing such duties at such time.
"Company" means the party named as such in the first paragraph
of this Indenture until a successor replaces it pursuant to Article 5 of this
Indenture and thereafter means the successor.
"Corporate Trust Office" means the office of the Trustee at which
the corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at 14 Wall Street, 8th Floor, Window 2, New York, New York 10005
Attention: Corporate Trust Administration.
"Default" means any Event of Default as defined in Section 6.1
and any event that is, or after notice or passage of time or both would be, an
Event of Default.
"Depositary" means, with respect to the Securities of any
series issuable or issued in the form of one or more Registered Global
Securities, the Person designated as Depositary by the Company pursuant to
Section 2.3 until a successor Depositary shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Depositary"
shall mean or include each Person who is then a Depositary hereunder, and
if at any time there is more than one such Person, "Depositary" as used
with respect to the Securities of any such series shall mean the Depositary
with respect to the Registered Global Securities of that series.
"Designated Senior Debt" means (i) Debt under the Bank Credit
Agreement and (ii) Debt constituting Senior 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
Debt as "Designated Senior Debt" by the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means generally accepted accounting principles in the U.S.
as in effect as of the Closing Date applied on a basis consistent with the
principles, methods, prodedures and practices employed in the preparation of the
Company's audited financial statements, including, without limitation, those set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as is approved by a significant segment of the
accounting profession.
"Holder" or "Securityholder" means the registered holder of any
Security with respect to Registered Securities and the bearer of any
Unregistered Security or any coupon appertaining thereto, as the case may be.
"Indenture" means this Indenture as originally executed and
delivered or as it may be amended or supplemented from time to time by one
or more indentures supplemental to this Indenture entered into pursuant to
the applicable provisions of this Indenture and shall include the forms and
terms of the Securities of each series established as contemplated pursuant
to Sections 2.1 and 2.3.
"Officer" means, with respect to the Company, the chairman of
the board of directors, the president or chief executive officer, any vice
president, the chief financial officer, the treasurer or any assistant
treasurer, or the secretary or any assistant secretary.
"Officers' Certificate" means a certificate signed in the name
of the Company (i) by the chairman of the board of directors, the president or
chief executive officer or a vice president and (ii) by the chief financial
officer, the treasurer or any assistant treasurer, or the secretary or any
assistant secretary, complying with Section 10.4 and delivered to the Trustee.
Each such certificate shall comply with Section 314 of the Trust Indenture Act
and include (except as otherwise expressly provided in this Indenture) the
statements provided in Section 10.4.
"Opinion of Counsel" means a written opinion signed by legal
counsel, who may be an employee of or counsel to the Company, satisfactory to
the Trustee and complying with Section 10.4. Each such opinion shall comply
with Section 314 of the Trust Indenture Act and include the statements
provided in Section 10.4, if and to the extent required thereby.
"original issue date" of any Security (or portion thereof)
means the earlier of (a) the date of authentication of such Security or (b)
the date of any Security (or portion thereof) for which such Security was
issued (directly or indirectly) on registration of transfer, exchange or
substitution.
"Original Issue Discount Security" means any Security that
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant to
Section 6.2.
"Periodic Offering" means an offering of Securities of a series
from time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the stated
maturity or maturities thereof and the redemption provisions, if any, with
respect thereto, are to be determined by the Company or its agents upon the
issuance of such Securities.
"Person" means an individual, a corporation, a partnership, a
limited liability company, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Principal" of a Security means the principal amount of, and,
unless the context indicates otherwise, includes any premium payable on, the
Security.
"Registered Global Security" means a Security evidencing all or
a part of a series of Registered Securities, issued to the Depositary for such
series in accordance with Section 2.2, and bearing the legend prescribed in
Section 2.2.
"Registered Security" means any Security registered on the
Security Register (as defined in Section 2.5).
"Responsible Officer" means, when used with respect to the
Trustee, any senior trust officer, any vice president, any trust officer, any
assistant 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 knowledge of and familiarity
with the particular subject.
"Securities" means any of the securities, as defined in the
first paragraph of the recitals hereof, that are authenticated and delivered
under this Indenture and, unless the context indicates otherwise, shall
include any coupon appertaining thereto.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior 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 the issuance of the Securities; provided that Senior
Debt shall not include (i) the Company's 9 3/4% Senior Subordinated Notes Due
2002 which rank pari passu to the Securities, (ii) the Company's 6 1/2%
Convertible Subordinated Debentures Due 2002 which rank junior to the
Securities, (iii) Debt of the Company to any Affiliate, (iv) any other Debt of
the Company which by the terms of the instrument creating or evidencing the same
are specifically designated as not being senior in right of payment to the
Securities and (v) redeemable stock of the Company.
"Subsidiary" means, with respect to any Person, any
corporation, association or other business entity of which a majority of
the capital stock or other ownership interests having ordinary voting power
to elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by such
Person.
"Trustee" means the party named as such in the first paragraph
of this Indenture until a successor replaces it in accordance with the
provisions of Article 7 and thereafter means such successor.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended (15 U.S. Code Section Section 77aaa-77bbbb), as it may be amended
from time to time.
"Unregistered Security" means any Security other than a
Registered Security.
"U.S. Government Obligations" means securities that are (i)
direct obligations of the United States of America for the payment of which
its full faith and credit is pledged or (ii) obligations of 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, and shall also include a depository receipt issued by a
bank or trust company as custodian with respect to any such U.S. Government
Obligation or a specific payment of interest on or principal of any such U.S.
Government Obligation held by such custodian for the account of the holder of
a 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 U.S. Government Obligation or the specific payment of interest
on or principal of the U.S. Government Obligation evidenced by such depository
receipt.
"Yield to Maturity" means, as the context may require, the
yield to maturity (i) on a series of Securities or (ii) if the Securities of a
series are issuable from time to time, on a Security of such series,
calculated at the time of issuance of such series in the case of clause (i) or
at the time of issuance of such Security of such series in the case of clause
(ii), or, if applicable, at the most recent redetermination of interest on
such series or on such Security, and calculated in accordance with the constant
interest method or such other accepted financial practice as is specified in
the terms of such Security.
SECTION 1.2 Other Definitions. Each of the following
terms is defined in the section set forth opposite such term:
Term Section
---- -------
Authenticating Agent 2.2
cash transaction 7.3
Dollars 4.2
Event of Default 6.1
Judgment Currency 10.15
mandatory sinking fund payment 3.5
optional sinking fund payment 3.5
Paying Agent 2.5
Payment Blockage Period 11.2
record date 2.4
Registrar 2.5
Required Currency 10.15
Security Register 2.5
self-liquidating paper 7.3
sinking fund payment date 3.5
tranche 2.14
SECTION 1.3 Incorporation by Reference of Trust Indenture
Act. Whenever this Indenture refers to a provision of the Trust Indenture
Act, the provision is incorporated by reference in and made a part of this
Indenture. The following terms used in this Indenture that are defined by the
Trust Indenture Act have the following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Holder or a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the indenture securities means the Company or any
other obligor on the Securities.
All other terms used in this Indenture that are defined by the
Trust Indenture Act, defined by reference in the Trust Indenture Act to
another statute or defined by a rule of the Commission and not otherwise
defined herein have the meanings assigned to them therein.
SECTION 1.4 Rules of Construction. Unless the context
otherwise requires:
(i) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(ii) words in the singular include the plural, and words in
the plural include the singular;
(iii) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision;
(iv) all references to Sections or Articles refer to Sections
or Articles of this Indenture unless otherwise indicated; and
(v) use of masculine, feminine or neuter pronouns should not
be deemed a limitation, and the use of any such pronouns should be
construed to include, where appropriate, the other pronouns.
ARTICLE 2
THE SECURITIES
SECTION 2.1 Form and Dating. The Securities of each
series shall be substantially in such form or forms (not inconsistent with
this Indenture) as shall be established by or pursuant to one or more Board
Resolutions or in one or more indentures supplemental hereto, in each case
with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture and may have
imprinted or otherwise reproduced thereon such legend or legends or
endorsements, not inconsistent with the provisions of this Indenture, as may
be required to comply with any law, or with any rules of any securities
exchange or usage, all as may be determined by the officers executing such
Securities as evidenced by their execution of the Securities. Unless
otherwise so established, Unregistered Securities shall have coupons attached.
SECTION 2.2 Execution and Authentication. Two Officers
shall execute the Securities (other than coupons) for the Company by facsimile
or manual signature in the name and on behalf of the Company. The seal of the
Company, if any, shall be reproduced on the Securities. If an Officer whose
signature is on a Security no longer holds that office at the time the
Security is authenticated, the Security shall nevertheless be valid.
The Trustee, at the expense of the Company, may appoint an
authenticating agent (the "Authenticating Agent") to authenticate Securities
(other than coupons). The Authenticating Agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent.
A Security (other than coupons) shall not be valid until the
Trustee or Authenticating Agent manually signs the certificate of
authentication on the Security. The signature shall be conclusive evidence
that the Security has been authenticated under this Indenture.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series
having attached thereto appropriate coupons, if any, executed by the Company
to the Trustee for authentication together with the applicable documents
referred to below in this Section, and the Trustee shall thereupon
authenticate and deliver such Securities to or upon the written order of the
Company. In authenticating any Securities of a series, the Trustee shall be
entitled to receive prior to the first authentication of any Securities of
such series, and (subject to Article 7) shall be fully protected in relying
upon, unless and until such documents have been superseded or revoked:
(1) any Board Resolution and/or executed supplemental
indenture referred to in Sections 2.1 and 2.3 by or pursuant to which
the forms and terms of the Securities of that series were established;
(2) an Officers' Certificate setting forth the form or forms
and terms of the Securities, stating that the form or forms and terms
of the Securities of such series have been, or will be when
established in accordance with such procedures as shall be referred
to therein, established in compliance with this Indenture; and
(3) an Opinion of Counsel substantially to the effect that the
form or forms and terms of the Securities of such series have been,
or will be when established in accordance with such procedures as
shall be referred to therein, established in compliance with this
Indenture and that the supplemental indenture, to the extent
applicable, and Securities have been duly authorized and, if executed
and authenticated in accordance with the provisions of the Indenture
and delivered to and duly paid for by the purchasers thereof on the
date of such opinion, would be entitled to the benefits of the
Indenture and would be valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective
terms, subject to bankruptcy, insolvency, reorganization,
receivership, moratorium and other similar laws affecting creditors'
rights generally, general principles of equity, and such other
matters as shall be specified therein.
If the Company shall establish pursuant to Section 2.3 that the
Securities of a series or a portion thereof are to be issued in the form of
one or more Registered Global Securities, then the Company shall execute and
the Trustee shall authenticate and deliver one or more Registered Global
Securities that (i) shall represent and shall be denominated in an amount
equal to the aggregate principal amount of all of the Securities of such
series issued in such form and not yet cancelled, (ii) shall be registered in
the name of the Depositary for such Registered Global Security or Securities
or the nominee of such Depositary, (iii) shall be delivered by the Trustee to
such Depositary or its custodian or pursuant to such Depositary's instructions
and (iv) shall bear a legend substantially to the following effect: "Unless
and until it is exchanged in whole or in part for Securities in definitive
registered form, this Security may not be transferred except as a whole by the
Depositary to the nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary."
SECTION 2.3 Amount Unlimited; Issuable in Series. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series and shall be
subordinated to the Senior Debt pursuant to the provisions of Article 11
hereof. There shall be established in or pursuant to Board Resolution or one
or more indentures supplemental hereto, prior to the initial issuance of
Securities of any series, subject to the last sentence of this Section 2.3,
(1) the designation of the Securities of the series, which
shall distinguish the Securities of the series from the Securities of
all other series;
(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered
under this Indenture and any limitation on the ability of the Company
to increase such aggregate principal amount after the initial
issuance of the Securities of that series (except for Securities
authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, or upon redemption of, other Securities
of the series pursuant hereto);
(3) the date or dates on which the principal of the Securities
of the series is payable (which date or dates may be fixed or
extendible);
(4) the rate or rates (which may be fixed or variable) per
annum at which the Securities of the series shall bear interest, if
any, the date or dates from which such interest shall accrue, on
which such interest shall be payable and (in the case of Registered
Securities) on which a record shall be taken for the determination of
Holders to whom interest is payable and/or the method by which such
rate or rates or date or dates shall be determined;
(5) if other than as provided in Section 4.2, the place or
places where the principal of and any interest on Securities of the
series shall be payable, any Registered Securities of the series may
be surrendered for exchange, notices, demands to or upon the Company
in respect of the Securities of the series and this Indenture may be
served and notice to Holders may be published;
(6) the right, if any, of the Company to redeem Securities of
the series, in whole or in part, at its option and the period or
periods within which, the price or prices at which and any terms and
conditions upon which Securities of the series may be so redeemed,
pursuant to any sinking fund or otherwise;
(7) the obligation, if any, of the Company to redeem, purchase
or repay Securities of the series pursuant to any mandatory
redemption, sinking fund or analogous provisions or at the option of
a Holder thereof and the price or prices at which and the period or
periods within which and any of the terms and conditions upon which
Securities of the series shall be redeemed, purchased or repaid, in
whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(9) if other than the principal amount thereof, the portion of
the principal amount of Securities of the series which shall be
payable upon declaration of acceleration of the maturity thereof;
(10) if other than the coin or currency in which the Securities
of the series are denominated, the coin or currency in which payment
of the principal of or interest on the Securities of the series shall
be payable or if the amount of payments of Principal of and/or
interest on the Securities of the series may be determined with
reference to an index based on a coin or currency other than that in
which the Securities of the series are denominated, the manner in
which such amounts shall be determined;
(11) if other than the currency of the United States of
America, the currency or currencies, including composite currencies,
in which payment of the Principal of and interest on the Securities
of the series shall be payable, and the manner in which any such
currencies shall be valued against other currencies in which any
other Securities shall be payable;
(12) whether the Securities of the series or any portion thereof
will be issuable as Registered Securities (and if so, whether such
Securities will be issuable as Registered Global Securities) or
Unregistered Securities (with or without coupons), or any combination
of the foregoing, any restrictions applicable to the offer, sale or
delivery of Unregistered Securities or the payment of interest
thereon and, if other than as provided herein, the terms upon which
Unregistered Securities of any series may be exchanged for Registered
Securities of such series and vice versa;
(13) whether and under what circumstances the Company will pay
additional amounts on the Securities of the series held by a person
who is not a U.S. person in respect of any tax, assessment or
governmental charge withheld or deducted and, if so, whether the
Company will have the option to redeem such Securities rather than
pay such additional amounts;
(14) if the Securities of the series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
the form and terms of such certificates, documents or conditions;
(15) any trustees, depositaries, authenticating or paying
agents, transfer agents or the registrar or any other agents with
respect to the Securities of the series;
(16) provisions, if any, for the defeasance of the Securities of
the series (including provisions permitting defeasance of less than
all Securities of the series), which provisions may be in addition
to, in substitution for, or in modification of (or any combination of
the foregoing) the provisions of Article 8;
(17) if the Securities of the series are issuable in whole or in
part as one or more Registered Global Securities, the identity of the
Depositary for such Registered Global Security or Securities;
(18) any other events of default or covenants with respect to
the Securities of the series; and
(19) any other terms of the Securities of the series (which
terms shall not be inconsistent with the provisions of this
Indenture).
All Securities of any one series and coupons, if any,
appertaining thereto shall be substantially identical, except in the case of
Registered Securities as to date and denomination, except in the case of any
Periodic Offering and except as may otherwise be provided by or pursuant to
the Board Resolution referred to above or as set forth in any such indenture
supplemental hereto. All Securities of any one series need not be issued at
the same time and may be issued from time to time, consistent with the terms of
this Indenture, if so provided by or pursuant to such Board Resolution or in
any such indenture supplemental hereto and any forms and terms of Securities
to be issued from time to time may be completed and established from time to
time prior to the issuance thereof by procedures described in such Board
Resolution or supplemental indenture.
SECTION 2.4 Denomination and Date of Securities; Payments
of Interest. The Securities of each series shall be issuable as Registered
Securities or Unregistered Securities in denominations established as
contemplated by Section 2.3 or, if not so established with respect to
Securities of any series, in denominations of $1,000 and any integral multiple
thereof. The Securities of each series shall be numbered, lettered or
otherwise distinguished in such manner or in accordance with such plan as the
Officers of the Company executing the same may determine, as evidenced by
their execution thereof.
Each Security shall be dated the date of its authentication.
The Securities of each series shall bear interest, if any, from the date, and
such interest and shall be payable on the dates, established as
contemplated by Section 2.3.
The person in whose name any Registered Security of any series
is registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such series
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Registered
Security subsequent to the record date and prior to such interest payment
date, except if and to the extent the Company shall default in the payment of
the interest due on such interest payment date for such series, in which case
the provisions of Section 2.13 shall apply. The term "record date" as used
with respect to any interest payment date (except a date for payment of
defaulted interest) for the Securities of any series shall mean the date
specified as such in the terms of the Registered Securities of such series
established as contemplated by Section 2.3, or, if no such date is so
established, the fifteenth day next preceding such interest payment date,
whether or not such record date is a Business Day.
SECTION 2.5 Registrar and Paying Agent; Agents Generally.
The Company shall maintain an office or agency where Securities may be
presented for registration, registration of transfer or for exchange (the
"Registrar") and an office or agency where Securities may be presented for
payment (the "Paying Agent"), which shall be in the Borough of Manhattan, The
City of New York. The Company shall cause the Registrar to keep a register of
the Registered Securities and of their registration, transfer and exchange
(the "Security Register"). The Company may have one or more additional
Paying Agents or transfer agents with respect to any series.
The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture. The agreement shall implement
the provisions of this Indenture and the Trust Indenture Act that relate to
such Agent. The Company shall give prompt written notice to the Trustee of
the name and address of any Agent and any change in the name or address of an
Agent. If the Company fails to maintain a Registrar or Paying Agent, the
Trustee shall act as such. The Company may remove any Agent upon written
notice to such Agent and the Trustee; provided that no such removal shall
become effective until (i) the acceptance of an appointment by a successor
Agent to such Agent as evidenced by an appropriate agency agreement entered
into by the Company and such successor Agent and delivered to the Trustee or
(ii) notification to the Trustee that the Trustee shall serve as such Agent
until the appointment of a successor Agent in accordance with clause (i) of
this proviso. The Company or any affiliate of the Company may act as Paying
Agent or Registrar; provided that neither the Company nor an affiliate of the
Company shall act as Paying Agent in connection with the defeasance of the
Securities or the discharge of this Indenture under Article 8.
The Company initially appoints the Trustee as Registrar, Paying
Agent and Authenticating Agent. If, at any time, the Trustee is not the
Registrar, the Registrar shall make available to the Trustee ten days prior to
each interest payment date and at such other times as the Trustee may
reasonably request the names and addresses of the Holders as they appear in
the Security Register.
SECTION 2.6 Paying Agent to Hold Money in Trust. Not later than
10:00 a.m. New York City time on each due date of any Principal or interest on
any Securities, the Company shall deposit with the Paying Agent money in
immediately available funds sufficient to pay such Principal or interest. The
Company shall require each Paying Agent other than the Trustee to agree in
writing that such Paying Agent shall hold in trust for the benefit of the
Holders of such Securities or the Trustee all money held by the Paying Agent for
the payment of Principal of and interest on such Securities and shall promptly
notify the Trustee of any default by the Company in making any such payment. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and account for any funds disbursed, and the Trustee may at any time
during the continuance of any payment default, upon written request to a Paying
Agent, require such Paying Agent to pay all money held by it to the Trustee and
to account for any funds disbursed. Upon doing so, the Paying Agent shall have
no further liability for the money so paid over to the Trustee. If the Company
or any affiliate of the Company acts as Paying Agent, it will, on or before each
due date of any Principal of or interest on any Securities, segregate and hold
in a separate trust fund for the benefit of the Holders thereof a sum of money
sufficient to pay such Principal or interest so becoming due until such sum of
money shall be paid to such Holders or otherwise disposed of as provided in this
Indenture, and will promptly notify the Trustee in writing or failure to act as
required by this Section.
SECTION 2.7 Transfer and Exchange. Unregistered
Securities (except for any temporary global Unregistered Securities) and
coupons (except for coupons attached to any temporary global Unregistered
Securities) shall be transferable by delivery.
At the option of the Holder thereof, Registered Securities of
any series (other than a Registered Global Security, except as set forth
below) may be exchanged for a Registered Security or Registered Securities of
such series and tenor having authorized denominations and an equal aggregate
principal amount, upon surrender of such Registered Securities to be exchanged
at the agency of the Company that shall be maintained for such purpose in
accordance with Section 2.5 and upon payment, if the Company shall so require,
of the charges hereinafter provided. If the Securities of any series are
issued in both registered and unregistered form, except as otherwise
established pursuant to Section 2.3, at the option of the Holder thereof,
Unregistered Securities of any series may be exchanged for Registered
Securities of such series and tenor having authorized denominations and an
equal aggregate principal amount, upon surrender of such Unregistered
Securities to be exchanged at the agency of the Company that shall be
maintained for such purpose in accordance with Section 4.2, with, in the case
of Unregistered Securities that have coupons attached, all unmatured coupons
and all matured coupons in default thereto appertaining, and upon payment, if
the Company shall so require, of the charges hereinafter provided. At the
option of the Holder thereof, if Unregistered Securities of any series,
maturity date, interest rate and original issue date are issued in more than
one authorized denomination, except as otherwise established pursuant to
Section 2.3, such Unregistered Securities may be exchanged for Unregistered
Securities of such series and tenor having authorized denominations and an
equal aggregate principal amount, upon surrender of such Unregistered
Securities to be exchanged at the agency of the Company that shall be
maintained for such purpose in accordance with Section 4.2, with, in the case
of Unregistered Securities that have coupons attached, all unmatured coupons
and all matured coupons in default thereto appertaining, and upon payment, if
the Company shall so require, of the charges hereinafter provided. Registered
Securities of any series may not be exchanged for Unregistered Securities of
such series. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Registered Securities presented for registration of
transfer, exchange, redemption or payment shall be duly endorsed by, or be
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company and the Trustee duly executed by, the holder or
his attorney duly authorized in writing.
The Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with
any exchange or registration of transfer of Securities. No service charge
shall be made for any such transaction.
Notwithstanding any other provision of this Section 2.7, unless
and until it is exchanged in whole or in part for Securities in definitive
registered form, a Registered Global Security representing all or a portion of
the Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such series
or a nominee of such successor Depositary.
If at any time the Depositary for any Registered Global
Securities of any series notifies the Company that it is unwilling or unable
to continue as Depositary for such Registered Global Securities or if at any
time the Depositary for such Registered Global Securities shall no longer be
eligible under applicable law, the Company shall appoint a successor
Depositary eligible under applicable law with respect to such Registered
Global Securities. If a successor Depositary eligible under applicable law
for such Registered Global Securities is not appointed by the Company within
90 days after the Company receives such notice or becomes aware of such
ineligibility, the Company will execute, and the Trustee, upon receipt of the
Company's order for the authentication and delivery of definitive Registered
Securities of such series and tenor, will authenticate and deliver Registered
Securities of such series and tenor, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of such Registered
Global Securities, in exchange for such Registered Global Securities.
The Company may at any time and in its sole discretion
determine that any Registered Global Securities of any series shall no longer
be maintained in global form. In such event the Company will execute, and the
Trustee, upon receipt of the Company's order for the authentication and
delivery of definitive Registered Securities of such series and tenor, will
authenticate and deliver, Registered Securities of such series and tenor in
any authorized denominations, in an aggregate principal amount equal to the
principal amount of such Registered Global Securities, in exchange for such
Registered Global Securities.
Any time the Registered Securities of any series are not in the
form of Registered Global Securities pursuant to the preceding two paragraphs,
the Company agrees to supply the Trustee with a reasonable supply of
certificated Registered Securities without the legend required by Section 2.2
and the Trustee agrees to hold such Registered Securities in safekeeping until
authenticated and delivered pursuant to the terms of this Indenture.
If established by the Company pursuant to Section 2.3 with
respect to any Registered Global Security, the Depositary for such Registered
Global Security may surrender such Registered Global Security in exchange in
whole or in part for Registered Securities of the same series and tenor in
definitive registered form on such terms as are acceptable to the Company and
such Depositary. Thereupon, the Company shall execute, and the Trustee shall
authenticate and deliver, without service charge,
(i) to the Person specified by such Depositary new Registered
Securities of the same series and tenor, of any authorized
denominations as requested by such Person, in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest
in the Registered Global Security; and
(ii) to such Depositary a new Registered Global Security in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Registered Global Security and the
aggregate principal amount of Registered Securities authenticated and
delivered pursuant to clause (i) above.
Registered Securities issued in exchange for a Registered
Global Security pursuant to this Section 2.7 shall be registered in such names
and in such authorized denominations as the Depositary for such Registered
Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee or an agent of the
Company or the Trustee. The Trustee or such agent shall deliver such
Securities to or as directed by the Persons in whose names such Securities are
so registered.
All Securities issued upon any transfer or exchange of
Securities shall be valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such transfer or exchange.
Notwithstanding anything herein or in the forms or terms of any
Securities to the contrary, none of the Company, the Trustee or any agent of
the Company or the Trustee shall be required to exchange any Unregistered
Security for a Registered Security if such exchange would result in adverse
Federal income tax consequences to the Company (such as, for example, the
inability of the Company to deduct from its income, as computed for Federal
income tax purposes, the interest payable on the Unregistered Securities)
under then applicable United States Federal income tax laws. The Trustee and
any such agent shall be entitled to rely on an Officers' Certificate or an
Opinion of Counsel in determining such result.
The Registrar shall not be required (i) to issue, authenticate,
register the transfer of or exchange Securities of any series for a period of
15 days before a selection of such Securities to be redeemed or (ii) to
register the transfer of or exchange any Security selected for redemption in
whole or in part.
SECTION 2.8 Replacement Securities. If a defaced or
mutilated Security of any series is surrendered to the Trustee or if a Holder
claims that its Security of any series has been lost, destroyed or wrongfully
taken, the Company shall issue and the Trustee shall authenticate a
replacement Security of such series and tenor and principal amount bearing a
number not contemporaneously outstanding. If required by the Trustee or the
Company, an indemnity bond must be furnished that is sufficient in the
judgment of both the Trustee and the Company to protect the Company, the
Trustee and any Agent from any loss that any of them may suffer if a Security
is replaced. The Company may charge such Holder for its expenses and the
expenses of the Trustee (including without limitation attorneys' fees and
expenses) in replacing a Security. In case any such mutilated, defaced, lost,
destroyed or wrongfully taken Security has become or is about to become due
and payable, the Company in its discretion may pay such Security instead of
issuing a new Security in replacement thereof.
Every replacement Security is an additional obligation of the
Company and shall be entitled to the benefits of this Indenture.
To the extent permitted by law, the foregoing provisions of
this Section are exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or wrongfully taken Securities.
SECTION 2.9 Outstanding Securities. Securities
outstanding at any time are all Securities that have been authenticated by the
Trustee except for those cancelled by it, those delivered to it for
cancellation and those described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.8, it ceases to
be outstanding unless and until the Trustee and the Company receive proof
satisfactory to them that the replaced Security is held by a holder in due
course.
If the Paying Agent (other than the Company or an affiliate of
the Company) holds on the maturity date or any redemption date or date for
repurchase of the Securities money sufficient to pay Securities payable or to
be redeemed or repurchased on that date, then on and after that date such
Securities cease to be outstanding and interest on them shall cease to accrue.
A Security does not cease to be outstanding because the Company
or one of its affiliates holds such Security, provided, however, that, in
determining whether the Holders of the requisite principal amount of the
outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by the
Company or any affiliate of the Company shall be disregarded and deemed not to
be outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities as to which a Responsible Officer
of the Trustee has received written notice to be so owned shall be so
disregarded. Any Securities so owned which are pledged by the Company, or by
any affiliate of the Company, as security for loans or other obligations,
otherwise than to another such affiliate of the Company, shall be deemed to be
outstanding, if the pledgee is entitled pursuant to the terms of its pledge
agreement and is free to exercise in its or his discretion the right to vote
such securities, uncontrolled by the Company or by any such affiliate.
SECTION 2.10 Temporary Securities. Until definitive
Securities of any series are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Securities of such series. Temporary
Securities of any series shall be substantially in the form of definitive
Securities of such series but may have insertions, substitutions, omissions
and other variations determined to be appropriate by the Officers executing
the temporary Securities, as evidenced by their execution of such temporary
Securities. If temporary Securities of any series are issued, the Company
will cause definitive Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive Securities of any
series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series and tenor upon surrender of such
temporary Securities at the office or agency of the Company designated for
such purpose pursuant to Section 4.2, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities of any
series the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive
Securities of such series and tenor and authorized denominations. Until so
exchanged, the temporary Securities of any series shall be entitled to the
same benefits under this Indenture as definitive Securities of such series.
SECTION 2.11 Cancellation. The Company at any time may
deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in
any manner whatsoever, and may deliver to the Trustee for cancellation any
Securities previously authenticated hereunder which the Company has not issued
and sold. The Registrar, any transfer agent and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for transfer,
exchange or payment. The Trustee shall cancel and destroy all Securities
surrendered for transfer, exchange, payment or cancellation and shall deliver
a certificate of destruction to the Company. The Company may not issue new
Securities to replace Securities it has paid in full or delivered to the
Trustee for cancellation.
SECTION 2.12 CUSIP Numbers. The Company in issuing the
Securities 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 Holders and no
representation shall be made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of redemption or
exchange.
SECTION 2.13 Defaulted Interest. If the Company
defaults in a payment of interest on the Securities, it shall pay, or shall
deposit with the Paying Agent money in immediately available funds sufficient
to pay, the defaulted interest plus (to the extent lawful) any interest
payable on the defaulted interest (as may be specified in the terms thereof,
established pursuant to Section 2.3) to the Persons who are Holders on a
subsequent special record date, which shall mean the 15th day next preceding
the date fixed by the Company for the payment of defaulted interest, whether
or not such day is a Business Day. At least 15 days before such special
record date, the Company shall mail to each Holder and to the Trustee a notice
that states the special record date, the payment date and the amount of
defaulted interest to be paid.
SECTION 2.14 Series May Include Tranches. A series of
Securities may include one or more tranches (each a "tranche") of Securities,
including Securities issued in a Periodic Offering. The Securities of
different tranches may have one or more different terms, including
authentication dates and public offering prices, but all the Securities within
each such tranche shall have identical terms, including authentication date
and public offering price. Notwithstanding any other provision of this
Indenture, with respect to Sections 2.2 (other than the fourth paragraph
thereof) through 2.4, 2.7, 2.8, 2.10, 3.1 through 3.5, 4.2, 6.1 through 6.14,
8.1 through 8.7 and 9.2, if any series of Securities includes more than one
tranche, all provisions of such sections applicable to any series of
Securities shall be deemed equally applicable to each tranche of any series
of Securities in the same manner as though originally designated a series
unless otherwise provided with respect to such series or tranche pursuant to
Section 2.3. In particular, and without limiting the scope of the next
preceding sentence, any of the provisions of such sections which provide for
or permit action to be taken with respect to a series of Securities shall also
be deemed to provide for and permit such action to be taken instead only with
respect to Securities of one or more tranches within that series (and such
provisions shall be deemed satisfied thereby), even if no comparable action is
taken with respect to Securities in the remaining tranches of that series.
ARTICLE 3
REDEMPTION
SECTION 3.1 Applicability of Article. The provisions of
this Article shall be applicable to the Securities of any series which are
redeemable before their maturity or to any sinking fund for the retirement of
Securities of a series except as otherwise specified as contemplated by
Section 2.3 for Securities of such series.
SECTION 3.2 Notice of Redemption; Partial Redemptions.
Notice of redemption to the Holders of Registered Securities of any series to
be redeemed as a whole or in part at the option of the Company shall be given
by mailing notice of such redemption by first class mail, postage prepaid, at
least 30 days and not more than 60 days prior to the date fixed for redemption
to such Holders of Registered Securities of such series at their last
addresses as they shall appear upon the registry books. Notice of
redemption to the Holders of Unregistered Securities of any series to be
redeemed as a whole or in part who have filed their names and addresses
with the Trustee pursuant to Section 313(c)(2) of the Trust Indenture Act,
shall be given by mailing notice of such redemption, by first class mail,
postage prepaid, at least 30 days and not more than 60 days prior to the
date fixed for redemption, to such Holders at such addresses as were so
furnished to the Trustee (and, in the case of any such notice given by the
Company, the Trustee shall make such information available to the Company
for such purpose). Notice of redemption to all other Holders of
Unregistered Securities of any series to be redeemed as a whole or in part
shall be published in an Authorized Newspaper in The City of New York or
with respect to any Security the interest on which is based on the offered
quotations in the interbank Eurodollar market for dollar deposits in an
Authorized Newspaper in London, in each case, once in each of three
successive calendar weeks, the first publication to be not less than 30
days nor more than 60 days prior to the date fixed for redemption. Any
notice which is mailed or published in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives the notice. Failure to give notice by mail, or any defect in the
notice to the Holder of any Security of a series designated for redemption
as a whole or in part shall not affect the validity of the proceedings for
the redemption of any other Security of such series.
The notice of redemption to each such Holder shall specify the
principal amount of each Security of such series held by such Holder to be
redeemed, the CUSIP numbers of the Securities to be redeemed, the date fixed
for redemption, the redemption price, the place or places of payment, that
payment will be made upon presentation and surrender of such Securities and,
in the case of Securities with coupons attached thereto, of all coupons
appertaining thereto maturing after the date fixed for redemption, that such
redemption is pursuant to the mandatory or optional sinking fund, or both, if
such be the case, that interest accrued to the date fixed for redemption will
be paid as specified in such notice and that on and after said date interest
thereon or on the portions thereof to be redeemed will cease to accrue. In
case any Security of a series is to be redeemed in part only, the notice of
redemption shall state the portion of the principal amount thereof to be
redeemed and shall state that on and after the date fixed for redemption, upon
surrender of such Security, a new Security or Securities of such series and
tenor in principal amount equal to the unredeemed portion thereof will be
issued.
The notice of redemption of Securities of any series to be
redeemed at the option of the Company shall be given by the Company or, at the
Company's request, by the Trustee in the name and at the expense of the
Company.
On or before 10:00 a.m. New York City time on the redemption
date specified in the notice of redemption given as provided in this Section,
the Company will deposit with the Trustee or with one or more Paying Agents
(or, if the Company is acting as its own Paying Agent, set aside, segregate
and hold in trust as provided in Section 2.6) an amount of money sufficient to
redeem on the redemption date all the Securities of such series so called for
redemption at the appropriate redemption price, together with accrued interest
to the date fixed for redemption. If all of the outstanding Securities of a
series are to be redeemed, the Company will deliver to the Trustee at least 10
days prior to the last date on which notice of redemption may be given to
Holders pursuant to the first paragraph of this Section 3.2 (or such shorter
period as shall be acceptable to the Trustee) an Officers' Certificate stating
that all such Securities are to be redeemed. If less than all the outstanding
Securities of a series are to be redeemed, the Company will deliver to the
Trustee at least 15 days prior to the last date on which notice of redemption
may be given to Holders pursuant to the first paragraph of this Section 3.2
(or such shorter period as shall be acceptable to the Trustee) an Officers'
Certificate stating the aggregate principal amount of such Securities to be
redeemed. In case of a redemption at the election of the Company prior to the
expiration of any restriction on such redemption, the Company shall deliver to
the Trustee, prior to the giving of any notice of redemption to Holders
pursuant to this Section, an Officers' Certificate stating that such
redemption is not prohibited by such restriction.
If less than all the Securities of a series are to be redeemed,
the Trustee shall select, pro rata, by lot or in such manner as it shall deem
appropriate and fair, Securities of such series to be redeemed in whole or in
part. Securities may be redeemed in part in multiples equal to the minimum
authorized denomination for Securities of such series or any multiple thereof.
The Trustee shall promptly notify the Company in writing of the Securities of
such series selected for redemption and, in the case of any Securities of such
series selected for partial redemption, the principal amount thereof to be
redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Security redeemed or to be redeemed only in part,
to the portion of the principal amount of such Security which has been or is
to be redeemed.
SECTION 3.3 Payment of Securities Called for Redemption.
If notice of redemption has been given as above provided, the Securities or
portions of Securities 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 on and after such date (unless the Company shall default in
the payment of such Securities at the redemption price, together with interest
accrued to such date) interest on the Securities or portions of Securities so
called for redemption shall cease to accrue, and the unmatured coupons, if
any, appertaining thereto shall be void and, except as provided in Sections
7.11 and 8.2, such Securities shall cease from and after the date fixed for
redemption to be entitled to any benefit under this Indenture, and the Holders
thereof shall have no right in respect of such Securities except the right to
receive the redemption price thereof and unpaid interest to the date fixed for
redemption. On presentation and surrender of such Securities at a place of
payment specified in said notice, together with all coupons, if any,
appertaining thereto maturing after the date fixed for redemption, said
Securities or the specified portions thereof shall be paid and redeemed by the
Company at the applicable redemption price, together with interest accrued
thereon to the date fixed for redemption; provided that payment of interest
becoming due on or prior to the date fixed for redemption shall be payable in
the case of Securities with coupons attached thereto, to the Holders of the
coupons for such interest upon surrender thereof, and in the case of
Registered Securities, to the Holders of such Registered Securities registered
as such on the relevant record date subject to the terms and provisions of
Sections 2.4 and 2.13 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate of
interest or Yield to Maturity (in the case of an Original Issue Discount
Security) borne by such Security.
If any Security with coupons attached thereto is surrendered
for redemption and is not accompanied by all appurtenant coupons maturing
after the date fixed for redemption, the surrender of such missing coupon or
coupons may be waived by the Company and the Trustee, if there be furnished to
each of them such security or indemnity as they may require to save and hold
each of them harmless.
Upon presentation of any Security of any series redeemed in
part only, the Company shall execute and the Trustee shall authenticate and
deliver to or on the order of the Holder thereof, at the expense of the
Company, a new Security or Securities of such series and tenor (with any
unmatured coupons attached), of authorized denominations, in principal amount
equal to the unredeemed portion of the Security so presented.
SECTION 3.4 Exclusion of Certain Securities from
Eligibility for Selection for Redemption. Securities shall be excluded from
eligibility for selection for redemption if they are identified by
registration and certificate number in a written statement signed by an
authorized Officer of the Company and delivered to the Trustee at least 40
days prior to the last date on which notice of redemption may be given as
being owned of record and beneficially by, and not pledged or hypothecated by,
either (a) the Company or (b) an entity specifically identified in such
written statement as directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company.
SECTION 3.5 Mandatory and Optional Sinking Funds. The
minimum amount of any sinking fund payment provided for by the terms of
Securities 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 the Securities of any series is herein referred to as an "optional
sinking fund payment". The date on which a sinking fund payment is to be made
is herein referred to as the "sinking fund payment date".
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Company may at
its option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except through a mandatory sinking fund
payment) by the Company or receive credit for Securities of such series (not
previously so credited) theretofore purchased or otherwise acquired (except as
aforesaid) by the Company and delivered to the Trustee for cancellation
pursuant to Section 2.11, (b) receive credit for optional sinking fund
payments (not previously so credited) made pursuant to this Section, or (c)
receive credit for Securities of such series (not previously so credited)
redeemed by the Company through any optional sinking fund payment. Securities
so delivered or credited shall be received or credited by the Trustee at the
sinking fund redemption price specified in such Securities.
On or before the sixtieth day next preceding each sinking fund
payment date for any series, or such shorter period as shall be acceptable to
the Trustee, the Company will deliver to the Trustee an Officers' Certificate
(a) specifying the portion of the mandatory sinking fund payment to be
satisfied by payment of cash and the portion to be satisfied by credit of
specified Securities of such series and the basis for such credit, (b) stating
that none of the specified Securities of such series has theretofore been so
credited, (c) stating that no defaults in the payment of interest or Events of
Default with respect to such series have occurred (which have not been waived
or cured) and are continuing and (d) stating whether or not the Company
intends to exercise its right to make an optional sinking fund payment with
respect to such series and, if so, specifying the amount of such optional
sinking fund payment which the Company intends to pay on or before the next
succeeding sinking fund payment date. Any Securities of such series to be
credited and required to be delivered to the Trustee in order for the Company
to be entitled to credit therefor as aforesaid which have not theretofore been
delivered to the Trustee shall be delivered for cancellation pursuant to
Section 2.11 to the Trustee with such Officers' Certificate (or reasonably
promptly thereafter if acceptable to the Trustee). Such Officers' Certificate
shall be irrevocable and upon its receipt by the Trustee the Company shall
become unconditionally obligated to make all the cash payments or delivery of
securities therein referred to, if any, on or before the next succeeding
sinking fund payment date. Failure of the Company, on or before any such
sixtieth day, to deliver such Officer's Certificate and Securities specified
in this paragraph, if any, shall not constitute a default but shall
constitute, on and as of such date, the irrevocable election of the Company
(i) that the mandatory sinking fund payment for such series due on the next
succeeding sinking fund payment date shall be paid entirely in cash without
the option to deliver or credit Securities of such series in respect thereof
and (ii) that the Company will make no optional sinking fund payment with
respect to such series as provided in this Section.
If the sinking fund payment or payments (mandatory or optional
or both) to be made in cash on the next succeeding sinking fund payment date
plus any unused balance of any preceding sinking fund payments made in cash
shall exceed $50,000 (or a lesser sum if the Company shall so request with
respect to the Securities of any series), such cash shall be applied on the
next succeeding sinking fund payment date to the redemption of Securities of
such series at the sinking fund redemption price thereof together with accrued
interest thereon to the date fixed for redemption. If such amount shall be
$50,000 (or such lesser sum) or less and the Company makes no such request
then it shall be carried over until a sum in excess of $50,000 (or such lesser
sum) is available. The Trustee shall select, in the manner provided in
Section 3.2, for redemption on such sinking fund payment date a sufficient
principal amount of Securities of such series to absorb said cash, as
nearly as may be, and shall (if requested in writing by the Company) inform
the Company of the serial numbers of the Securities of such series (or
portions thereof) so selected. Securities shall be excluded from
eligibility for redemption under this Section if they are identified by
registration and certificate number in an Officers' Certificate delivered
to the Trustee at least 60 days prior to the sinking fund payment date as
being owned of record and beneficially by, and not pledged or hypothecated
by, either (a) the Company or (b) an entity specifically identified in such
Officers' Certificate as directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company. The
Trustee, in the name and at the expense of the Company (or the Company, if
it shall so request the Trustee in writing) shall cause notice of
redemption of the Securities of such series to be given in substantially
the manner provided in Section 3.2 (and with the effect provided in Section
3.3) for the redemption of Securities of such series in part at the option
of the Company. The amount of any sinking fund payments not so applied or
allocated to the redemption of Securities of such series shall be added to
the next cash sinking fund payment for such series and, together with such
payment, shall be applied in accordance with the provisions of this
Section. Any and all sinking fund moneys held on the stated maturity date
of the Securities of any particular series (or earlier, if such maturity is
accelerated), which are not held for the payment or redemption of
particular Securities of such series shall be applied, together with other
moneys, if necessary, sufficient for the purpose, to the payment of the
Principal of, and interest on, the Securities of such series at maturity.
On or before 10:00 a.m. New York City time on each sinking fund
payment date, the Company shall pay to the Trustee in cash or shall otherwise
provide for the payment of all interest accrued to the date fixed for
redemption on Securities to be redeemed on the next following sinking fund
payment date.
The Trustee shall not redeem or cause to be redeemed any
Securities of a series with sinking fund moneys or mail any notice of
redemption of Securities of such series by operation of the sinking fund
during the continuance of a Default in payment of interest on such Securities
or of any Event of Default except that, where the mailing of notice of
redemption of any Securities shall theretofore have been made, the Trustee
shall redeem or cause to be redeemed such Securities, provided that it shall
have received from the Company a sum sufficient for such redemption. Except
as aforesaid, any moneys in the sinking fund for such series at the time when
any such Default or Event of Default shall occur, and any moneys thereafter
paid into the sinking fund, shall, during the continuance of such default or
Event of Default, be deemed to have been collected under Article 6 and held
for the payment of all such Securities. In case such Event of Default shall
have been waived as provided in Section 6.4 or the Default cured on or before
the sixtieth day preceding the sinking fund payment date in any year, such
moneys shall thereafter be applied on the next succeeding sinking fund payment
date in accordance with this Section to the redemption of such Securities.
ARTICLE 4
COVENANTS
SECTION 4.1 Payment of Securities. The Company shall pay
the Principal of and interest on the Securities on the dates and in the manner
provided in the Securities and this Indenture. The interest on Securities
with coupons attached (together with any additional amounts payable pursuant
to the terms of such Securities) shall be payable only upon presentation and
surrender of the several coupons for such interest installments as are
evidenced thereby as they severally mature. The interest on any temporary
Unregistered Securities (together with any additional amounts payable pursuant
to the terms of such Securities) shall be paid, as to the installments of
interest evidenced by coupons attached thereto, if any, only upon presentation
and surrender thereof, and, as to the other installments of interest, if any,
only upon presentation of such Unregistered Securities for notation thereon of
the payment of such interest. The interest on Registered Securities (together
with any additional amounts payable pursuant to the terms of such Securities)
shall be payable only to the Holders thereof and at the option of the Company
may be paid by mailing checks for such interest payable to or upon the written
order of such Holders at their last addresses as they appear on the Security
Register of the Company.
Notwithstanding any provisions of this Indenture and the
Securities of any series to the contrary, if the Company and a Holder of any
Registered Security so agree, payments of interest on, and any portion of the
Principal of, such Holder's Registered Security (other than interest payable
at maturity or on any redemption or repayment date or the final payment of
Principal on such Security) shall be made by the Paying Agent, upon receipt
from the Company of immediately available funds by 11:00 A.M., New York City
time (or such other time as may be agreed to between the Company and the
Paying Agent), directly to the Holder of such Security (by Federal funds wire
transfer or otherwise) if the Holder has delivered written instructions to the
Trustee 15 days prior to such payment date requesting that such payment will
be so made and designating the bank account to which such payments shall be so
made and in the case of payments of Principal, surrenders the same to the
Trustee in exchange for a Security or Securities aggregating the same
principal amount as the unredeemed principal amount of the Securities
surrendered. The Trustee shall be entitled to rely on the last instruction
delivered by the Holder pursuant to this Section 4.1 unless a new instruction
is delivered 15 days prior to a payment date. The Company will indemnify and
hold each of the Trustee and any Paying Agent harmless against any loss,
liability or expense (including attorneys' fees) resulting from any act or
omission to act on the part of the Company or any such Holder in connection
with any such agreement or from making any payment in accordance with any such
agreement.
The Company shall pay interest on overdue Principal, and
interest on overdue installments of interest, to the extent lawful, at the
rate per annum specified in the Securities.
SECTION 4.2 Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Securities may be surrendered for registration of transfer or exchange or
for presentation for payment and where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served. The
Company hereby initially designates the Corporate Trust Office of the Trustee,
located in the Borough of Manhattan, The City of New York, as such office or
agency of the Company. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 10.2.
The Company will maintain one or more agencies in a city or
cities located outside the United States (including any city in which such an
agency is required to be maintained under the rules of any stock exchange on
which the Securities of any series are listed) where the Unregistered
Securities, if any, of each series and coupons, if any, appertaining thereto may
be presented for payment. No payment on any Unregistered Security or coupon will
be made upon presentation of such Unregistered Security or coupon at an agency
of the Company within the United States nor will any payment be made by transfer
to an account in, or by mail to an address in, the United States unless,
pursuant to applicable United States laws and regulations then in effect, such
payment can be made without adverse tax consequences to the Company.
Notwithstanding the foregoing, if full payment in United States Dollars
("Dollars") at each agency maintained by the Company outside the United States
for payment on such Unregistered Securities or coupons appertaining thereto is
illegal or effectively precluded by exchange controls or other similar
restrictions, payments in Dollars of Unregistered Securities of any series and
coupons appertaining thereto which are payable in Dollars may be made at an
agency of the Company maintained in the Borough of Manhattan, The City of New
York.
The Company may also from time to time designate one or more
other offices or agencies where the Securities of any series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in
the Borough of Manhattan, The City of New York for such purposes. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
SECTION 4.3 Securityholders' Lists. The Company will
furnish or cause to be furnished to the Trustee a list in such form as the
Trustee may reasonably require of the names and addresses of the holders of
the Securities pursuant to Section 312 of the Trust Indenture Act of 1939 (a)
semi-annually not more than 15 days after each record date for the payment of
semi-annual interest on the Securities, as hereinabove specified, as of such
record date, and (b) at such other times as the Trustee may request in
writing, within thirty days after receipt by the Company of any such request
as of a date not more than 15 days prior to the time such information is
furnished.
SECTION 4.4 Certificate to Trustee. The Company will
furnish to the Trustee annually, on or before a date not more than four months
after the end of its fiscal year (which, on the date hereof, is a calendar
year), a brief certificate (which need not contain the statements required by
Section 10.4) from its principal executive, financial or accounting officer as
to his or her knowledge of the compliance of the Company with all conditions
and covenants under this Indenture (such compliance to be determined without
regard to any period of grace or requirement of notice provided under this
Indenture) which certificate shall comply with the requirements of the Trust
Indenture Act.
SECTION 4.5 Reports by the Company. The Company
covenants 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 which the Company may be
required to file with the Commission pursuant to Section 13 or Section 15(d)
of the Exchange Act.
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.1 When Company May Merge, Etc. The Company shall not
consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as an
entirety or substantially as an entirety in one transaction or a series of
related transactions) to, any Person (other than a consolidation with or merger
with or into a Subsidiary or a sale, conveyance, transfer, lease or other
disposition to a Subsidiary) or permit any Person to merge with or into the
Company unless either (x) the Company shall be the continuing Person or (y) the
Person (if other than the Company) formed by such consolidation or into which
the Company is merged or to which properties and assets of the Company shall be
a corporation organized and validly existing under the laws of the United States
of America or any jurisdiction thereof and shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, all of the
obligations of the Company on all of the Securities and under this Indenture and
the Company shall have delivered to the Trustee (A) an Opinion of Counsel
stating that such consolidation, merger or transfer and such supplemental
indenture complies with this provision and that all conditions precedent
provided for herein relating to such transaction have been complied with and
that such supplemental indenture constitutes the legal, valid and binding
obligation of the Company or such successor enforceable against such entity in
accordance with its terms, subject to customary exceptions and (B) an Officers'
Certificate to the effect that immediately after giving effect to such
transaction, no Default shall have occurred and be continuing.
SECTION 5.2 Successor Substituted. Upon any consolidation
or merger, or any sale, conveyance, transfer, lease or other disposition of
all or substantially all of the property and assets of the Company in
accordance with Section 5.1 of this Indenture, the successor Person formed
by such consolidation or into which the Company is merged or to which
such sale, conveyance, transfer, lease or other disposition 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
Person had been named as the Company herein.
ARTICLE 6
DEFAULT AND REMEDIES
SECTION 6.1 Events of Default. An "Event of Default"
shall occur with respect to the Securities of any series if:
(a) the Company defaults in the payment of the Principal of
any Security of such series when the same becomes due and payable at
maturity, upon acceleration, redemption or mandatory repurchase,
including as a sinking fund installment, or otherwise;
(b) the Company defaults in the payment of interest on any
Security of such series when the same becomes due and payable, and
such default continues for a period of 30 days;
(c) the Company defaults in the performance of or breaches any
other covenant or agreement of the Company in this Indenture with
respect to any Security of such series or in the Securities of such
series and such default or breach continues for a period of 30
consecutive days after written notice to the Company by the Trustee
or to the Company and the Trustee by the Holders of 25% or more in
aggregate principal amount of the Securities of all series affected
thereby;
(d) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Company in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Company or for any substantial part of its property
or ordering the winding up or liquidation of its affairs, and such
decree or order shall remain unstayed and in effect for a period of
60 consecutive days;
(e) the Company (A) commences a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consents to the entry of an order for relief
in an involuntary case under any such law, (B) consents to the
appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Company or for all or substantially all of the property and assets of
the Company or (C) effects any general assignment for the benefit of
creditors; or
(f) any other Event of Default established pursuant to Section
2.3 with respect to the Securities of such series occurs.
SECTION 6.2 Acceleration. (a) If an Event of Default other than
as described in clauses (d) or (e) of Section 6.1 with respect to the Securities
of any series then outstanding occurs and is continuing, then, and in each and
every such case, except for any series of Securities the principal of which
shall have already become due and payable, either the Trustee or the Holders of
not less than 25% in aggregate principal amount of the Securities of any such
affected series then outstanding hereunder (each such series treated as a
separate class) by notice in writing to the Company (and to the Trustee if given
by Securityholders), may declare the entire principal (or, if the Securities of
any such series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such series established
pursuant to Section 2.3) of all Securities of such affected series, and the
interest accrued thereon, if any, to be due and payable immediately, and upon
any such declaration the same shall become immediately due and payable.
(b) If an Event of Default described in clause (d) or (e) of
Section 6.1 occurs and is continuing, then the principal amount (or, if any
Securities are Original Issue Discount Securities, such portion of the principal
as may be specified in the terms thereof established pursuant to Section 2.3) of
all the Securities then outstanding and interest accrued thereon, if any, shall
be and become immediately due and payable, subject to the prior payment in full
of all Senior Debt, without any notice or other action by any Holder or the
Trustee, to the full extent permitted by applicable law.
The foregoing provisions, however, are subject to the condition
that if, at any time after the principal (or, if the Securities are Original
Issue Discount Securities, such portion of the principal as may be specified
in the terms thereof established pursuant to Section 2.3) of the Securities of
any series (or of all the Securities, as the case may be) 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 Securities of each such
series (or of all the Securities, as the case may be) and the principal of any
and all Securities of each such series (or of all the Securities, as the case
may be) which shall have become due otherwise than by acceleration (with
interest upon such principal and, to the extent that payment of such interest
is enforceable under applicable law, on overdue installments of interest, at
the same rate as the rate of interest or Yield to Maturity (in the case of
Original Issue Discount Securities) specified in the Securities of each such
series to the date of such payment or deposit) and such amount as shall be
sufficient to cover all amounts owing the Trustee under Section 7.7, and if
any and all Events of Default under the Indenture, other than the non-payment
of the principal of Securities which shall have become due by acceleration,
shall have been cured, waived or otherwise remedied as provided herein,
then and in every such case the Holders of a majority in aggregate
principal amount of all the then outstanding Securities of all such series
that have been accelerated (voting as a single class), by written notice to
the Company and to the Trustee, may waive all defaults with respect to all
such series (or with respect to all the Securities, as the case may be) and
rescind and annul such declaration and its consequences, but no such waiver
or rescission and annulment shall extend to or shall affect any subsequent
default or shall impair any right consequent thereon.
For all purposes under this Indenture, if a portion of the
principal of any Original Issue Discount Securities shall have been
accelerated and declared due and payable pursuant to the provisions hereof,
then, from and after such declaration, unless such declaration has been
rescinded and annulled, the principal amount of such Original Issue Discount
Securities shall be deemed, for all purposes hereunder, to be such portion of
the principal thereof as shall be due and payable as a result of such
acceleration, and payment of such portion of the principal thereof as shall be
due and payable as a result of such acceleration, together with interest, if
any, thereon and all other amounts owing thereunder, shall constitute payment
in full of such Original Issue Discount Securities.
SECTION 6.3 Other Remedies. If a payment default or an
Event of Default with respect to the Securities of any series occurs and is
continuing, the Trustee may pursue, in its own name or as trustee of an
express trust, any available remedy by proceeding at law or in equity to
collect the payment of principal of and interest on the Securities of such
series or to enforce the performance of any provision of the Securities of
such series or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the
proceeding.
SECTION 6.4 Waiver of Past Defaults. Subject to Sections
6.2, 6.7 and 9.2, the Holders of at least a majority in principal amount (or,
if the Securities are Original Issue Discount Securities, such portion of the
principal as is then accelerable under Section 6.2) of the outstanding
Securities of all series affected (voting as a single class), by notice to the
Trustee, may waive an existing Default or Event of Default with respect to the
Securities of such series and its consequences, except a Default in the
payment of Principal of or interest on any Security as specified in clauses
(a) or (b) of Section 6.1 or in respect of a covenant or provision of this
Indenture which cannot be modified or amended without the consent of the
Holder of each outstanding Security affected. Upon any such waiver, such
Default shall cease to exist, and any Event of Default with respect to the
Securities of such series arising therefrom shall be deemed to have been
cured, for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any right
consequent thereto.
SECTION 6.5 Control by Majority. Subject to Sections 7.1
and 7.2(v), the Holders of at least a majority in aggregate principal amount
(or, if any Securities are Original Issue Discount Securities, such portion of
the principal as is then accelerable under Section 6.2) of the outstanding
Securities of all series affected (voting as a single class) may direct the
time, method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee with
respect to the Securities of such series by this Indenture; provided, that the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that may involve the Trustee in personal liability or that the
Trustee determines in good faith may be unduly prejudicial to the rights of
Holders not joining in the giving of such direction; and provided further,
that the Trustee may take any other action it deems proper that is not
inconsistent with any directions received from Holders of Securities
pursuant to this Section 6.5.
SECTION 6.6 Limitation on Suits. No Holder of any
Security of any series may institute any proceeding, judicial or otherwise,
with respect to this Indenture or the Securities of such series, or for the
appointment of a receiver or trustee, or for any other remedy hereunder,
unless:
(i) such Holder has previously given to the Trustee written
notice of a continuing Event of Default with respect to the
Securities of such series;
(ii) the Holders of at least 25% in aggregate principal amount
of outstanding Securities of all such series affected shall have made
written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(iii) such Holder or Holders have offered to the Trustee
indemnity reasonably satisfactory to the Trustee against any costs,
liabilities or expenses to be incurred in compliance with such
request;
(iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Securities of all such
affected series have not given the Trustee a direction that is
inconsistent with such written request.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
SECTION 6.7 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
of a Security to receive payment of Principal of or interest, if any, on such
Holder's Security on or after the respective due dates expressed on such
Security, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent
of such Holder.
SECTION 6.8 Collection Suit by Trustee. If an Event of
Default with respect to the Securities of any series in payment of Principal
or interest specified in clause (a) or (b) of Section 6.1 occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company for the whole amount (or such portion
thereof as specified in the terms established pursuant to Section 2.3 of
Original Issue Discount Securities) of Principal of, and accrued interest
remaining unpaid on, together with interest on overdue Principal of, and, to
the extent that payment of such interest is lawful, interest on overdue
installments of interest on, the Securities of such series, in each case at
the rate or Yield to Maturity (in the case of Original Issue Discount
Securities) specified in such Securities, and such further amount as shall be
sufficient to cover all amounts owing the Trustee under Section 7.7.
SECTION 6.9 Trustee May File Proofs of Claim. The
Trustee may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including
any claim for amounts due the Trustee under Section 7.7) and the Holders
allowed in any judicial proceedings relative to the Company (or any other
obligor on the Securities), its creditors or its property and shall be
entitled and empowered to collect and receive any moneys, securities or other
property payable or deliverable upon conversion or exchange of the Securities
or upon any such claims and to distribute the same, and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar
official in any such judicial proceeding is hereby authorized by each Holder
to make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it under Section 7.7. Nothing herein contained
shall be deemed to empower the Trustee to authorize or consent to, or
accept or adopt on behalf of any Holder, any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the
rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.10 Application of Proceeds. Any moneys collected
by the Trustee pursuant to this Article in respect of the Securities
of any series shall be applied in the following order at the date or dates
fixed by the Trustee and, in case of the distribution of such moneys on
account of Principal or interest, upon presentation of the several Securities
and coupons appertaining to such Securities in respect of which moneys have
been collected and noting thereon the payment, or issuing Securities of such
series and tenor in reduced principal amounts in exchange for the presented
Securities of such series and tenor if only partially paid, or upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 7.7 applicable to the Securities of such series in respect of
which moneys have been collected;
SECOND: In case the principal of the Securities of such series
in respect of which moneys have been collected shall not have become
and be then due and payable, to the payment of interest on the
Securities of such series in default in the order of the maturity of
the installments of such interest, with interest (to the extent that
such interest has been collected by the Trustee) upon the overdue
installments of interest at the same rate as the rate of interest or
Yield to Maturity (in the case of Original Issue Discount Securities)
specified in such Securities, such payments to be made ratably to the
persons entitled thereto, without discrimination or preference;
THIRD: In case the principal of the Securities of such series
in respect of which moneys have been collected shall have become and
shall be then due and payable, to the payment of the whole amount
then owing and unpaid upon all the Securities of such series for
Principal and interest, with interest upon the overdue Principal, and
(to the extent that such interest has been collected by the Trustee)
upon overdue installments of interest at the same rate as the rate of
interest or Yield to Maturity (in the case of Original Issue Discount
Securities) specified in the Securities of such series; and in case
such moneys shall be insufficient to pay in full the whole amount so
due and unpaid upon the Securities of such series, then to the
payment of such Principal and interest or Yield to Maturity, without
preference or priority of Principal over interest or Yield to
Maturity, or of interest or Yield to Maturity over Principal, or of
any installment of interest over any other installment of interest,
or of any Security of such series over any other Security of such
series, ratably to the aggregate of such Principal and accrued and
unpaid interest or Yield to Maturity; and
FOURTH: To the payment of the remainder, if any, to the
Company or any other person lawfully entitled thereto.
SECTION 6.11 Restoration of Rights and Remedies. If the
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then, and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored to
their former positions hereunder and thereafter all rights and remedies of the
Company, Trustee and the Holders shall continue as though no such proceeding
had been instituted.
SECTION 6.12 Undertaking for Costs. In any suit
for the enforcement of any right or remedy under this Indenture or in any suit
against the Trustee for any action taken or omitted by it as Trustee, in
either case in respect to the Securities of any series, a court may require
any party litigant in such suit (other than the Trustee) to file an
undertaking to pay the costs of the suit, and the court may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant
(other than the Trustee) in the suit having due regard to the merits and
good faith of the claims or defenses made by the party litigant. This
Section 6.12 does not apply to a suit by a Holder pursuant to Section 6.7
or a suit by Holders of more than 10% in principal amount of the
outstanding Securities of such series.
SECTION 6.13 Rights and Remedies Cumulative. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or wrongfully taken Securities in Section 2.8, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 6.14 Delay or Omission Not Waiver. No delay or
omission of the Trustee or of any Holder to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article 6 or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
ARTICLE 7
TRUSTEE
SECTION 7.1 General. The duties and responsibilities of
the Trustee shall be as provided by the Trust Indenture Act and as set forth
herein. Notwithstanding the foregoing, no provision of this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, unless it receives indemnity
satisfactory to it against any loss, liability or expense. 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 7.2 Certain Rights of Trustee. Subject to Trust
Indenture Act Sections 315(a) through (d):
(i) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, Officers'
Certificate, Opinion of Counsel (or both), statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper person or persons. The Trustee need not
investigate any fact or matter stated in the document, but the
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(ii) before the Trustee acts or refrains from acting, it may
require an Officers' Certificate and/or an Opinion of Counsel, which
shall conform to Section 10.4. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on
such certificate or opinion. Subject to Sections 7.1 and 7.2,
whenever in the administration of the trusts 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 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 by it under the
provisions of this Indenture upon the faith thereof;
(iii) the Trustee may act through its attorneys and agents not
regularly in its employ and shall not be responsible for the
misconduct or negligence of any agent or attorney appointed with due
care;
(iv) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein
specifically prescribed); and any Board Resolution may be evidenced
to the Trustee by a copy thereof certified by the Secretary or an
Assistant Secretary of the Company;
(v) 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 Holders, unless such
Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction;
(vi) the Trustee shall not be liable for any action it takes
or omits to take in good faith that it believes to be authorized or
within its rights or powers or for any action it takes or omits to
take in accordance with the direction of the Holders in accordance
with Section 6.5 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;
(vii) the Trustee may consult with counsel 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,
suffered or omitted by it hereunder in good faith and in reliance
thereon; and
(viii) prior to the occurrence of an Event of Default hereunder
and after the curing or waiving of all Events of Default, the Trustee
shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, Officers'
Certificate, Opinion of Counsel, Board Resolution, statement,
instrument, opinion, report, notice, request, consent, order,
approval, appraisal, bond, debenture, note, coupon, security, or
other paper or document unless requested in writing so to do by
the Holders of not less than a majority in aggregate principal
amount of the Securities of all series affected then outstanding;
provided 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 expenses or
liabilities as a condition to proceeding.
SECTION 7.3 Individual Rights of Trustee. The Trustee,
in its individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not the Trustee. Any Agent may do the
same with like rights. However, the Trustee is subject to Trust Indenture Act
Sections 310(b) and 311. For purposes of Trust Indenture Act Section
311(b)(4) and (6), the following terms shall mean:
(a) "cash transaction" means 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; and
(b) "self-liquidating paper" means 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,
manufacturing, 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 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.
SECTION 7.4 Trustee's Disclaimer. The recitals contained
herein and in the Securities (except the Trustee's certificate of
authentication) shall be taken as statements of the Company and not of the
Trustee and the Trustee assumes no responsibility for the correctness of the
same. Neither the Trustee nor any of its agents (i) makes any representation
as to the validity or adequacy of this Indenture or the Securities and (ii)
shall be accountable for the Company's use or application of the proceeds from
the Securities.
SECTION 7.5 Notice of Default. If any Default with
respect to the Securities of any series occurs and is continuing and if such
Default is known to the actual knowledge of a Responsible Officer with the
Corporate Trust Department of the Trustee, the Trustee shall give to each
Holder of Securities of such series notice of such Default within 90 days
after it occurs (i) if any Unregistered Securities of such series are then
outstanding, to the Holders thereof, by publication at least once in an
Authorized Newspaper in the Borough of Manhattan, The City of New York and at
least once in an Authorized Newspaper in London and (ii) to all Holders of
Securities of such series in the manner and to the extent provided in Section
313(c) of the Trust Indenture Act, unless such Default shall have been cured
or waived before the mailing or publication of such notice; provided, however,
that, except in the case of a Default in the payment of the Principal of or
interest on any Security, the Trustee shall be protected in withholding such
notice if the Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders.
SECTION 7.6 Reports by Trustee to Holders. Within 60
days after each May 15, beginning with May 15, 1996, the Trustee shall mail to
each Holder as and to the extent provided in Trust Indenture Act Section
313(c) a brief report dated as of such May 15, if required by Trust Indenture
Act Section 313(a).
SECTION 7.7 Compensation and Indemnity. The Company
shall pay to the Trustee such compensation as shall be agreed upon in writing
from time to time for its services. The compensation of the Trustee shall not
be limited by any law on compensation of a Trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses, disbursements and advances incurred or made by the
Trustee. Such expenses shall include the reasonable compensation and expenses
of the Trustee's agents, counsel and other persons not regularly in its
employ.
The Company shall indemnify the Trustee for, and hold it
harmless against, any loss or liability or expense incurred by it without
negligence or bad faith on its part arising out of or in connection with the
acceptance or administration of this Indenture and the Securities or the
issuance of the Securities or of any series thereof or the trusts hereunder
and the performance of duties under this Indenture and the Securities,
including the costs and expenses of defending itself against or
investigating any claim or liability and of complying with any process
served upon it or any of its officers in connection with the exercise or
performance of any of its powers or duties under this Indenture and the
Securities.
To secure the Company's payment obligations in this Section
7.7, the Trustee shall have a lien prior to the Securities on all money or
property held or collected by the Trustee, in its capacity as Trustee, except
money or property held in trust to pay Principal of, and interest on
particular Securities.
The obligations of the Company under this Section to compensate
and indemnify the Trustee and each predecessor Trustee and to pay or reimburse
the Trustee and each predecessor Trustee for expenses, disbursements and
advances shall constitute additional indebtedness hereunder and shall survive
the satisfaction and discharge of this Indenture or the rejection or
termination of this Indenture under bankruptcy law. Such additional
indebtedness shall be a senior claim to that of the Securities 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 Securities or coupons,
and the Securities are hereby subordinated to such senior claim. If the
Trustee renders services and incurs expenses following an Event of Default
under Section 6.1(d) or Section 6.1(e) hereof, the parties hereto and the
holders by their acceptance of the Securities hereby agree that such expenses
are intended to constitute expenses of administration under any bankruptcy
law.
SECTION 7.8 Replacement of Trustee. A resignation or
removal of the Trustee as Trustee with respect to the Securities of any series
and appointment of a successor Trustee as Trustee with respect to the
Securities of any series shall become effective only upon the successor
Trustee's acceptance of appointment as provided in this Section 7.8.
The Trustee may resign as Trustee with respect to the
Securities of any series at any time by so notifying the Company in writing.
The Holders of a majority in principal amount of the outstanding Securities of
any series may remove the Trustee as Trustee with respect to the Securities
of such series by so notifying the Trustee in writing and may appoint a
successor Trustee with respect thereto with the consent of the Company. The
Company may remove the Trustee as Trustee with respect to the Securities of
any series if: (i) the Trustee is no longer eligible under Section 7.10 of
this Indenture; (ii) the Trustee is adjudged a bankrupt or insolvent; (iii) a
receiver or other public officer takes charge of the Trustee or its property;
or (iv) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed as Trustee with respect to
the Securities of any series, or if a vacancy exists in the office of Trustee
with respect to the Securities of any series for any reason, the Company shall
promptly appoint a successor Trustee with respect thereto. Within one year
after the successor Trustee takes office, the Holders of a majority in
principal amount of the outstanding Securities of such series may appoint a
successor Trustee in respect of such Securities to replace the successor
Trustee appointed by the Company. If the successor Trustee with respect to
the Securities of any series does not deliver its written acceptance required
by the next succeeding paragraph of this Section 7.8 within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of a majority in principal amount of the outstanding Securities of
such series may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect thereto.
A successor Trustee with respect to the Securities of any
series shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company. Immediately after the delivery of such written
acceptance, subject to the lien provided for in Section 7.7, (i) the retiring
Trustee shall transfer all property held by it as Trustee in respect of the
Securities of such series to the successor Trustee, (ii) the resignation or
removal of the retiring Trustee in respect of the Securities of such series
shall become effective and (iii) the successor Trustee shall have all the
rights, powers and duties of the Trustee in respect of the Securities of such
series under this Indenture. A successor Trustee shall mail notice of its
succession to each Holder of Securities of such series.
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, powers and trusts
referred to in the preceding paragraph.
The Company shall give notice of any resignation and any
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee in respect of the Securities of such series
to all Holders of Securities of such series. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
Notwithstanding replacement of the Trustee with respect to the
Securities of any series pursuant to this Section 7.8, the Company's
obligations under Section 7.7 shall continue for the benefit of the retiring
Trustee.
SECTION 7.9 Successor Trustee by Merger, Etc. If the
Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation or
national banking association, the resulting, surviving or transferee
corporation or national banking association without any further act shall be
the successor Trustee with the same effect as if the successor Trustee had
been named as the Trustee herein.
SECTION 7.10 Eligibility. This Indenture shall always
have a Trustee who satisfies the requirements of Trust Indenture Act Section
310(a). The Trustee shall have a combined capital and surplus of at least
$25,000,000 as set forth in its most recent published annual report of
condition.
SECTION 7.11 Money Held in Trust. The Trustee shall not
be liable for interest on any money received by it except as the Trustee may
agree in writing with the Company. Money held in trust by the Trustee need
not be segregated from other funds except to the extent required by law and
except for money held in trust under Article 8 of this Indenture.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS.
SECTION 8.1 Satisfaction and Discharge of Indenture. If
at any time (a) the Company shall have paid or caused to be paid the principal
of and interest on all the Securities of any series outstanding hereunder
(other than Securities of such series which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 2.8) as and
when the same shall have become due and payable, or (b) the Company shall have
delivered to the Trustee for cancellation all securities of any series
theretofore authenticated (other than any Securities of such series which
shall have been destroyed, lost or stolen and which shall have been replaced
or paid as provided in Section 2.8) or (c) (i) all the securities of such
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 8.4) or U.S. Government Obligations, maturing as to principal and
interest in such amounts and at such times as will insure the availability
of cash sufficient to pay at maturity or upon redemption all Securities of
such series (other than any Securities of such series which shall have been
destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 2.8) not theretofore delivered to the Trustee for
cancellation, including principal and interest due or to become due on or
prior to such date of maturity as the case may be, and if, in any such
case, the Company shall also pay or cause to be paid all other sums payable
hereunder by the Company with respect to Securities of such series, then
this Indenture shall cease to be of further effect with respect to
Securities of such series (except as to (i) rights of registration of
transfer and exchange of securities of such series, and the Company's right
of optional redemption, if any, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities, (iii) rights of holders 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 to receive mandatory sinking fund payments, if any, (iv) the
rights, obligations and immunities of the Trustee hereunder and (v) the
rights of the Securityholders of such series as beneficiaries hereof with
respect to the property so deposited with the Trustee payable to all or any
of them), 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 with respect to such series;
provided, that the rights of Holders of the Securities to receive amounts
in respect of principal of and interest on the Securities held by them
shall not be delayed longer than required by then-applicable mandatory
rules or policies of any securities exchange upon which the Securities 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 Securities of such series.
SECTION 8.2 Application by Trustee of Funds Deposited for
Payment of Securities. Subject to Section 8.4 and to the subordination
provisions of Article 11 hereof, all moneys deposited with the Trustee
pursuant to Section 8.1 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 Securities
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 8.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect
to Securities of any series, all moneys then held by any paying agent under
the provisions of this Indenture with respect to such series of Securities
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 8.4 Return of Moneys Held by Trustee and Paying
Agent Unclaimed for Two Years. 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 Security 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.
SECTION 8.5 Defeasance and Discharge of Indenture. The
Company shall be deemed to have paid and shall be discharged from any and all
obligations in respect of the Securities of any series, on the 123rd day after
the deposit referred to in clause (A) hereof has been made, and the provisions
of this Indenture shall no longer be in effect with respect to the Securities
of such series (and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same), except as to: (a) rights of
registration of transfer and exchange, and the Company's right of optional
redemption, (b) substitution of apparently mutilated, defaced, destroyed, lost
or stolen Securities, (c) rights of holders to receive payments of principal
thereof and interest thereon, upon the original stated due dates therefor (but
not upon acceleration), (d) the rights, obligations and immunities of the
Trustee hereunder and (e) the rights of the Securityholders of such series as
beneficiaries hereof with respect to the property so deposited with the
Trustee payable to all or any of them; provided that the following conditions
shall have been satisfied:
(A) with reference to this provision the Company has deposited or
caused to be irrevocably deposited with the Trustee (or another trustee
satisfying the requirements of Sections 7.8 and 7.10) as trust funds in
trust, specifically pledged as security for, and dedicated solely to,
the benefit of the Holders of the Securities of such series, (i) money
in an amount, or (ii) U.S. Government Obligations which through the
payment of interest and principal in respect thereof in accordance with
their terms will provide not later than one day before the due date of
any payment referred to in subclause (x) or (y) of this clause (A)
money in an amount, 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 and discharge without consideration of the
reinvestment of such interest and after payment of all federal, state
and local taxes or other charges and assessments in respect thereof
payable by the Trustee (x) the principal of, premium, if any, and each
installment of interest on the outstanding Securities of such series on
the due dates thereof and (y) any mandatory sinking fund payments or
analogous payments applicable to the Securities of such series on the
day on which such payments are due and payable in accordance with the
terms of Securities of such series and the Indenture with respect to
the Securities of such series;
(B) the Company has delivered to the Trustee (i) either (x) an
Opinion of Counsel to the effect that Holders of Securities of such
series will not recognize income, gain or loss for federal income tax
purposes as a result of the Company's exercise of its option under this
Section 8.5 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,
which Opinion of Counsel must be based upon a ruling of the Internal
Revenue Service to the same effect or a change in applicable federal
income tax law or related treasury regulations after the date of this
Indenture or (y) a ruling directed to the Trustee received from the
Internal Revenue Service to the same effect as the aforementioned
Opinion of Counsel and (ii) an Opinion of Counsel to the effect that
the creation of the defeasance trust does not violate the Investment
Company Act of 1940 and after the passage of 123 days following the
deposit, the trust fund will not be subject to the effect of Section
547 of the U.S. Bankruptcy Code or Section 15 of the New York Debtor
and Creditor Law;
(C) immediately after giving effect to such deposit on a pro
forma basis, no Event of Default, or event that after the giving of
notice or lapse of time or both would become an Event of Default,
shall have occurred and be continuing on the date of such deposit or
during the period ending on the 123rd day after the date of such
deposit, and such deposit shall not result in a breach or violation
of, or constitute a default under, any other agreement or instrument
to which the Company is a party or by which the Company is bound;
(D) the Company is not prohibited from making payments in
respect of the Securities by Article 11 hereof; and
(E) if at such time the Securities of such series are listed
on a national securities exchange, the Company has delivered to the
Trustee an Opinion of Counsel to the effect that the Securities of
such series will not be delisted as a result of such deposit,
defeasance and discharge.
SECTION 8.6 Defeasance of Certain Obligations. The
Company may omit to comply with any term, provision or condition set forth in,
and this Indenture will no longer be in effect with respect to, any covenant
in Article 4 or Section 5.1 established pursuant to Section 2.3 in any
indenture supplemental hereto and clause (c) (with respect to any covenants in
Article 4 or Section 5.1 established pursuant to Section 2.3 in any indenture
supplemental hereto) and clause (f) of Section 6.1 shall be deemed not to be
an Event of Default, and the provisions of Article 11 shall not apply with
respect to the Securities of any series, if
(A) with reference to this Section 8.6, the Company has
deposited or caused to be irrevocably deposited with the Trustee (or
another trustee satisfying the requirements of Section 7.8) as trust
funds in trust, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of the Securities of such
series and the Indenture with respect to the Securities of such
series, (i) money in an amount or (ii) U.S. Government Obligations
which through the payment of interest and principal in respect
thereof in accordance with their terms will provide not later than
one day before the due dates thereof or earlier redemption
(irrevocably provided for under agreements satisfactory to the
Trustee), as the case may be, of any payment referred to in subclause
(x) or (y) of this clause (A) money in an amount, 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 and
discharge without consideration of the reinvestment of such interest
and after payment of all federal, state and local taxes or other
charges and assessments in respect thereof payable by the Trustee (x)
the principal of, premium, if any, and each installment of interest
on the outstanding Securities on the due date thereof or earlier
redemption (irrevocably provided for under arrangements satisfactory
to the Trustee), as the case may be, and (y) any mandatory sinking
fund payments or analogous payments applicable to the Securities of
such series and the Indenture with respect to the Securities of such
series on the day on which such payments are due and payable in
accordance with the terms of the Indenture and of Securities of such
series and the Indenture with respect to the Securities of such
series;
(B) the Company has delivered to the Trustee (i) an Opinion of
Counsel to the effect that Holders of Securities of such series will
not recognize income, gain or loss for federal income tax purposes as
a result of the Company's exercise of its option under this Section
8.6 and will be subject to federal income tax on the same amount and
in the same manner and at the same times as would have been the case
if such deposit and defeasance had not occurred and (ii) an Opinion
of Counsel to the effect that the creation of the defeasance trust
does not violate the Investment Company Act of 1940 and after the
passage of 123 days following the deposit, the trust fund will not be
subject to the effect of Section 547 of the U.S. Bankruptcy Code or
Section 15 of the New York Debtor and Creditor Law;
(C) immediately after giving effect to such deposit on a pro
forma basis, no Event of Default, or event that after the giving of
notice or lapse of time or both would become an Event of Default,
shall have occurred and be continuing on the date of such deposit or
during the period ending on the 123rd day after the date of such
deposit, and such deposit shall not result in a breach or violation
of, or constitute a default under, any other agreement or instrument
to which the Company is a party or by which the Company is bound;
(D) the Company is not prohibited from making payments in
respect of the Securities by Article 11 hereof; and
(E) if at such time the Securities of such series are listed
on a national securities exchange, the Company has delivered to the
Trustee an Opinion of Counsel to the effect that the Securities of
such series will not be delisted as a result of such deposit,
defeasance and discharge.
SECTION 8.7 Reinstatement. If the Trustee or paying
agent is unable to apply any monies or U.S. Government Obligations in
accordance with Article 8 by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to this Article until
such time as the Trustee or paying agent is permitted to apply all such monies
or U.S. Government Obligations in accordance with Article 8; provided,
however, that if the Company has made any payment of principal of or interest
on any Securities because of the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Securities to receive
such payment from the monies or U.S. Government Obligations held by the
Trustee or paying agent.
ARTICLE 9
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1 Without Consent of Holders. The Company and
the Trustee may amend or supplement this Indenture or the Securities of any
series without notice to or the consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency in this
Indenture; provided that such amendments or supplements shall not
materially and adversely affect the interests of the Holders;
(2) to comply with Article 5;
(3) to comply with any requirements of the Commission in
connection with the qualification of this Indenture under the Trust
Indenture Act;
(4) to evidence and provide for the acceptance of appointment
hereunder with respect to the Securities of any or all series by a
successor Trustee;
(5) to establish the form or forms or terms of Securities of
any series or of the coupons appertaining to such Securities as
permitted by Section 2.3;
(6) to provide for uncertificated or Unregistered Securities
and to make all appropriate changes for such purpose; and
(7) to make any change that does not materially and adversely
affect the rights of any Holder.
SECTION 9.2 With Consent of Holders. Subject to Sections
6.4 and 6.7, without prior notice to any Holders, the Company and the Trustee
may amend this Indenture and the Securities of any series with the written
consent of the Holders of a majority in principal amount of the outstanding
Securities of all series affected by such supplemental indenture (all such
series voting as one class), and the Holders of a majority in principal amount
of the outstanding Securities of all series affected thereby (all such series
voting as one class) by written notice to the Trustee may waive future
compliance by the Company with any provision of this Indenture or the
Securities of such series.
Notwithstanding the provisions of this Section 9.2, without the
consent of each Holder affected thereby, an amendment or waiver, including a
waiver pursuant to Section 6.4, may not:
(i) change the stated maturity of the Principal of, or any
sinking fund obligation or any installment of interest on, such
Holder's Security;
(ii) reduce the Principal amount thereof or the rate of interest
thereon (including any amount in respect of original issue discount);
(iii) reduce the above stated percentage of outstanding
Securities the consent of whose holders is necessary to modify or amend
the Indenture with respect to the Securities of the relevant series;
and
(iv) reduce the percentage in principal amount of outstanding
Securities of the relevant series the consent of whose Holders is
required for any such supplemental indenture, for any waiver of
compliance with certain provisions of this Indenture or certain
Defaults and their consequences provided for in this Indenture.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series of
Securities, or which modifies the rights of Holders of Securities of such
series with respect to such covenant or provision, shall be deemed not to
affect the rights under this Indenture of the Holders of Securities of any
other series or of the coupons appertaining to such Securities.
It shall not be necessary for the consent of any Holder under
this Section 9.2 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.2
becomes effective, the Company shall give to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. The Company
will mail supplemental indentures to Holders upon request. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture or
waiver.
SECTION 9.3 Revocation and Effect of Consent. Until an
amendment or waiver becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the Security of the
consenting Holder, even if notation of the consent is not made on any
Security. However, any such Holder or subsequent Holder may revoke the
consent as to its Security or portion of its Security. Such revocation shall
be effective only if the Trustee receives the notice of revocation before the
date the amendment, supplement or waiver becomes effective. An amendment,
supplement or waiver shall become effective with respect to any Securities
affected thereby on receipt by the Trustee of written consents from the
requisite Holders of outstanding Securities affected thereby.
The Company may, but shall not be obligated to, fix a record
date (which may be not less than five nor more than 60 days prior to the
solicitation of consents) for the purpose of determining the Holders of the
Securities of any series affected entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the
immediately preceding paragraph, those Persons who were such Holders at such
record date (or their duly designated proxies) and only those Persons shall be
entitled to consent to such amendment, supplement or waiver or to revoke any
consent previously given, whether or not such Persons continue to be such
Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective with
respect to the Securities of any series affected thereby, it shall bind every
Holder of such Securities unless it is of the type described in any of clauses
(i) through (iv) of Section 9.2. In case of an amendment or waiver of the
type described in clauses (i) through (iv) of Section 9.2, the amendment or
waiver shall bind each such Holder who has consented to it and every
subsequent Holder of a Security that evidences the same indebtedness as the
Security of the consenting Holder.
SECTION 9.4 Notation on or Exchange of Securities. If an
amendment, supplement or waiver changes the terms of any Security, the Trustee
may require the Holder thereof to deliver it to the Trustee. The Trustee may
place an appropriate notation on the Security about the changed terms and
return it to the Holder and the Trustee may place an appropriate notation on
any Security of such series thereafter authenticated. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Security
shall issue and the Trustee shall authenticate a new Security of the same
series and tenor that reflects the changed terms.
SECTION 9.5 Trustee to Sign Amendments, Etc. The Trustee
shall be entitled to receive, and shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of any amendment, supplement or
waiver authorized pursuant to this Article 9 is authorized or permitted by
this Indenture, stating that all requisite consents have been obtained or that
no consents are required and stating that such supplemental indenture
constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to
customary exceptions. Subject to the preceding sentence, the Trustee shall
sign such amendment, supplement or waiver if the same does not adversely
affect the rights of the Trustee. The Trustee may, but shall not be
obligated to, execute any such amendment, supplement or waiver that affects
the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
SECTION 9.6 Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article 9 shall conform to
the requirements of the Trust Indenture Act as then in effect.
ARTICLE 10
MISCELLANEOUS
SECTION 10.1 Trust Indenture Act of 1939. This Indenture
shall incorporate and be governed by the provisions of the Trust Indenture Act
that are required to be part of and to govern indentures qualified under the
Trust Indenture Act.
SECTION 10.2 Notices. Any notice or communication shall
be sufficiently given if written and (a) if delivered in person when received
or (b) if mailed by first class mail 5 days after mailing, or (c) as between
the Company and the Trustee if sent by facsimile transmission, when
transmission is confirmed, in each case addressed as follows:
if to the Company:
The AES Corporation
1001 North 19th Street
Arlington, VA 22209
Telecopy: (703) 528-4510
Attention: General Counsel
if to the Trustee:
The First National Bank of Chicago
Corporate Trust Services Division
One First National Plaza
Chicago, Il 60670-0126
Telecopy: (312) 407-1708
Attention: Corporate Trust Administration
The Company or the Trustee by written notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication shall be sufficiently given to
Holders of any Unregistered Securities, by publication at least once in an
Authorized Newspaper in The City of New York, or with respect to any Security
the interest on which is based on the offered quotations in the interbank
Eurodollar market for dollar deposits at least once in an Authorized Newspaper
in London, and by mailing to the Holders thereof who have filed their names
and addresses with the Trustee pursuant to Section 313(c)(2) of the Trust
Indenture Act at such addresses as were so furnished to the Trustee and to
Holders of Registered Securities by mailing to such Holders at their addresses
as they shall appear on the Security Register. Notice mailed shall be
sufficiently given if so mailed within the time prescribed. Copies of any
such communication or notice to a Holder shall also be mailed to the Trustee
and each Agent at the same time.
Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders.
Except as otherwise provided in this Indenture, if a notice or communication
is mailed in the manner provided in this Section 10.2, it is duly given,
whether or not the addressee receives it.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee,
but such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
In case it shall be impracticable to give notice as herein
contemplated, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose
hereunder.
SECTION 10.3 Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the
Trustee:
(i) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with;
and
(ii) an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.
SECTION 10.4 Statements Required in Certificate or
Opinion. Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each person signing such certificate or
opinion has read such covenant or condition and the definitions
herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinion
contained in such certificate or opinion is based;
(iii) a statement that, in the opinion of each such person, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of each
such person, such condition or covenant has been complied with;
provided, however, that, with respect to matters of fact, an Opinion
of Counsel may rely on an Officers' Certificate or certificates of
public officials.
SECTION 10.5 Evidence of Ownership. The Company, the Trustee
and any agent of the Company or the Trustee may deem and treat the Holder of
any Unregistered Security and the Holder of any coupon as the absolute owner
of such Unregistered Security or coupon (whether or not such Unregistered
Security or coupon shall be overdue) for the purpose of receiving payment
thereof or on account thereof and for all other purposes, and neither the
Company, the Trustee, nor any agent of the Company or the Trustee shall
be affected by any notice to the contrary. The fact of the holding by any
Holder of an Unregistered Security, and the identifying number of such
Security and the date of his holding the same, may be proved by the production
of such Security or by a certificate executed by any trust company, bank,
banker or recognized securities dealer wherever situated satisfactory to the
Trustee, if such certificate shall be deemed by the Trustee to be
satisfactory. Each such certificate shall be dated and shall state that on
the date thereof a Security bearing a specified identifying number was
deposited with or exhibited to such trust company, bank, banker or
recognized securities dealer by the person named in such certificate. Any
such certificate may be issued in respect of one or more Unregistered
Securities specified therein. The holding by the person named in any such
certificate of any Unregistered Securities specified therein shall be
presumed to continue for a period of one year from the date of such
certificate unless at the time of any determination of such holding (1)
another certificate bearing a later date issued in respect of the same
Securities shall be produced or (2) the Security specified in such
certificate shall be produced by some other Person, or (3) the Security
specified in such certificate shall have ceased to be outstanding. Subject
to Article 7, the fact and date of the execution of any such instrument and
the amount and numbers of Securities held by the Person so executing such
instrument may also be proven in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in any other manner
which the Trustee may deem sufficient.
The Company, the Trustee and any agent of the Company or the
Trustee may deem and treat the person in whose name any Registered Security
shall be registered upon the Security Register for such series as the absolute
owner of such Registered Security (whether or not such Registered Security
shall be overdue and notwithstanding any notation of ownership or other
writing thereon) for the purpose of receiving payment of or on account of the
Principal of and, subject to the provisions of this Indenture, interest on
such Registered Security and for all other purposes; and neither the Company
nor the Trustee nor any agent of the Company or the Trustee shall be affected
by any notice to the contrary.
SECTION 10.6 Rules by Trustee, Paying Agent or Registrar.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Paying Agent or Registrar may make reasonable rules for its
functions.
SECTION 10.7 Payment Date Other Than a Business Day. If
any date for payment of Principal or interest on any Security shall not be a
Business Day at any place of payment, then payment of Principal of or interest
on such Security, as the case may be, need not be made on such date, but may
be made on the next succeeding Business Day at any place of payment with the
same force and effect as if made on such date and no interest shall accrue in
respect of such payment for the period from and after such date.
SECTION 10.8 Governing Law. The laws of the State of New
York shall govern this Indenture and the Securities.
SECTION 10.9 No Adverse Interpretation of Other
Agreements. This Indenture may not be used to interpret another indenture or
loan or debt agreement of the Company or any Subsidiary of the Company. Any
such indenture or agreement may not be used to interpret this Indenture.
SECTION 10.10 Successors. All agreements of the Company in
this Indenture and the Securities shall bind its successors. All agreements
of the Trustee in this Indenture shall bind its successors.
SECTION 10.11 Duplicate Originals. The parties may sign
any number of copies of this Indenture. Each signed copy shall be an
original, but all of them together represent the same agreement.
SECTION 10.12 Separability. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 10.13 Table of Contents, Headings, Etc. The Table
of Contents and headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a
part hereof and shall in no way modify or restrict any of the terms and
provisions hereof.
SECTION 10.14 Incorporators, Stockholders, Officers and
Directors of Company Exempt from Individual Liability. No recourse under or
upon any obligation, covenant or agreement contained in this Indenture or any
indenture supplemental hereto, or in any Security or any coupons appertaining
thereto, or because of any indebtedness evidenced thereby, shall be had
against any incorporator, as such or against any past, present or future
stockholder, officer, director or employee, as such, of the Company or of any
successor, either directly or through the Company or any successor, under any
rule of law, statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the
Securities and the coupons appertaining thereto by the holders thereof and as
part of the consideration for the issue of the Securities and the coupons
appertaining thereto.
SECTION 10.15 Judgment Currency. The Company agrees, to
the fullest extent that it may effectively do so under applicable law, that
(a) if for the purpose of obtaining judgment in any court it is necessary to
convert the sum due in respect of the Principal of or interest on the
Securities of any series (the "Required Currency") into a currency in which a
judgment will be rendered (the "Judgment Currency"), the rate of exchange used
shall be the rate at which in accordance with normal banking procedures the
Trustee could purchase in The City of New York the Required Currency with the
Judgment Currency on the day on which final unappealable judgment is entered,
unless such day is not a Business Day, then, to the extent permitted by
applicable law, the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in The
City of New York the Required Currency with the Judgment Currency on the
Business Day preceding the day on which final unappealable judgment is entered
and (b) its obligations under this Indenture to make payments in the Required
Currency (i) shall not be discharged or satisfied by any tender, or any
recovery pursuant to any judgment (whether or not entered in accordance with
subsection (a)), in any currency other than the Required Currency, except to
the extent that such tender or recovery shall result in the actual receipt, by
the payee, of the full amount of the Required Currency expressed to be payable
in respect of such payments, (ii) shall be enforceable as an alternative or
additional cause of action for the purpose of recovering in the Required
Currency the amount, if any, by which such actual receipt shall fall short of
the full amount of the Required Currency so expressed to be payable and (iii)
shall not be affected by judgment being obtained for any other sum due under
this Indenture.
ARTICLE 11
SUBORDINATION OF SECURITIES
SECTION 11.1 Agreement to Subordinate. The Company covenants
and agrees, and each Holder of Securities issued hereunder by his acceptance
thereof likewise covenants and agrees, that all Securities shall be issued
subject to the provisions of this Article; and each person holding any
Security, whether upon original issue or upon transfer, assignment or exchange
thereof accepts and agrees that the Principal of and interest on all
Securities issued hereunder shall, to the extent and in the manner herein set
forth, be subordinated and subject in right to the prior payment in full of
all Senior Debt.
SECTION 11.2 Payments to Securityholders. No payments on account
of Principal of, Change of Control purchase price, or interest on the Securities
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
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 default) with respect to Designated Senior 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 Debt or from an agent of such holders, no payments on account
of Principal or interest in respect of the Securities 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 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 Securities 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 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 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 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 or
interest on the indebtedness evidenced by the Securities, 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 Holders of the Securities 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 Holders
of the Securities or by the Trustee under this Indenture if received by them
or it, directly to the holders of Senior Debt (pro rata to such holders on the
basis of the respective amounts of Senior 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 Debt may have
been issued, as their respective interests may appear, to the extent necessary
to pay all Senior 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 Debt, before any
payment or distribution is made to the holders of the indebtedness evidenced
by the Securities 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 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 Debt or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any instruments evidencing any of such
Senior Debt may have been issued, as their respective interests may appear,
for application to the payment of all Senior Debt remaining unpaid until all
such Senior 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 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 Debt which may at the time be outstanding; provided, that (i) the
Senior 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 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 5 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 5. 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 11.5.
SECTION 11.3 Subrogation of Securities. Subject to the
payment in full of all Senior Debt, the holders of the Securities shall be
subrogated to the rights of the holders of Senior Debt to receive payments or
distributions of cash, property or securities of the Company applicable to the
Senior Debt until the principal of and interest on the Securities shall be
paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Debt of any cash, property or
securities to which the holders of the Securities 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 Debt by holders of the Securities or the Trustee on their behalf shall,
as between the Company, its creditors other than holders of Senior Debt and
the holders of the Securities, be deemed to be a payment by the Company to or
on account of the Senior Debt; and no payments or distributions of cash,
property or securities to or for the benefit of the Securityholders pursuant
to the subrogation provision of this Article, which would otherwise have been
paid to the holders of Senior Debt shall be deemed to be a payment by the
Company to or for the account of the Securities. 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 Securities, on the one
hand, and the holders of the Senior Debt, on the other hand.
Nothing contained in this Article or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Debt, and the holders
of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Securities the principal of and
interest on the Securities 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 Securities and creditors of the Company other
than the holders of the Senior Debt, nor shall anything herein or therein
prevent the holder of any Security 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 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
Sections 7.1 and 7.2, and the holders of the Securities 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 Securities, for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior 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 11.4 Authorization by Securityholders. Each
holder of a Security by his acceptance thereof authorizes the Trustee in his
behalf to take such action as may be 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 11.5 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 Securities 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 Debt or of any
default or event of default with respect to any Senior 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 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 Debt shall be outstanding, and,
prior to the receipt of any such written notice, the Trustee shall, subject to
Sections 7.1 and 7.2, 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 Security) 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 Securityholders
of amounts in connection with a redemption of Securities 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 Securityholders of amounts deposited with it pursuant to
Section 8.1.
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
Debt (or a trustee on behalf of such holder) to establish that such notice has
been given by a holder of Senior 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 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 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 11.6 Trustee's Relation to Senior 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 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 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 Section 7.7.
With respect to the holders of Senior 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 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 Debt and, subject to the provisions of
Sections 7.1 and 7.2, the Trustee shall not be liable to any holder of Senior
Debt if it shall pay over or deliver to holders of Securities, the Company or
any other person moneys or assets to which any holder of Senior Debt shall be
entitled by virtue of this Article or otherwise.
SECTION 11.7 No Impairment of Subordination. No right of
any present or future holder of any Senior 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.
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the date first written above.
(SEAL) THE AES CORPORATION
Attest: as the Company
/s/ Maureen B. Shearer
- -----------------------------
By: /s/ Barry J. Sharp
--------------------------------
Name: Barry J. Sharp
Title: Vice President & Chief
Financial Officer
(SEAL) THE FIRST NATIONAL BANK OF CHICAGO,
Attest: as Trustee
/s/
- -----------------------------
By: /s/ Richard D. Manella
--------------------------------
Name: Richard D. Manella
Title: Vice President
STATE OF Virginia )
-------------- )
COUNTY OF Arlington )
-------------- )
BEFORE ME, the undersigned authority, on this __ day of
____________, 1996, personally appeared Barry J. Sharp, VP & CFO of The AES
Corporation, a Delaware 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 corporation for the
purposes and consideration herein expressed and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL THIS ____ DAY OF JUNE, 1995.
(SEAL)
/s/ Maureen B. Shearer
---------------------------------
NOTARY PUBLIC, STATE OF VIRGINIA
Print Name: Maureen B. Shearer
Commission Expires: May 31, 1999
STATE OF ILLINOIS )
)
COUNTY OF COOK )
BEFORE ME, the undersigned authority, on this 27th day of
June, 1996, personally appeared Richard D. Manella, Vice President of
The First National Bank of Chicago, a national association, 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 27TH DAY OF JUNE, 1996.
(SEAL)
/s/ Somsri Helmer
---------------------------------
NOTARY PUBLIC, STATE OF NEW YORK
Print Name:_____________________
Commission Expires:_____________
EXHIBIT 12.1
THE AES CORPORATION AND SUBSIDIARIES
STATEMENT RE: CALCULATIONS OF RATIO OF EARNINGS TO FIXED CHARGES
(In millions, unaudited)
<TABLE>
Three Months
Year Ended December 31, Ended
--------------------------------------- March 31,
1994 1995 1996 1997 1998 1999
----- ----- ----- ----- ----- ------------
<S> <C> <C> <C> <C> <C> <C>
Actual:
COMPUTATION OF EARNINGS:
Income from continuing operations
before income taxes............... $ 151 $ 175 $ 207 $ 284 $ 546 $ (1)
Adjustment for undistributed equity
earnings, net of distributions......... (12) (5) (34) (78) (107) 109
Interest expense....................... 122 122 138 228 460 125
Depreciation of previously capitalized
interest.......................... 4 4 4 4 6 2
Net amortization of issuance costs..... 4 5 6 16 25 8
----- ----- ----- ----- ----- -----
Earnings $ 269 $ 301 $ 321 $ 454 $ 930 $ 243
===== ===== ===== ===== ===== =====
COMPUTATION OF FIXED CHARGES:
Interest expensed and capitalized
amounts (including construction
related fixed charges)............ $ 124 $ 132 $ 165 $ 295 $ 539 $ 143
Net amortization of issuance costs
(including capitalized amounts)... 4 5 6 16 25 8
----- ----- ----- ----- ----- -----
Fixed charges.......................... $ 128 $ 137 $ 171 $ 311 $ 564 $ 151
===== ===== ===== ===== ===== =====
Ratio of earnings to fixed charges 2.10x 2.20x 1.88x 1.46x 1.65x 1.61x
</TABLE>
INDEPENDENT AUDITORS' CONSENT Exhibit 23.1
We consent to the incorporation by reference in this Registration on Form S-3
of our report dated February 4, 1999, included in the Current Report of The
AES Corporation on Form 8-K, dated March 18, 1999, and of our report dated
February 4, 1999 on the related financial statement schedules included in the
Annual Report of The AES Corporation on Form 10-K for the year ended December
31, 1998, and to the reference to us under the heading "Experts" in each
prospectus, which are part of this Registration Statement.
/S/ Deloitte & Touche LLP
McLean, Virginia
June 29, 1999
EXHIBIT 24.1
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Dennis W. Bakke, Barry J. Sharp and William R. Luraschi and each of them, his
or he true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign and file a registration
statement on Form S- 3 relating to securities to be offered by TheAES
Corproation and any and all amendments (including post-effective amendments)
thereto, to sign any related registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, and to file the same with all
exhibits thereto, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority
to do and perform each and every act and thing requisite or necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she 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 substitutes or
substitutes, may lawfully do or cause to be done by virtue hereof.
<TABLE>
<S> <C> <C>
Signature Title Date
--------- ----- ----
/s/ Roger W. Sant
---------------------------- Chairman-of-the-Board June 29, 1999
Roger W. Sant
/s/ Dennis W. Bakke
----------------------------- President, Chief Executive Officer and June 29, 1999
Dennis W. Bakke Director (Principal Executive Officer)
/s/ Alice F. Emerson
----------------------------- Director June 29, 1999
Alice F. Emerson
/s/ Robert F. Hemphill, Jr.
----------------------------- Director June 29, 1999
Robert F. Hemphill, Jr.
----------------------------- Director
Frank Jungers
----------------------------- Director
John H. McArthur
1
<PAGE>
Signature Title Date
--------- ----- ----
/s/ Hazel O'Leary
----------------------------- Director June 29, 1999
Hazel O'Leary
----------------------------- Director
Thomas I. Unterberg
----------------------------- Director
Robert H. Waterman, Jr.
----------------------------- Vice President and Chief Financial
Barry J. Sharp Officer (Principal Financial and
Accounting Officer)
</TABLE>
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)___
------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
---------------
THE AES CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 54-1163725
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
1001 North 19th Street
Arlington, Virginia 22209
(Address of principal executive offices) (Zip Code)
Senior Debt Securities
Senior Subordinated Debt Securities
Junior Subordinated Debt Securities
Junior Subordinated Debt Trust Securities
Guaranty with Respect to Preferred Securities of AES Trust III
Guaranty with Respect to Preferred Securities of AES Trust IV
Guaranty with Respect to Preferred Securities of AES Trust V
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part
of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of
the Act.
<PAGE>
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the
United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the City of Chicago and State of Illinois, on
the 29th day of June, 1999.
The First National Bank of Chicago,
Trustee
By /s/ Steven M. Wagner
------------------------------
Steven M. Wagner
First Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U
S WEST Capital Funding, Inc., filed with the Securities and Exchange Commission
on May 6, 1998 (Registration No. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
June 29, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between The AES
Corporation and The First National Bank of Chicago, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Steven M. Wagner
-------------------------------
Steven M. Wagner
First Vice President
<PAGE>
EXHIBIT 7
<TABLE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for March 31, 1999
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
Dollar Amounts in thousands C400
-----
RCFD BIL MIL THOU
---- -------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RCFD
RC-A): ----
a. Noninterest-bearing balances and currency and coin(1)................... 0081 3,809,517 1.a
b. Interest-bearing balances(2)............................................ 0071 4,072,166 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)............... 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)............ 1773 12,885,728 2.b
3. Federal funds sold and securities purchased under agreements to
resell..................................................................... 1350 4,684,756 3.
4. Loans and lease financing receivables: RCFD
a. Loans and leases, net of unearned income (from Schedule ----
RC-C)................................................................... 2122 34,304,806 4.a
b. LESS: Allowance for loan and lease losses .............................. 3123 411,476 4.b
c. LESS: Allocated transfer risk reserve .................................. 3128 3,884 4.c
RCFD
d. Loans and leases, net of unearned income, allowance, and ----
reserve (item 4.a minus 4.b and 4.c) ................................... 2125 33,889,446 4.d
5. Trading assets (from Schedule RD-D)........................................ 3545 5,100,499 5.
6. Premises and fixed assets (including capitalized leases)................... 2145 754,052 6.
7. Other real estate owned (from Schedule RC-M)............................... 2150 5,244 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)............................................. 2130 201,068 8.
9. Customers' liability to this bank on acceptances outstanding............... 2155 265,041 9.
10. Intangible assets (from Schedule RC-M)..................................... 2143 285,709 10.
11. Other assets (from Schedule RC-F).......................................... 2160 2,987,184 11.
12. Total assets (sum of items 1 through 11)................................... 2170 68,940,410 12.
<FN>
- ---------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</FN>
</TABLE>
<PAGE>
<TABLE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
Dollar Amounts in
thousands
-----------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of columns A and C ----
from Schedule RC-E, part 1)............................................. 2200 22,163,664 13.a
(1) Noninterest-bearing(1).............................................. 6631 9,740,100 13.a1
(2) Interest-bearing.................................................... 6636 12,423,564 13.a2
RCFN
b. In foreign offices, Edge and Agreement subsidiaries, and ----
IBFs (from Schedule RC-E, part II)...................................... 2200 19,273,426 13.b
(1) Noninterest bearing................................................. 6631 334,741 13.b1
(2) Interest-bearing.................................................... 6636 18,938,685 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,405,792 14
15. a. Demand notes issued to the U.S. Treasury................................ RCON 2840 173,505 15.a
b. Trading Liabilities (from Schedule RC-D)................................ RCFD 3548 4,824,567 15.b
RCFD
16. Other borrowed money: ----
a. With original maturity of one year or less.............................. 2332 7,453,761 16.a
b. With original maturity of more than one year............................ A547 330,300 16.b
c. With original maturity of more than three years......................... A548 357,737 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding.................... 2920 265,041 18.
19. Subordinated notes and debentures.......................................... 3200 2,600,000 19.
20. Other liabilities (from Schedule RC-G)..................................... 2930 1,878,367 20.
21. Total liabilities (sum of items 13 through 20)............................. 2948 63,726,160 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.............................. 3838 0 23.
24. Common stock............................................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock)................... 3839 3,239,836 25.
26. a. Undivided profits and capital reserves.................................. 3632 1,813,367 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities.............................................................. 8434 (37,357) 26.b
c. Accumulated net gains (losses) on cash flow hedges...................... 4336 0 26.c
27. Cumulative foreign currency translation adjustments........................ 3284 (2,454) 27.
28. Total equity capital (sum of items 23 through 27).......................... 3210 5,214,250 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)...................................... 3300 68,940,410 29.
<FN>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of hte statement below that best ------------
describes the most comprehensive level of auditing work performed for the bank Number
by independent external auditors as of any date during 1996........................RCFD 6724..... N/A M.1.
------------
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accouting firm (may be required by
state chartering authority)
- ------------
(1) Includes total demand deposits and noninterest-bearing time and savings deposits.
</FN>
</TABLE>
EXHIBIT 25.5
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)__
---------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
---------------
THE AES TRUST III
(Exact name of obligor as specified in its charter)
Delaware to be applied for
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
1001 North 19th Street
Arlington, Virginia 22209
(Address of principal executive offices) (Zip Code)
Preferred Securities
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part
of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of
the Act.
<PAGE>
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the
United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the City of Chicago and State of Illinois, on
the 29th day of June, 1999.
The First National Bank of Chicago,
Trustee
By /s/ Steven M. Wagner
-------------------------------
Steven M. Wagner
First Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U
S WEST Capital Funding, Inc., filed with the Securities and Exchange Commission
on May 6, 1998 (Registration No. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
June 29, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of The Amended and Restated Declaration of
Trust of AES Trust III, the undersigned, in accordance with Section 321(b) of
the Trust Indenture Act of 1939, as amended, hereby consents that the reports
of examinations of the undersigned, made by Federal or State authorities
authorized to make such examinations, may be furnished by such authorities to
the Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Steven M. Wagner
--------------------------------
Steven M. Wagner
First Vice President
<PAGE>
EXHIBIT 7
<TABLE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for March 31, 1999
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
Dollar Amounts in thousands C400
-----
RCFD BIL MIL THOU
---- -------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RCFD
RC-A): ----
a. Noninterest-bearing balances and currency and coin(1)................... 0081 3,809,517 1.a
b. Interest-bearing balances(2)............................................ 0071 4,072,166 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)............... 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)............ 1773 12,885,728 2.b
3. Federal funds sold and securities purchased under agreements to
resell..................................................................... 1350 4,684,756 3.
4. Loans and lease financing receivables: RCFD
a. Loans and leases, net of unearned income (from Schedule ----
RC-C)................................................................... 2122 34,304,806 4.a
b. LESS: Allowance for loan and lease losses .............................. 3123 411,476 4.b
c. LESS: Allocated transfer risk reserve .................................. 3128 3,884 4.c
RCFD
d. Loans and leases, net of unearned income, allowance, and ----
reserve (item 4.a minus 4.b and 4.c) ................................... 2125 33,889,446 4.d
5. Trading assets (from Schedule RD-D)........................................ 3545 5,100,499 5.
6. Premises and fixed assets (including capitalized leases)................... 2145 754,052 6.
7. Other real estate owned (from Schedule RC-M)............................... 2150 5,244 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)............................................. 2130 201,068 8.
9. Customers' liability to this bank on acceptances outstanding............... 2155 265,041 9.
10. Intangible assets (from Schedule RC-M)..................................... 2143 285,709 10.
11. Other assets (from Schedule RC-F).......................................... 2160 2,987,184 11.
12. Total assets (sum of items 1 through 11)................................... 2170 68,940,410 12.
<FN>
- ---------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</FN>
</TABLE>
<PAGE>
<TABLE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
Dollar Amounts in
thousands
-----------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of columns A and C ----
from Schedule RC-E, part 1)............................................. 2200 22,163,664 13.a
(1) Noninterest-bearing(1).............................................. 6631 9,740,100 13.a1
(2) Interest-bearing.................................................... 6636 12,423,564 13.a2
RCFN
b. In foreign offices, Edge and Agreement subsidiaries, and ----
IBFs (from Schedule RC-E, part II)...................................... 2200 19,273,426 13.b
(1) Noninterest bearing................................................. 6631 334,741 13.b1
(2) Interest-bearing.................................................... 6636 18,938,685 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,405,792 14
15. a. Demand notes issued to the U.S. Treasury................................ RCON 2840 173,505 15.a
b. Trading Liabilities (from Schedule RC-D)................................ RCFD 3548 4,824,567 15.b
RCFD
16. Other borrowed money: ----
a. With original maturity of one year or less.............................. 2332 7,453,761 16.a
b. With original maturity of more than one year............................ A547 330,300 16.b
c. With original maturity of more than three years......................... A548 357,737 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding.................... 2920 265,041 18.
19. Subordinated notes and debentures.......................................... 3200 2,600,000 19.
20. Other liabilities (from Schedule RC-G)..................................... 2930 1,878,367 20.
21. Total liabilities (sum of items 13 through 20)............................. 2948 63,726,160 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.............................. 3838 0 23.
24. Common stock............................................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock)................... 3839 3,239,836 25.
26. a. Undivided profits and capital reserves.................................. 3632 1,813,367 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities.............................................................. 8434 (37,357) 26.b
c. Accumulated net gains (losses) on cash flow hedges...................... 4336 0 26.c
27. Cumulative foreign currency translation adjustments........................ 3284 (2,454) 27.
28. Total equity capital (sum of items 23 through 27).......................... 3210 5,214,250 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)...................................... 3300 68,940,410 29.
<FN>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of hte statement below that best ------------
describes the most comprehensive level of auditing work performed for the bank Number
by independent external auditors as of any date during 1996........................RCFD 6724..... N/A M.1.
------------
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accouting firm (may be required by
state chartering authority)
- ------------
(1) Includes total demand deposits and noninterest-bearing time and savings deposits.
</FN>
</TABLE>
EXHIBIT 25.6
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)___
------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
---------------
THE AES TRUST IV
(Exact name of obligor as specified in its charter)
Delaware to be applied for
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
1001 North 19th Street
Arlington, Virginia 22209
(Address of principal executive offices) (Zip Code)
Preferred Securities
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part
of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of
the Act.
<PAGE>
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the
United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the City of Chicago and State of Illinois, on
the 29th day of June, 1999.
The First National Bank of Chicago,
Trustee
By /s/ Steven M. Wagner
----------------------------
Steven M. Wagner
First Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U
S WEST Capital Funding, Inc., filed with the Securities and Exchange Commission
on May 6, 1998 (Registration No. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
June 29, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of The Amended and Restated Declaration of
Trust of AES Trust IV, the undersigned, in accordance with Section 321(b) of
the Trust Indenture Act of 1939, as amended, hereby consents that the reports
of examinations of the undersigned, made by Federal or State authorities
authorized to make such examinations, may be furnished by such authorities to
the Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Steven M. Wagner
-----------------------------
Steven M. Wagner
First Vice President
<PAGE>
EXHIBIT 7
<TABLE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for March 31, 1999
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
Dollar Amounts in thousands C400
-----
RCFD BIL MIL THOU
---- -------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RCFD
RC-A): ----
a. Noninterest-bearing balances and currency and coin(1)................... 0081 3,809,517 1.a
b. Interest-bearing balances(2)............................................ 0071 4,072,166 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)............... 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)............ 1773 12,885,728 2.b
3. Federal funds sold and securities purchased under agreements to
resell..................................................................... 1350 4,684,756 3.
4. Loans and lease financing receivables: RCFD
a. Loans and leases, net of unearned income (from Schedule ----
RC-C)................................................................... 2122 34,304,806 4.a
b. LESS: Allowance for loan and lease losses .............................. 3123 411,476 4.b
c. LESS: Allocated transfer risk reserve .................................. 3128 3,884 4.c
RCFD
d. Loans and leases, net of unearned income, allowance, and ----
reserve (item 4.a minus 4.b and 4.c) ................................... 2125 33,889,446 4.d
5. Trading assets (from Schedule RD-D)........................................ 3545 5,100,499 5.
6. Premises and fixed assets (including capitalized leases)................... 2145 754,052 6.
7. Other real estate owned (from Schedule RC-M)............................... 2150 5,244 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)............................................. 2130 201,068 8.
9. Customers' liability to this bank on acceptances outstanding............... 2155 265,041 9.
10. Intangible assets (from Schedule RC-M)..................................... 2143 285,709 10.
11. Other assets (from Schedule RC-F).......................................... 2160 2,987,184 11.
12. Total assets (sum of items 1 through 11)................................... 2170 68,940,410 12.
<FN>
- ---------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</FN>
</TABLE>
<PAGE>
<TABLE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
Dollar Amounts in
thousands
-----------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of columns A and C ----
from Schedule RC-E, part 1)............................................. 2200 22,163,664 13.a
(1) Noninterest-bearing(1).............................................. 6631 9,740,100 13.a1
(2) Interest-bearing.................................................... 6636 12,423,564 13.a2
RCFN
b. In foreign offices, Edge and Agreement subsidiaries, and ----
IBFs (from Schedule RC-E, part II)...................................... 2200 19,273,426 13.b
(1) Noninterest bearing................................................. 6631 334,741 13.b1
(2) Interest-bearing.................................................... 6636 18,938,685 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,405,792 14
15. a. Demand notes issued to the U.S. Treasury................................ RCON 2840 173,505 15.a
b. Trading Liabilities (from Schedule RC-D)................................ RCFD 3548 4,824,567 15.b
RCFD
16. Other borrowed money: ----
a. With original maturity of one year or less.............................. 2332 7,453,761 16.a
b. With original maturity of more than one year............................ A547 330,300 16.b
c. With original maturity of more than three years......................... A548 357,737 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding.................... 2920 265,041 18.
19. Subordinated notes and debentures.......................................... 3200 2,600,000 19.
20. Other liabilities (from Schedule RC-G)..................................... 2930 1,878,367 20.
21. Total liabilities (sum of items 13 through 20)............................. 2948 63,726,160 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.............................. 3838 0 23.
24. Common stock............................................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock)................... 3839 3,239,836 25.
26. a. Undivided profits and capital reserves.................................. 3632 1,813,367 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities.............................................................. 8434 (37,357) 26.b
c. Accumulated net gains (losses) on cash flow hedges...................... 4336 0 26.c
27. Cumulative foreign currency translation adjustments........................ 3284 (2,454) 27.
28. Total equity capital (sum of items 23 through 27).......................... 3210 5,214,250 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)...................................... 3300 68,940,410 29.
<FN>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of hte statement below that best ------------
describes the most comprehensive level of auditing work performed for the bank Number
by independent external auditors as of any date during 1996........................RCFD 6724..... N/A M.1.
------------
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accouting firm (may be required by
state chartering authority)
- ------------
(1) Includes total demand deposits and noninterest-bearing time and savings deposits.
</FN>
</TABLE>
EXHIBIT 25.7
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)___
------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
---------------
THE AES TRUST V
(Exact name of obligor as specified in its charter)
Delaware to be applied for
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
1001 North 19th Street
Arlington, Virginia 22209
(Address of principal executive offices) (Zip Code)
Preferred Securities
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part
of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of
the Act.
<PAGE>
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the
United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the City of Chicago and State of Illinois, on
the 29th day of June, 1999.
The First National Bank of Chicago,
Trustee
By /s/ Steven M. Wagner
--------------------------------
Steven M. Wagner
First Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U
S WEST Capital Funding, Inc., filed with the Securities and Exchange Commission
on May 6, 1998 (Registration No. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
June 29, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of The Amended and Restated Declaration of
Trust of AES Trust V, the undersigned, in accordance with Section 321(b) of
the Trust Indenture Act of 1939, as amended, hereby consents that the reports
of examinations of the undersigned, made by Federal or State authorities
authorized to make such examinations, may be furnished by such authorities to
the Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Steven M. Wagner
------------------------------
Steven M. Wagner
First Vice President
<PAGE>
EXHIBIT 7
<TABLE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for March 31, 1999
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
Dollar Amounts in thousands C400
-----
RCFD BIL MIL THOU
---- -------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RCFD
RC-A): ----
a. Noninterest-bearing balances and currency and coin(1)................... 0081 3,809,517 1.a
b. Interest-bearing balances(2)............................................ 0071 4,072,166 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)............... 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)............ 1773 12,885,728 2.b
3. Federal funds sold and securities purchased under agreements to
resell..................................................................... 1350 4,684,756 3.
4. Loans and lease financing receivables: RCFD
a. Loans and leases, net of unearned income (from Schedule ----
RC-C)................................................................... 2122 34,304,806 4.a
b. LESS: Allowance for loan and lease losses .............................. 3123 411,476 4.b
c. LESS: Allocated transfer risk reserve .................................. 3128 3,884 4.c
RCFD
d. Loans and leases, net of unearned income, allowance, and ----
reserve (item 4.a minus 4.b and 4.c) ................................... 2125 33,889,446 4.d
5. Trading assets (from Schedule RD-D)........................................ 3545 5,100,499 5.
6. Premises and fixed assets (including capitalized leases)................... 2145 754,052 6.
7. Other real estate owned (from Schedule RC-M)............................... 2150 5,244 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)............................................. 2130 201,068 8.
9. Customers' liability to this bank on acceptances outstanding............... 2155 265,041 9.
10. Intangible assets (from Schedule RC-M)..................................... 2143 285,709 10.
11. Other assets (from Schedule RC-F).......................................... 2160 2,987,184 11.
12. Total assets (sum of items 1 through 11)................................... 2170 68,940,410 12.
<FN>
- ---------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</FN>
</TABLE>
<PAGE>
<TABLE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
Dollar Amounts in
thousands
-----------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of columns A and C ----
from Schedule RC-E, part 1)............................................. 2200 22,163,664 13.a
(1) Noninterest-bearing(1).............................................. 6631 9,740,100 13.a1
(2) Interest-bearing.................................................... 6636 12,423,564 13.a2
RCFN
b. In foreign offices, Edge and Agreement subsidiaries, and ----
IBFs (from Schedule RC-E, part II)...................................... 2200 19,273,426 13.b
(1) Noninterest bearing................................................. 6631 334,741 13.b1
(2) Interest-bearing.................................................... 6636 18,938,685 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,405,792 14
15. a. Demand notes issued to the U.S. Treasury................................ RCON 2840 173,505 15.a
b. Trading Liabilities (from Schedule RC-D)................................ RCFD 3548 4,824,567 15.b
RCFD
16. Other borrowed money: ----
a. With original maturity of one year or less.............................. 2332 7,453,761 16.a
b. With original maturity of more than one year............................ A547 330,300 16.b
c. With original maturity of more than three years......................... A548 357,737 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding.................... 2920 265,041 18.
19. Subordinated notes and debentures.......................................... 3200 2,600,000 19.
20. Other liabilities (from Schedule RC-G)..................................... 2930 1,878,367 20.
21. Total liabilities (sum of items 13 through 20)............................. 2948 63,726,160 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.............................. 3838 0 23.
24. Common stock............................................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock)................... 3839 3,239,836 25.
26. a. Undivided profits and capital reserves.................................. 3632 1,813,367 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities.............................................................. 8434 (37,357) 26.b
c. Accumulated net gains (losses) on cash flow hedges...................... 4336 0 26.c
27. Cumulative foreign currency translation adjustments........................ 3284 (2,454) 27.
28. Total equity capital (sum of items 23 through 27).......................... 3210 5,214,250 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)...................................... 3300 68,940,410 29.
<FN>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of hte statement below that best ------------
describes the most comprehensive level of auditing work performed for the bank Number
by independent external auditors as of any date during 1996........................RCFD 6724..... N/A M.1.
------------
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accouting firm (may be required by
state chartering authority)
- ------------
(1) Includes total demand deposits and noninterest-bearing time and savings deposits.
</FN>
</TABLE>
