<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 9, 1996.
REGISTRATION STATEMENT NO. 333-5798
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
AMENDMENT No. 3
TO
PART II
OF
Form S-3
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
------------------------------------
AES CHINA GENERATING CO. LTD.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
BERMUDA 4911, 4961 98-0152612
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
</TABLE>
3/F(W), GOLDEN BRIDGE PLAZA
NO. 1(A) JIANGUOMENWAI AVENUE
BEIJING, 100020, PEOPLE'S REPUBLIC OF CHINA
(8610) 6508-9619
(Address and telephone number of registrant's principal executive offices)
------------------------------------
THE PRENTICE-HALL CORPORATION SYSTEM, INC.
375 HUDSON STREET
NEW YORK, NEW YORK 10014-3660
(212) 463-2700
(Name, address and telephone number of agent for service)
------------------------------------
COPIES TO:
<TABLE>
<S> <C>
MICHAEL V. GISSER DANFORTH TOWNLEY
SKADDEN, ARPS, SLATE, MEAGHER & FLOM DAVIS POLK & WARDWELL
(INTERNATIONAL) THE HONG KONG CLUB BUILDING
PEREGRINE TOWER 30/F 3A CHATER ROAD
LIPPO CENTRE, 89 QUEENSWAY CENTRAL, HONG KONG
CENTRAL, HONG KONG (852) 2533-3300
(852) 2820-0700
</TABLE>
------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As promptly
as practicable after this Registration Statement becomes effective.
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 offered only in connection with dividend or interest
reinvestment plans, please check the following box. [ ]
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. [ ]
------------------------------------
THIS REGISTRATION STATEMENT SHALL HEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 8(A) OF THE SECURITIES ACT OF 1933.
================================================================================
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
SEC Registration filing fee.............................. $ 54,546
NASD filing fee.......................................... 18,500
Printing and engraving expenses.......................... 200,000
Blue sky fees and expenses (including counsel)........... 15,000
Rating agencies' fees and expenses....................... 250,000
Accounting fees and expenses............................. 50,000
Legal fees and expenses.................................. 470,000
Trustee fees............................................. 5,000
Miscellaneous............................................ 52,954
---------
Total.................................................. $1,116,500
=========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 98 of the Companies Act 1981 of Bermuda (the "Act") provides
generally that a Bermuda company may indemnify its directors, officers and
auditors against any liability which by virtue of Bermuda law otherwise would be
imposed on them, except in cases where such liability arises from fraud or
dishonesty of which such officer, director, or auditor may be guilty in relation
to the Company. Section 98 further provides that a Bermuda company may indemnify
its directors, officers and auditors against any liability incurred by them in
defending any proceedings, whether civil or criminal, in which judgment is
awarded in their favor or in which they are acquitted or granted relief by the
Supreme Court of Bermuda in certain proceedings arising under Section 281 of the
Act. The Company has adopted provisions in its Bye-laws that provide that the
Company will indemnify its officers and directors against any liability which
they might incur or sustain in connection with their offices and trusts with
respect to the Company or any other entity for whom any of them acted at the
request of the Company, except in cases where such liability arises from willful
negligence, willful default, fraud or dishonesty of which such officer or
director may be guilty in relation to the Company.
II-1
<PAGE> 3
ITEM 16. EXHIBITS
(a) Exhibits.
The following is a list of exhibits to this Amendment No. 3 to the
Registration Statement:
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement.
4.1 Form of Indenture Between Bankers Trust, as Trustee and AES China Generating Co. Ltd.
4.2 Form of Note (included in 4.1).
4.3 Form of Security Agreement.
5.1 Opinion of Conyers, Dill & Pearman regarding the legality of securities being
registered.
5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom (International) regarding the legality
of securities being registered.
12.1 Statement re: Computation of Ratios.
23.1 Consent of Conyers, Dill & Pearman (set forth in their opinion filed as Exhibit 5.1 to
the Registration Statement).
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom (International) (included in their
opinion filed as Exhibit 5.2).
23.3 Consent of Deloitte Touche Tohmatsu.**
24.1 Power of Attorney (contained on the signature pages of this Registration Statement)**
25.1 Statement of Eligibility of Trustee.
</TABLE>
- ---------------
** Previously filed
(b) Financial Statement Schedules.
All supplemental schedules are omitted because of the absence of conditions
under which they are required or because the information is shown in the
financial statements or notes thereto.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) That for purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed
as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was declared
effective.
(2) That for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus 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 bonafide 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 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 Registrant 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 controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing of this Amendment No. 3 to the Registration Statement on
Form S-3 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Beijing,
Country of the People's Republic of China, on this 9th day of December, 1996.
AES CHINA GENERATING CO. LTD.
By: /s/ JEFFERY A. SAFFORD
Jeffery A. Safford
Vice President,
Chief Financial Officer and
Secretary
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------- ------------------------------------- -----------------
<C> <S> <C>
* President and Chief Executive Officer December 9, 1996
- ------------------------------------- (Principal Executive Officer)
Paul T. Hanrahan
/s/ JEFFERY A. SAFFORD Vice President, Chief Financial December 9, 1996
- ------------------------------------- Officer and Secretary (Principal
Jeffery A. Safford Financial and Accounting Officer)
* Chairman of the Board and Class B December 9, 1996
- ------------------------------------- Director
Roger W. Sant
* Vice Chairman and Class B Director December 9, 1996
- -------------------------------------
Dennis W. Bakke
* Vice Chairman and Class B Director December 9, 1996
- -------------------------------------
Robert F. Hemphill, Jr.
* Class B Director December 9, 1996
- -------------------------------------
Thomas Tribone
* Class B Director December 9, 1996
- -------------------------------------
Thomas I. Unterberg
* Class A Director December 9, 1996
- -------------------------------------
William Dykes
* Class A Director December 9, 1996
- -------------------------------------
Xiliang Feng
* Class A Director December 9, 1996
- -------------------------------------
Dr. Victor Hao Li
</TABLE>
II-3
<PAGE> 5
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------- ------------------------------------- -----------------
<C> <S> <C>
* Class A Director December 9, 1996
- -------------------------------------
William H. Taft, IV
</TABLE>
Pursuant to the requirements of Section 6(a) of the Securities Act of 1933,
the undersigned has signed this Amendment No. 3 to the Registration Statement
solely in the capacity of the duly authorized representative of AES China
Generating Co. Ltd. in the United States, in the City of Arlington, State of
Virginia, on this 9th day of December, 1996.
Authorized Representative in the
United States
*
--------------------------------------
Dennis W. Bakke
*By: /s/ JEFFERY A. SAFFORD
---------------------------------
Jeffery A. Safford
Attorney-in-Fact
II-4
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NUMBER DESCRIPTION OF EXHIBITS NUMBERED PAGE
- ------ ---------------------------------------------------------------------- -------------
<C> <C> <S> <C>
1.1 -- Form of Underwriting Agreement........................................
4.1 -- Form of Indenture Between Bankers Trust, as Trustee and AES China
Generating Co. Ltd....................................................
4.2 -- Form of Note (included in 4.1)........................................
4.3 -- Form of Security Agreement............................................
5.1 -- Opinion of Conyers, Dill & Pearman regarding the legality of
securities being registered...........................................
5.2 -- Opinion of Skadden, Arps, Slate, Meagher & Flom (International)
regarding the legality of securities being registered.................
12.1 -- Statement re: Computation of Ratios...................................
23.1 -- Consent of Conyers, Dill & Pearman (set forth in their opinion filed
as Exhibit 5.1 to the Registration Statement).........................
23.2 -- Consent of Skadden, Arps, Slate, Meagher & Flom (International)
(included in their opinion filed as Exhibit 5.2)......................
23.3 -- Consent of Deloitte Touche Tohmatsu.**................................
24.1 -- Power of Attorney (contained on the signature pages of this
Registration Statement)**
25.1 -- Statement of Eligibility of Trustee...................................
</TABLE>
- ---------------
** Previously filed
<PAGE> 1
EXHIBIT 1.1
AES CHINA GENERATING CO. LTD.
$180,000,000
_____% NOTES DUE 2006
UNDERWRITING AGREEMENT
December __, 1996
1
<PAGE> 2
December __, 1996
Morgan Stanley & Co.
Incorporated
Donaldson, Lufkin & Jenrette
Securities Corporation
c/o Morgan Stanley & Co.
Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
AES China Generating Co. Ltd., a corporation established under the laws of
Bermuda (the "Company"), proposes to issue and sell to the several Underwriters
named in Schedule I hereto (the "Underwriters") $180,000,000 principal amount
of its _____% Notes Due 2006 (the "Notes") to be issued pursuant to the
provisions of an Indenture (the "Indenture") to be dated as of the Closing Date
(as defined herein) between the Company and Bankers Trust Company, as trustee
(the "Trustee"). As security for the payment and performance by the Company of
all of its obligations under the Indenture and the Notes, the Company will
assign all amounts on deposit in the Collateral Accounts (as defined in the
Indenture) at any time as collateral to Bankers Trust Company, as collateral
agent (the "Collateral Agent"), for the benefit of the Trustee on behalf of the
Noteholders upon the terms and conditions set forth in a Security Agreement to
be dated as of the Closing Date (the "Security Agreement") among the Company,
the Trustee and the Collateral Agent.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (Commission File No. 333-5798) on Form
S-3, including a prospectus, relating to the Notes. The registration statement
on Form S-3 as amended at the time it becomes effective, including the
information (if any) deemed to be part of the registration statement at the
time of effectiveness pursuant to Rule 430A under the Securities Act of 1933,
as amended (the "Securities Act"), is hereinafter referred to as the
"Registration Statement"; the prospectus in the form first used to confirm
sales of Notes is hereinafter referred to as the "Prospectus." The "Bermuda
Prospectus" means the Registration Statement, or where applicable a copy
thereof, signed by each director of the Company or such director's duly
authorized attorney-in-fact, together with the required attachments thereto, or
any supplement or amendment thereto, filed with the
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<PAGE> 3
Registrar of Companies in Bermuda (the "Registrar of Companies") as required by
The Companies Act 1981, as amended, of Bermuda (the "Companies Act") and the
rules and regulations promulgated thereunder (the "Companies Act Rules").
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and incorporated by reference in the Prospectus complied or will comply
when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii) each
part of the Registration Statement, when such part became effective, did
not contain and each such part, as amended or supplemented, if applicable,
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder and (iv) the Prospectus
does not contain and, as amended or supplemented, if applicable, will not
contain, as of the date of any such amendment or supplement, any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties set forth in this Section do not apply (A) to statements or
omissions in the Registration Statement or the Prospectus based upon
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein or (B) to that
part of the Registration Statement that constitutes the Statement of
Eligibility (Form T-1) under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), of the Trustee.
(c) The Company has been duly incorporated and is validly
existing and in good standing (meaning that the Company has not failed to
make any filing with any Bermuda governmental authority or to pay any
Bermuda government fee or tax which might make the Company liable to be
struck off the Register of Companies of Bermuda and thereby cease to exist
under the laws of Bermuda) under the laws of Bermuda, has the corporate
power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and
is in good standing in each jurisdiction in which
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<PAGE> 4
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect
on the Company and the Project Companies (as defined below), taken as a
whole.
(d) Jiaozuo Power Partners, L.P. ("Jiaozuo L.P.") has been
duly organized and is validly existing as a limited partnership in good
standing under the laws of its organization and each of AES Yangchun Co.
Ltd., AES Chigen Co. (L) Ltd., AES Anhui Power Company Ltd., AES Tien Fu
Power Co. Ltd., AES Tien Fu Power Co (L) Ltd., Jiaozuo (G.P.) Corp., AES
China Power Holding Co. (L) Ltd. and AES China Holding Co. (L) Ltd.
(collectively, together with Jiaozuo L.P., the "AES Group Companies" and
each an "AES Group Company") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, and each of the AES Group Companies has
the corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the Company
and the Project Companies, taken as a whole.
(e) Each of Hunan Xiangci--AES Hydro Power Company Ltd.,
Yangchun Fuyang Diesel Engine Power Co. Ltd., Wuxi-AES-CAREC Gas Turbine
Power Company Ltd., Wuxi-AES-Zhonghang Power Co. Ltd., Sichuan Fuling Aixi
Power Company Ltd., Jiaozuo Wan Fang Power Company Ltd., Wuhu Shaoda
Electric Power Development Company Ltd., Chengdu-AES-Kaihua Gas Turbine
Power Co. Ltd., Anhui Liyuan AES Power Company Ltd. and Hefei Zhongli
Energy Company Ltd. (collectively the "Joint Venture Companies" and each a
"Joint Venture Company" and, together with the AES Group Companies, the
"Project Companies") has been duly organized under the laws of the People's
Republic of China (the "PRC") as a joint venture enterprise with the status
of a Chinese legal person, is validly existing under the laws of the PRC,
has the corporate power and authority to own its property (including land
use rights) and to conduct its business as described in the Prospectus, and
is in good standing and duly qualified to transact business in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except as otherwise
disclosed in the Prospectus.
(f) The Company has an authorized capitalization as set forth
in the Prospectus, and, except as set forth in the Prospectus, all of the
issued shares in the share capital of the Company have been duly and
validly authorized and issued and are fully paid. All of the issued shares
in the share capital (or partnership
3
<PAGE> 5
interests in the case of Jiaozuo L.P.) of each AES Group Company have been
duly and validly authorized and issued, and are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
restrictions on transfer, equities or claims.
(g) An AES Group Company or the Company is the owner of the
respective percentage of registered capital of each of the Joint Venture
Companies as set forth in the Prospectus, in each case free and clear of
all liens, encumbrances, equities, claims, restriction on transfer (other
than as required under PRC law or pursuant to the provisions of the Joint
Venture Documents (as defined below) of any such Joint Venture Company),
voting trust or other defect of title whatsoever; and the ownership of such
registered capital is valid and lawful under all applicable laws, rules,
regulations or guidelines of any local or other court or public,
governmental or regulatory agency or body in all material respects.
(h) The contracted registered capital of each of the Joint
Venture Companies has been subscribed in full by the respective joint
venture partners of each such Joint Venture Company and all government
approvals relating to the subscription thereof have been issued and are in
full force and effect (except any such delayed subscription permitted
pursuant to the applicable Joint Venture Documents) such that the ownership
of registered capital of each such Joint Venture Company is as described in
the Registration Statement in all material respects.
(i) This Agreement has been duly authorized, executed and
delivered by the Company.
(j) The Security Agreement has been duly authorized by the
Company and, when executed and delivered by the Company, will be a valid
and binding agreement of the Company, enforceable in accordance with its
terms except as the enforceability thereof may be limited (i) by
bankruptcy, insolvency, fraudulent transfer, fraudulent conveyance,
reorganization, moratorium or similar laws affecting creditors' rights
generally and (ii) by equitable principles of general applicability.
(k) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized and, when executed and delivered
by the Company, will be a valid and binding agreement of the Company,
enforceable in accordance with its terms except as the enforceability
thereof may be limited (i) by bankruptcy, insolvency, fraudulent transfer,
fraudulent conveyance, reorganization, moratorium or similar laws affecting
creditors' rights generally and (ii) by equitable principles of general
applicability.
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<PAGE> 6
(l) The Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance with the terms
of this Agreement, will be entitled to the benefits of the Indenture and
will be valid and binding obligations of the Company, enforceable in
accordance with their terms except as the enforceability thereof may be
limited (i) by bankruptcy, insolvency, fraudulent transfer, fraudulent
conveyance, reorganization, moratorium, or similar laws affecting
creditors' rights generally and (ii) by equitable principles of general
applicability.
(m) The execution and delivery by the Company, and the
performance by the Company of its obligations under, this Agreement, the
Indenture, the Security Agreement and the Notes (i) will not contravene any
provision of applicable law or the memorandum of association or bye-laws of
the Company or any agreement or other instrument binding upon the Company
or any of the Project Companies that is material to the Company and the
Project Companies, taken as a whole, or any regulation, judgment, order or
decree of any governmental body, agency or any court having jurisdiction
over the Company or any Project Company or, (ii) except as contemplated by
the Security Agreement, result in the creation or imposition of any claim,
lien, mortgage, security interest or other encumbrance on any property or
assets of the Company or any of the Prospect Companies. No consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company
of its obligations under this Agreement, the Indenture, the Security
Agreement or the Notes, except the following items: (i) such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Notes, (ii) such as have been
duly obtained in accordance with Bermuda law and are in full force and
effect and (iii) such consents, approvals, authorizations, orders or
qualifications, the absence of which would not, individually or in the
aggregate, have a material adverse effect on the ability of the Company to
consummate the transactions contemplated by this Underwriting Agreement.
(n) The execution and delivery of, and performance by each
Joint Venture Company and, to the best of the Company's knowledge, by each
of the other parties thereto of its obligations under the Project Documents
(as defined below) to which it is party do not contravene, in any material
respect, any provision of applicable law or any regulation or any
judgment, order or decree of any governmental body or agency or any court
having jurisdiction over any such party. Each of the Project Documents
constitutes a valid and binding agreement of the appropriate Joint Venture
Company and, to the best of the Company's knowledge, of each of the other
parties thereto, is in full force and effect, and is enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws affecting creditors'
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<PAGE> 7
rights generally and to general principles of equity. "Project Documents"
for each Joint Venture Company and the power generation facility under
construction or owned by such Joint Venture Company (each a "Project")
means all material documents relating to property ownership and operation
of such Joint Venture Company, including but not limited to, the
construction and equipment procurement contracts, the power purchase
agreement (together with the tariff calculation and adjustment method), the
dispatch and interconnection agreement, the fuel supply agreements (if
applicable), the operation and maintenance agreement (if applicable) and
the land use rights grant or lease agreement. Schedule II hereto contains
an accurate and complete list of all Project Documents relating to each of
the Joint Venture Companies.
(o) The execution and delivery of and performance by the
Company, each AES Group Company and, to the best of the Company's
knowledge, by each of the other parties thereto of its obligations under
the Joint Venture Documents (as defined below) to which it is a party do
not contravene, or in any material respect, any provision of applicable law
or any regulation any judgment, order or decree of any governmental body
or agency or any court having jurisdiction over any such party. Each of
the Joint Venture Documents to which it is a party constitutes a valid and
binding agreement of the Company and the appropriate AES Group Company and,
to the best of the Company's knowledge, of the other parties thereto, is in
full force and effect and is enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, fraudulent transfer,
fraudulent conveyance, moratorium or similar laws affecting creditors'
rights generally and to general principles of equity. "Joint Venture
Documents" in connection with each Joint Venture Company means all material
agreements relating to the establishment of the Joint Venture Company,
material agreements between such Joint Venture Company and the joint
venture partners thereof and material agreements among the joint venture
partners of such Joint Venture Company, including but not limited to the
joint venture contract, articles of association, any profit sharing
agreement not otherwise contained in the joint venture contract and any
financing agreements entered into by each such Joint Venture Company.
Schedule III hereto contains an accurate and complete list of all the Joint
Venture Documents relating to each of the Joint Venture Companies.
(p) No consent, approval, authorization, permit, certificate
or order of or from, or filing, declaration or qualification with or to,
any governmental body, self-regulatory organization, court, tribunal,
agency or official in or of the PRC was or is required for (i) the
establishment of each of the Joint Venture Companies (taking into account
the anticipated total investment in such Joint Venture Company), (ii) the
ownership by the Company or an AES Group Company, as the case may be, of
the respective percentage of registered capital of each of the Joint
Venture Companies as set forth in the Prospectus, (iii) the performance by
the Company,
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<PAGE> 8
the applicable AES Group Company and the applicable Joint Venture Company
and, to the best of the Company's knowledge, each other party thereto of
its obligations under the Joint Venture Documents to which it is a party,
(iv) the conduct by each of the Joint Venture Companies of its business and
ownership of its properties (including the establishment and ownership of
the relevant Project) as described in the Prospectus and as contemplated
under the Project Documents relating thereto, (v) the application of the
tariff calculation and adjustment method contained in the relevant power
purchase contract to the electricity tariff payable to the relevant Joint
Venture Company and (vi) the performance by each party of its obligations
under the Project Documents to which it is a party, including, but not
limited to, payment of, and adjustments to, the relevant tariff by the
relevant power purchaser of each Project as contemplated under the Project
Documents relating thereto (except, in the case of adjustments, any
approvals from the relevant pricing tariff bureau), except in each case (A)
such as have been obtained or made and are in full force and effect, and
have been listed in Schedule IV hereof, (B) those the absence of which,
individually or in the aggregate, would not have a material adverse effect
on the Company and the Project Companies, taken as a whole and (C) such
others, to the extent disclosed in the Prospectus. No such consent,
approval, authorization, permit, certificate or order, filing, declaration
or qualification that has been made or obtained contains any restriction on
the ability of any of the Joint Venture Companies to own, use or lease its
properties or to conduct its business or the Company's ability to satisfy
its payment obligations under the Notes, except such restrictions as are
disclosed in the Prospectus, and none of the Company or, to the knowledge
of the Company after due inquiry, any of the Project Companies has received
any notice of proceedings relating to the revocation or modification of any
such consent, approval, authorization, permit, certificate or order,
filing, declaration or qualification that has been made or obtained.
(q) Each Joint Venture Company has full power and authority to
effect dividend payments and remittances thereof and payments of interest
and principal on loans or advances by the Company or an AES Group Company
(collectively "Payments") outside the PRC in United States dollars. Each
Joint Venture Company has obtained all approvals currently required in the
PRC for it to be able to pay, and, subject to the acquisition of the
necessary foreign exchange, each such Joint Venture Company is currently
entitled to remit outside the PRC and pay, in United States Dollars, all
Payments payable to the Company or any of the AES Group Companies.
(r) All Payments by any Joint Venture Company to the Company
or any AES Group Company are currently free and clear of any PRC tax, duty,
withholding or deduction, except withholding tax payable on payments of
interest with respect to any loans to such Joint Venture Company.
7
<PAGE> 9
(s) All payments under the Notes, the Indenture and this
Agreement are free and clear of any tax, duty, withholding or deduction and
without necessity of obtaining any license, consent or approval,
governmental or otherwise, of any nature whatsoever.
(t) All dividend payments or other distributions by any AES
Group Company to the Company are free and clear of any tax, duty,
withholding or deduction and without necessity of obtaining any license,
consent or approval of such jurisdiction, governmental or otherwise, of any
nature whatsoever.
(u) No taxes, imposts or duties of any nature (including,
without limitation, stamp or other issuance or transfer taxes or duties and
capital gains, income, withholding or other taxes) are payable by or on
behalf of the Underwriters, the Company or any of the Project Companies to
Bermuda or the United States or any political subdivision or taxing
authority thereof or therein in connection with (i) the issuance of the
Notes in connection with the offering and sale of the Notes; (ii) the sale
of the Notes to the Underwriters in the manner contemplated herein; or
(iii) the resale and delivery of Notes by the Underwriters in the manner
contemplated in the Prospectus.
(v) None of the Joint Venture Companies is, or with the giving
of notice or lapse of time or both would be, in violation of or in default
under (i) any provision of PRC law or the Joint Venture Documents of such
Joint Venture Company, (ii) any other agreement or instrument by which such
Joint Venture Company is bound or to which any of the property or assets of
such Joint Venture Company is subject or (iii) any approval, judgment,
order, decree or regulation of any governmental body or agency or of any
court having jurisdiction over such Joint Venture Company, except for such
defaults that would not, individually or in the aggregate, have a material
adverse effect on the Company and the Project Companies, taken as a whole.
(w) Each of the Joint Venture Companies has paid all PRC taxes
which it is required to have paid, except (A) for taxes the payment of
which is being contested in good faith by appropriate proceedings and for
which adequate reserves have been set aside on its books and (B) where the
failure to pay any such taxes would not, individually or in the aggregate,
have a material adverse effect on the Company and its Project Companies,
taken as a whole.
(x) Each of the Joint Venture Companies owns, or has been
granted all necessary rights to use, for the approved duration of such
Joint Venture Company, all of the material properties and assets owned or
used by it or transferred, assigned or otherwise conveyed to it in
connection with its formation or thereafter.
8
<PAGE> 10
Such properties and assets are free and clear of all claims, liens,
security interests or other encumbrances, other than liens permitted under
the Indenture, which would materially affect its ability to perform under
the Project Documents to which it is a party or which would materially
affect the Company's ability to satisfy its payment obligations under the
Notes. Each of the Joint Venture Companies has obtained all land-use
rights which are necessary in connection with the construction, ownership
and operation of the respective Project, for the approved duration of such
Joint Venture Company, and the conduct of their respective businesses as
described in the Registration Statement, free and clear of all encumbrances
and defects (other than such encumbrances or defects which do not interfere
with the use made and proposed to be made of such land-use rights), and all
such land-use rights are valid, binding and enforceable in accordance with
their respective terms, in all material respects. All real property,
buildings and equipment held under lease, if any, by each of the Joint
Venture Companies are held by each of them under leases that are valid,
binding and enforceable, in all material respects.
(y) No proceeding or other action for the winding up or
dissolution or for the withdrawal, revocation or cancellation of the
business license of any of the Joint Venture Companies has been commenced
or threatened. No notice of appointment of a receiver of any of the Joint
Venture Companies or any of its assets has been issued and no declaration
or order of insolvency has been or is threatened to be made.
(z) No material labor dispute with the employees of the
Company or any of the Joint Venture Companies exists or, to the knowledge
of the Company, is imminent.
(aa) The Company has disclosed to the Underwriters copies of
(x) all minutes and agenda of the board of directors, board of
commissioners or similar bodies of the Company and the Project Companies
and (y) all existing minutes and agenda of the management meetings of the
Company and the Project Companies.
(bb) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and the Project Companies, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(cc) There are no legal or governmental proceedings pending or
threatened to which the Company or any of the Project Companies is a party
or to which any of the properties of the Company or any of the Project
Companies is
9
<PAGE> 11
subject that are required to be described in the Registration Statement or
the Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(dd) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act, complied
when so filed in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder.
(ee) The Bermuda Prospectus will comply at the time of filing
with the Registrar of Companies in all material respects with the
applicable provisions of the Companies Act, the Companies Act Rules and any
other applicable statutes, rules and regulations of Bermuda or any
governmental authority therein.
(ff) The Company is not and, after giving effect to the
Offering and the application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended (the "Investment Company
Act").
(gg) The financial statements, including the notes thereto, and
supporting schedules included in the Registration Statement and the
Prospectus present fairly the consolidated financial position of the
Company and its subsidiaries as of the dates indicated and the consolidated
results of operations of the Company and its subsidiaries for the periods
specified. Said financial statements have been prepared in conformity with
United States generally accepted accounting principles applied on a
consistent basis. The supporting schedules included in the Registration
Statement and the Prospectus present fairly the information required to be
stated therein.
(hh) Each of the Joint Ventures has devised and maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (1) transactions are executed in accordance with
management's general or specific authorizations, (2) transactions are
recorded as necessary to permit preparation by the Company of financial
statements in conformity with United States generally accepted accounting
principles and to maintain accountability for assets, (3) access to assets
is permitted only in accordance with management's general or specific
authorization and (4) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
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<PAGE> 12
(ii) The Company is not (i) subject to regulation as a "holding
company" or a "subsidiary company" of a holding company or a "public
utility company" under Section 2(a) of the Public Utility Holding Company
Act of 1935 ("PUHCA"), (ii) subject to regulation under the Federal Power
Act or (iii) subject to regulation by any law of any state of the United
States with respect to rates or the financial or organizational regulation
of electric utilities.
(jj) The Company and the Project Companies (i) are in
compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable Environmental
Laws to conduct their respective businesses and (iii) are in compliance
with all terms and conditions of any such permit, license or approval,
except where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the Company
and the Project Companies, taken as a whole.
(kk) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company and the Joint Venture
Companies, in the course of which it identifies and evaluates associated
costs and liabilities (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities
to third parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or
in the aggregate, have a material adverse effect on the Company and the
Project Companies, taken as a whole.
(ll) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the Government of
Cuba or with any person or affiliate located in Cuba.
(mm) The Company has been designated as a non-resident of
Bermuda for exchange control purposes by the Bermuda Monetary Authority,
whose permission for issue and sale of the Notes as contemplated by this
Agreement has been obtained and is in full force and effect.
2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees to
sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and
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<PAGE> 13
warranties herein contained, but subject to the conditions hereinafter stated,
agrees, severally and not jointly, to purchase from the Company the respective
principal amounts of Notes set forth in Schedule I hereto opposite its name at
_____% of their principal amount (the "Purchase Price") plus accrued interest,
if any, from ___________, 1996 to the date of payment and delivery
3. TERMS OF PUBLIC OFFERING. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Notes as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Company is further
advised by you that the Notes are to be offered to the public initially at
____% of their principal amount (the "Public Offering Price") plus accrued
interest, if any, from __________________, 1996 to the date of payment and
delivery and to certain dealers selected by you at a price that represents a
concession not in excess of ____% of their principal amount under the Public
Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of ____% of their principal amount, to any
Underwriter or to certain other dealers.
4. PAYMENT AND DELIVERY. Payment for the Notes shall be made by
certified or official bank check or checks payable to the order of the Company
in New York in immediately available funds (or, if agreed between the Company
and the Underwriters, by wire transfer in immediately available funds to an
account designated by the Company) in the amount of the Purchase Price less
US$_____ reimbursement of certain of the Underwriters' expenses reimbursable
pursuant to Section hereof at the office of Davis Polk & Wardwell at 10:00
A.M., New York time, on ____________, 1996, or at such other time on the same
or such other date, not later than _________, 1996, as shall be designated in
writing by you. The time and date of such payment are hereinafter referred to
as the "Closing Date."
Payment for the Notes shall be made against delivery to Trustee, as
custodian for the Depositary Trust Company for the respective accounts of the
several Underwriters of the one or more Global Notes (as defined in the
Indenture) registered in the name of Cede & Co. with any transfer taxes payable
in connection with the transfer of the Notes to the Underwriters duly paid
5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations of
the Company and the several obligations of the Underwriters hereunder are
subject to the condition that the Registration Statement shall have become
effective not later than 5:00 p.m. (New York time) on the date hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
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<PAGE> 14
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating
accorded the Notes by any "nationally recognized statistical
rating organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations
of the Company and the Project Companies, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement)
that, in your judgment, is material and adverse and that makes it,
in your judgment, impracticable to market the Notes on the terms
and in the manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an authorized officer of
the Company, to the effect set forth in clause (a)(i) above and to the
effect that the representations and warranties of the Company contained in
this Agreement are true and correct as of the Closing Date and that the
Company has complied with all of its agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before
the Closing Date. The officers signing and delivering such certificate may
rely upon the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date
an opinion of Skadden, Arps, Slate, Meagher & Flom (International), United
States counsel for the Company, dated the Closing Date, in form and
substance satisfactory to the Underwriters, to the effect set forth in
Exhibit A hereto. With respect to paragraph (13) of Exhibit A, Skadden,
Arps, Slate, Meagher & Flom (International) may state that their opinion
and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements
thereto and review and discussion of the contents thereof, but are without
independent check or verification, except as specified.
(d) The Underwriters shall have received on the Closing Date
an opinion of Commerce & Finance Law Office, special PRC counsel for the
Company, dated the Closing Date, in form and substance satisfactory to the
Underwriters, to the effect set forth in Exhibit B hereto.
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<PAGE> 15
(e) The Underwriters shall have received on the Closing Date
an opinion of Conyers, Dill & Pearman, Bermuda counsel for the Company,
dated the Closing Date, in form and substance satisfactory to the
Underwriters, to the effect set forth in Exhibit C hereto.
(f) The Underwriters shall have received on the Closing Date
an opinion of [NAME OF BVI COUNSEL], British Virgin Islands counsel for the
Company, dated the Closing Date, in form and substance satisfactory to the
Underwriters, to the effect set forth in Exhibit D hereto.
(g) The Underwriters shall have received on the Closing Date
an opinion of [NAME OF CAYMAN ISLANDS COUNSEL], Cayman Islands counsel for
the Company, dated the Closing Date, in form and substance satisfactory to
the Underwriters, to the effect set forth in Exhibit E hereto.
(h) The Underwriters shall have received on the Closing Date
an opinion of [NAME OF LABUAN COUNSEL], Labuan counsel for the Company,
dated the Closing Date, in form and substance satisfactory to the
Underwriters, to the effect set forth in Exhibit F hereto.
(i) The Underwriters shall have received on the Closing Date
an opinion of Haiwen & Partners, PRC counsel for the Underwriters, dated
the Closing Date, covering the matters referred to in Exhibit B.
(j) The Underwriters shall have received on the Closing Date
an opinion of Davis Polk & Wardwell, counsel for the Underwriters, dated
the Closing Date, covering the matters referred to in paragraphs (2), (3),
(4), (10) (but only as to the statements in the Prospectus under
"Prospectus Summary - The Offering," "Description of the Notes" and
"Underwriters"), (12) and (13) of Exhibit A. With respect to paragraph 13
of Exhibit A, Davis Polk & Wardwell may state that their opinion and belief
are based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto and
review and discussion of the contents thereof, but are without independent
check or verification, except as specified.
(k) The Underwriters shall have received on the Closing Date
an officer's certificate of the Trustee, dated the Closing Date, in form
and substance satisfactory to the Underwriters.
(l) The Underwriters shall have received on the Closing Date
an officer's certificate of the Collateral Agent, dated the Closing Date,
in form and substance satisfactory to the Underwriters.
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<PAGE> 16
(m) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to the
Underwriters, from Deloitte Touche Tohmatsu, independent public
accountants, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(n) On or prior to the Closing Date, the Authorized Agent
referred to in Section shall have accepted its appointment by the Company
as authorized agent pursuant to Section , and the Representatives shall
have received an executed copy of each such acceptance in form and
substance satisfactory to them.
(o) The Depository Trust Company shall have approved the forms
of the Global Notes.
(p) The Company shall have paid all fees and expenses payable
pursuant to Section 6(g) hereof.
(q) The Underwriters shall have received on the Closing Date a
secretary's certificate of the Company in form and substance satisfactory
to the Underwriters.
(r) The opinions of Skadden, Arps, Slate, Meagher & Flom
(International); Conyers, Dill & Pearman; Commerce & Finance Law Office;
[NAME OF BVI COUNSEL]; [NAME OF CAYMAN ISLANDS COUNSEL] AND [NAME OF LABUAN
COUNSEL] referred to in paragraphs (c), (d), (e), (f), (g) and (h) above,
respectively, shall be rendered to the Underwriters at the request of the
Company and shall so state therein.
6. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with
each Underwriter as follows:
(a) To furnish to you, without charge, three signed copies of
the Registration Statement (including exhibits thereto) and three signed
copies of the Bermuda Prospectus (including the required attachments
thereto and all amendments thereof) and for delivery to each other
Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and, during the period mentioned in paragraph (c) below,
as many copies of the Prospectus and any supplements and amendments thereto
or to the Registration Statement as you may reasonably request.
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<PAGE> 17
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which you reasonably object, unless counsel advises the
Company in writing, with a copy thereof being furnished to you no less than
24 hours in advance of such proposed filing or use, that such amendment or
supplement is required as a matter of law or pursuant to an order of a
regulatory authority or the requirement of a stock exchange.
(c) If, during such period after the first date of the public
offering of the Notes as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by
an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its expense, to the
Underwriters and to the dealers (whose names and addresses you will furnish
to the Company) to which Notes may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Notes for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) To make generally available to the holders of the Notes
and to you as soon as practicable an earning statement of the Company
covering the twelve-month period ending February 28, 1998 that satisfies
the provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(f) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell, contract
to sell or otherwise dispose of any debt securities of the Company or
warrants to purchase debt securities of the Company substantially similar
to the Notes (other than (i) the Notes and (ii) commercial paper issued in
the ordinary course of business), without the prior written consent of
Morgan Stanley & Co. Incorporated.
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<PAGE> 18
(g) To pay all expenses incident to the performance of its
obligations under this Agreement, including but not limited to: (i) the
preparation and filing of the Registration Statement and the Prospectus and
all amendments and supplements thereto; (ii) the preparation, issuance and
delivery of the Notes; (iii) the fees and disbursements of counsel to the
Company; (iv) all fees and expenses of the Trustee and its counsel and of
the Collateral Agent and its counsel; (v) the qualification of the Notes
under state securities or Blue Sky laws in accordance with the provisions
of Section , including filing fees and the fees and disbursements of
counsel for the Underwriters in connection therewith and in connection with
the preparation of any Blue Sky or Legal Investment Memoranda; (vi) the
printing and delivery to the Underwriters in quantities as hereinabove
stated of copies of the Registration Statement and all amendments thereto
and of each preliminary prospectus and the Prospectus and any amendments or
supplements thereto; (vii) the printing and delivery to the Underwriters of
copies of any Blue Sky or Legal Investment Memoranda; (viii) any fees
charged by rating agencies for the rating of the Notes; (ix) the filing
fees and expenses, if any, incurred with respect to any filing with the
National Association of Securities Dealers, Inc. made in connection with
the offering of the Notes; (x) any expenses incurred by the Company in
connection with a "road show" presentation to potential investors; and (xi)
any tax, imposts or duties described in paragraph (u) of Section hereof.
(h) For so long as the Company remains a Bermuda corporation,
it will use its best efforts to ensure that the Company is, and remains, an
"exempted company" pursuant to the Companies Act.
7. INDEMNITY AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by any Underwriter or any such
controlling person in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
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<PAGE> 19
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to such Underwriter, but only with reference to
information relating to such Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) of this
Section , such person (the "indemnified party") shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying party")
in writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others the indemnifying
party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them.
It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any proceeding
or related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel)
for all such indemnified parties and that all such fees and expenses shall
be reimbursed as they are incurred. Such firm shall be designated in
writing by Morgan Stanley & Co. Incorporated, in the case of parties
indemnified pursuant to paragraph (a) above and by the Company, in the case
of parties indemnified pursuant to paragraph (b) above. The indemnifying
party shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there
be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this
paragraph, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if
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<PAGE> 20
(i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with
such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which
any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section is unavailable to an indemnified
party or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other hand from the
offering of the Notes or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and of
the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other
hand in connection with the offering of the Notes shall be deemed to be in
the same respective proportions as the net proceeds from the offering of
the Notes (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover of the Prospectus, bear to
the aggregate Public Offering Price of the Notes. The relative fault of
the Company on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The Underwriters' respective obligations to contribute
pursuant to this Section are several in proportion to the respective
principal amounts of Notes they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or
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<PAGE> 21
by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) of this Section .
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section , no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Notes underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in
this Section and the representations, warranties and other statements of
the Company contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter or by or on behalf of the Company and of its
officers or directors or any person controlling the Company and (iii)
acceptance of and payment for any of the Notes.
8. TERMINATION. This Agreement shall be subject to termination by
notice given by Morgan Stanley & Co. Incorporated on behalf of the
Underwriters to the Company, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc. or The Stock Exchange of Hong Kong Limited, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York, Hong Kong or Shanghai shall have
been declared by the relevant banking authorities, (iv) there shall have
occurred a change or development involving a prospective change in the existing
financial, political, economic or regulatory conditions in Bermuda, the PRC or
Hong Kong, (including, without limitation, a change in exchange controls,
currency exchange rates or taxation) which change or development makes it, in
the sole judgment of Morgan Stanley & Co. Incorporated on behalf of the
Underwriters, impractical or inadvisable to market the Notes, or the United
States, Bermuda, or the PRC imposes new exchange controls, or (v) there shall
have occurred any outbreak or escalation of hostilities or any change in
20
<PAGE> 22
financial markets or any major calamity or crisis that, in the judgment of
Morgan Stanley & Co., Incorporated on behalf of the Underwriters, is material
and adverse and (b) in the case of any of the events specified in clauses
(a)(i) through (v), such event, singly or together with any other such event,
makes it, in the judgment of Morgan Stanley & Co., Incorporated, impracticable
to market the Notes on the terms and in the manner contemplated in the
Prospectus.
9. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date, any one or more of the Underwriters shall fail or
refuse to purchase Notes that it has or they have agreed to purchase hereunder
on such date, and the aggregate principal amount of Notes which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not
more than one-tenth of the aggregate principal amount of the Notes to be
purchased on such date, the other Underwriters shall be obligated severally in
the proportions that the principal amount of Notes set forth opposite their
respective names in Schedule I bears to the principal amount of Notes set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as you may specify, to purchase the Notes which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the principal amount of Notes that any
Underwriter has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section by an amount in excess of one-ninth of such principal
amount of Notes without the written consent of such Underwriter. If, on the
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Notes and the aggregate principal amount of Notes with respect to which such
default occurs is more than one-tenth of the aggregate principal amount of
Notes to be purchased on such date, and arrangements satisfactory to you and
the Company for the purchase of such Notes are not made within 36 hours after
such default, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or the Company. In any such case either you or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company agrees to reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
21
<PAGE> 23
of their counsel) reasonably incurred by such Underwriters in connection with
this Agreement or the offering contemplated hereunder.
10. SUBMISSION TO JURISDICTION; AUTHORIZED AGENT. The Company (a)
agrees that any legal suit, action or proceeding brought by any Underwriter
arising out of or relating to this Agreement, the Indenture, the Notes or the
transactions contemplated hereby or thereby may be instituted in any federal or
state court in the Borough of Manhattan, the City of New York, (b) irrevocably
waives, to the fullest extent it may effectively do so, any objection (x) which
it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any federal or state court in the Borough of Manhattan,
the City of New York or (y) that any such suit, action or proceeding has been
brought in an inconvenient forum, and (c) irrevocably submits to the
non-exclusive jurisdiction of any such court in any such suit, action or
proceeding.
The Company irrevocably designates and appoints The Prentice-Hall
Corporation System, Inc. as its authorized agent upon which process may be
served in any legal suit, action or proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby which may be instituted
in any federal or state court in the Borough of Manhattan, the City of New
York, and agrees that service of process upon such agent, and written notice of
said service to the Company by the person serving the same, shall be deemed in
every respect effective service of process upon the Company in any such suit or
proceeding. The Company further agrees to take any and all actions as may be
necessary to maintain such designation and appointment of such agent in full
force and effect.
11. JUDGMENT CURRENCY. If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due hereunder into any currency
other than United States dollars, the parties hereto agree, to the fullest
extent that they may effectively do so, that the rate of exchange used shall be
the rate at which in accordance with normal banking procedures an Underwriter
could purchase United States dollars with such other currency in New York City
on the business day preceding that on which final judgment is given. The
obligation of the Company in respect of any sum due from the Company to any
Underwriter, or of any Underwriter in respect of any sum due from such
Underwriter to the Company shall, notwithstanding any judgment in a currency
other than United States dollars, not be discharged until the first business
day following receipt by such Underwriter, or the Company, as the case may be,
of any sum adjudged to be so due in such other currency, on which (and only to
the extent that) such Underwriter, or the Company, as the case may be, may in
accordance with normal banking procedures purchase United States dollars with
such other currency; if the United States dollars so purchased are less than
the sum originally due to the Underwriter, or the Company, as the case may be,
hereunder, the Company and such Underwriter agrees, as a separate obligation
and notwithstanding any such judgment, to indemnify such Underwriter, or the
Company, as the case may be, against such loss. If the United States dollars
so purchased are greater than the sum originally due to such Underwriter, or
the Company, as the case
22
<PAGE> 24
may be, hereunder, such Underwriter, or the Company, as the case may be, agrees
to pay to the Company or such Underwriter, as the case may be, an amount equal
to the excess of the dollars so purchased over the sum originally due to such
Underwriter, or the Company, as the case may be, hereunder.
12. WAIVER OF IMMUNITY. To the extent that the Company has or
hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether through service or notice, attachment prior to judgment,
attachment in aid or execution, or otherwise) with respect to itself or its
property, such party hereby irrevocably waives such immunity in respect of its
obligations hereunder to the extent permitted by applicable law and, without
limiting the generality of the foregoing, agrees that the waivers set forth in
this paragraph shall have effect to the fullest extent permitted under the
Foreign Sovereign Immunities Act of 1976 of the United States and are intended
to be irrevocable for purposes of such Act.
13. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
14. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
15. HEADINGS. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
23
<PAGE> 25
Very truly yours,
AES CHINA GENERATING CO. LTD.
By
------------------------------
Name:
Title:
Accepted as of the date hereof
Morgan Stanley & Co. Incorporated
Donaldson, Lufkin & Jenrette
Securities Corporation
Acting severally on behalf
of themselves and the
several Underwriters named
herein.
By Morgan Stanley & Co.
Incorporated
By
-------------------------
Name:
Title:
24
<PAGE> 26
SCHEDULE I
<TABLE>
<CAPTION>
Principal Amount
of Notes
Underwriter To Be Purchased
- ----------- ---------------
<S> <C>
Morgan Stanley & Co. Incorporated
Donaldson, Lufkin & Jenrette
Securities Corporation
-----------
Total ........ 180,000,000
===========
</TABLE>
<PAGE> 27
Schedule II
[Project Documents (By Joint Venture Company)]
[to be provided by the Company and Commerce & Finance]
<PAGE> 28
Schedule III
[Joint Venture Documents (By Joint Venture Company)]
[to be provided by the Company and Commerce & Finance]
<PAGE> 29
Schedule IV
[Consents, Approvals etc. (By Joint Venture Company)]
[to be provided by the Company and Commerce & Finance]
<PAGE> 30
Exhibit A
[Opinion of Skadden, Arps, Slate, Meagher & Flom]
(1) The Registration Statement has become effective; no stop order suspending
the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the
Commission.
(2) The Indenture [has been duly qualified under the Trust Indenture Act and]
constitutes a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms.
(3) When duly executed and authenticated in accordance with the terms of the
Indenture and delivered against payment therefor in accordance with the
terms of the Underwriting agreement, the Notes will be entitled to the
benefits of the Indenture and will be valid and binding obligations of
the Company, enforceable against the Company in accordance with their
terms.
(4) The Security Agreement constitutes a valid and legally binding agreement
of the Company, enforceable against the Company in accordance with its
terms.
(5) The execution and delivery by the Company of, and the performance by the
Company of its obligations under, the Indenture, the Notes, the Security
Agreement and the Underwriting Agreement, each in accordance with its
terms do not (i) constitute a breach or violation of a default under any
of the agreements and instruments set forth on Exhibit A hereto
("Applicable Contracts"), (ii) contravene any of the applicable laws set
forth on Exhibit B hereto ("Applicable Laws") or (iii) contravene any
applicable judgment, order or decree set forth on Exhibit C hereto
("Applicable Orders").
(6) No consent, approval, authorization or order of, or qualification with,
any United States Federal or New York State governmental agency or body
is required to be obtained or made by the Company for the performance by
the Company of the transactions contemplated by the Indenture, the Notes,
the Security Agreement or the Underwriting Agreement, except for (i) such
consents, approval, authorizations or qualifications as may be required
under state securities or Blue Sky laws in connection with the offer and
sale of the Notes or (ii) the registration of the Notes under the
Securities Act
A-1
<PAGE> 31
(7) The Company is not and, immediately after giving effect to the offering
of the Notes and assuming the proceeds thereof have been applied as
described in the Prospectus, will not be, subject to registration as an
"investment company" under the Investment Company Act of 1940, as
amended.
(8) The Company is not (i) subject to regulation as a "holding company" [or a
"subsidiary company of a holding company or a "public utility company"]
under Section 2(a) of the Public Utility Holding Company Act of 1935,
(ii) subject to regulation under the Federal power Act or (iii) subject
to regulation under the laws of the State of New York with respect to
rates or the financial or organizational regulation of electric
utilities.
(9) Under the laws of the State of New York relating to submission to
jurisdiction, the Company has, pursuant to the Indenture, the Notes, the
Security Agreement and the Underwriting Agreement (i) validly and
irrevocably submitted to the personal jurisdiction of any New York State
or United States Federal court located in Borough of Manhattan in The
City of New York, in any action, suit or proceeding brought by any
Underwriter arising out of our relating to the Indenture, the Notes, the
Security Agreement, the Underwriting Agreement or the transactions
contemplated thereby, (ii) validly waived any objection to the laying of
venue of a proceeding in any such court and (iii) validly appointed The
Prentice-Hall Corporation System, Inc. as its authorized agent for
service of process; service of process effected on such agent in the
manner set forth in Section 11.11 of the Indenture, Section 8.11 of the
Security Agreement and Section 10 of the Underwriting Agreement will be
effective to confer valid personal jurisdiction over the Company.
(10) The statements set forth in the Prospectus under the captions
"Description of the Notes," insofar as they purport to constitute a
summary of the terms of the Notes, and {certain captions} have been
reviewed by such counsel and fairly summarize the matters purported to the
described therein in all material respects. Although the summary set
forth in the section of the Prospectus entitled "Taxation - United States
Taxation" does not purport to discuss all possible United States Federal
income tax considerations related to the acquisition, holding, or
disposition of the Notes by a "United States holder" (as defined
therein), such discussion constitutes, in all material respects, a fair
and accurate summary of
A-2
<PAGE> 32
the United States Federal income tax considerations that are likely to be
material to an original purchaser of the Notes who is a United States
holder.
(11) Each document heretofore filed pursuant to the Exchange Act of 1934, as
amended (the "Exchange Act"), and incorporated by reference in the
Prospectus complied as to form when so filed in all material respects
with the Exchange Act and the applicable rules and regulations of the
Commission thereunder.
(12) The Registration Statement and Prospectus (except for financial
statements and schedules included therein, as to which such counsel need
not express any opinion) comply as to form in all material respects with
the Securities Act and the applicable rules and regulations of the
Commission thereunder.
(13) Such counsel (i) has no reason to believe that (except for financial
statements and schedules as to which such counsel need not express any
belief and except for that part of the Registration Statement that
constitutes the Form T-1 heretofore referred to) the Registration
Statement and the prospectus included therein at the time the
Registration Statement became effective contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and
(ii) has no reason to believe that (except for financial statements and
schedules as to which such counsel need not express any belief) the
Prospectus contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(14) [Opinion with respect to perfection of security interests in Collateral.]
A-3
<PAGE> 33
Exhibit B
[Opinion of Commerce & Finance Law Office]
(1) Each of the Joint Venture Companies has been duly organized under the
laws of the PRC as a joint venture enterprise with the status of a
Chinese legal person, is validly existing under the laws of the PRC, has
the power and authority (corporate and other) to own its property
(including land use rights) and to conduct its business as described in
the Prospectus and its Joint Venture Documents and business license, and
is in good standing and duly qualified to transact business in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification.
(2) None of the Joint Venture Companies is in violation of its business
license, Joint Venture Documents or other constituent documents.
(3) An AES Group Company or the Company is the owner of the respective
percentage of registered capital of each of the Joint Venture Companies
as set forth in the Prospectus, in each case free and clear of all liens,
encumbrances, equities, claims, restriction on transfer (other than as
required under [describe any relevant PRC law] or pursuant to the
provisions of the Joint Venture Documents of any such Joint Venture
Company), voting trust or other defect of title whatsoever; the ownership
of such registered capital is valid and lawful under all applicable laws,
rules, regulations or guidelines or any local or other court or public,
governmental or regulatory agency or body.
(4) The contracted registered capital of each of the Joint Venture Companies
has been subscribed in full by the respective joint venture partners of
each such Joint Venture Company and all government approvals relating to
the subscription thereof have been issued and are in full force and
effect [except any such delayed subscription permitted pursuant to the
applicable Joint Venture Documents] such that the ownership of registered
capital of each Joint Venture Company is as described in the Registration
Statement.
(5) The execution and delivery by the Company of, and the performance by the
Company of its obligations under, the Underwriting Agreement, the
Indenture, the Security Agreement and the Notes will not contravene any
provision of law or any agreement or other instrument binding upon any of
the Joint Venture Companies that is material to the Company and the
Project Companies, taken as a whole, or any regulation, judgment, order
or decree of any governmental body, agency or any court having
jurisdiction over any Joint Venture Company, and no consent, approval,
authorization or order of, or qualification with, any
B-1
<PAGE> 34
governmental body or agency is required for the performance by the
Company of its obligations under the Underwriting Agreement, the
Indenture, the Security Agreement or the Notes.
(6) Each of the Project Documents constitutes a valid and binding agreement
of the appropriate Joint Venture Company, is in full force and effect,
and is enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws affecting creditors' rights generally and to general principles of
equity.
(7) To the best of such counsel's knowledge after due inquiry, each of the
Project Documents constitutes a valid and binding agreement of each of
the parties thereto other than the Joint Venture Companies, is in full
force and effect and is enforceable in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws affecting creditors' rights generally and to
general principles of equity.
(8) The performance of each AES Group Company or the Company, as the case may
be, of its obligations under the applicable Joint Venture Documents does
not and will not contravene (i) any provision of law or (ii) any
approval, judgment, order, decree or regulation of any governmental body
or agency or any court having jurisdiction over such AES Group Company or
any of the properties or assets of such AES Group Company.
(9) The performance of each Joint Venture Company of its obligations under
the applicable Project Documents does not and will not contravene (i) any
provision of PRC law or (ii) any approval, judgment, order, decree or
regulation of any governmental body or agency or any court having
jurisdiction over such Joint Venture Company or any of the properties or
assets of such Joint Venture Company.
(10) To the best of such counsel's knowledge and belief after due inquiry,
each of the Joint Venture Documents constitutes a valid and binding
agreement of each of the parties thereto other than the AES Group
Companies, is in full force and effect and is enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws affecting creditors' rights
generally and to general principles of equity.
(11) No consent, approval, authorization, permit, certificate or order of or
from, or filing, declaration or qualification with or to, any
governmental body, self-regulatory organization, court, tribunal, agency
or official was or is required for (i) the establishment of each Joint
Venture Company (taking into account the anticipated total investment in
such Joint Venture Company, (ii) the ownership
B-2
<PAGE> 35
by the Company or an AES Group Company, as the case may be, of the
respective percentage of registered capital of each of the Joint Venture
Companies as set forth in the Prospectus, (iii) the performance by each
party of its obligations under the Joint Venture Documents to which it is
a party, (iv) the conduct by each Joint Venture Company of its business
and ownership of its properties (including the establishment and
ownership of the relevant Project) as described in the Prospectus and as
contemplated under the Project Documents, (v) the application of the
tariff calculation and adjustment method contained in the relevant power
purchase contract to the electricity tariff payable to the relevant Joint
Venture Company, (vi) the performance by each party of its obligations
under the Project Documents to which it is a party, including, but not
limited to, payment of, and adjustments to, the relevant tariff by the
relevant power purchaser of each Project as contemplated under the
Project Documents, (vii) the consummation of the transactions
contemplated, and the performance by the Company of its obligations,
under the Indenture, the Security Agreement, and the Underwriting
Agreement and (viii) the exercise by the Trustee of its remedies under
the Indenture, except such as have been obtained or made and are in full
force and effect, and have been listed in Schedule III hereof; no such
consent, approval, authorization, permit, certificate or order, filing,
declaration or qualification that has been made or obtained contains any
restriction on the ability of the Joint Venture Companies to own, use or
lease its properties, to conduct its business or to satisfy its
obligations and enjoy rights and benefits contemplated under the Joint
Venture Documents and Project Documents or the Company's ability to
satisfy its payment obligations under the Notes, except such restrictions
as are disclosed in the Prospectus.
(12) The execution and delivery by the Company of, and the performance by the
Company of its obligations under, the Underwriting Agreement, the
Indenture, the Security Agreement and the Notes do not and will not
contravene any provision of law or, to the best of such counsel's
knowledge after reasonable inquiry, any agreement or other instrument
binding upon the Company or any of the Project Companies that is material
to the Company and the Project Companies, taken as a whole, or any
regulation, judgment, order or decree of any governmental body, agency or
any court having jurisdiction over the Company or any Project Company,
and no consent, approval, authorization or order of, or qualification
with, any governmental body or agency in or of the PRC is required for
the performance by the Company of its obligations under the Underwriting
Agreement, the Indenture, the Security Agreement or the Notes.
(13) Each Joint Venture Company has full power and authority to effect
dividend payments and remittances thereof and payments of interest and
principal on loans or advances by the Company or on AES Group Company
(collectively, "Payments") outside the PRC in Unites States dollars.
Each Joint Venture
B-3
<PAGE> 36
Company has obtained all approvals required for it to be able to pay,
and, subject to the acquisition of the necessary foreign exchange, each
such Joint Venture Company is entitled to remit outside the PRC and pay,
in United States Dollars, all Payments to the Company or any AES Group
Company.
(14) All Payments by any Joint Venture Company to the Company or any AES Group
Company will not be subject to any tax, duty, withholding or deduction,
except withholding tax payable on payments of interest with respect to
any loans to such Joint Venture Company.
(15) None of the Joint Venture Companies is, or with the giving of notice or
lapse of time or both would be, in violation of or in default under (i)
any provision of law, the Project Documents relating to such Joint
Venture Company or the Joint Venture Documents of such Joint Venture
Company, (ii) any other agreement or instrument by which such Joint
Venture Company is bound or to which any of the property or assets of
such Joint Venture Company is subject or (iii) any approval, judgment,
order, decree or regulation of any governmental body or agency or of any
court having jurisdiction over such Joint Venture Company, except for
such defaults that would not have a material adverse effect on such Joint
Venture Company.
(16) Each of the Joint Venture Companies has paid all material taxes which it
is required to have paid, except for taxes payment of which is being
contested in good faith by appropriate proceedings and for which reserves
deemed by it to be adequate have been set aside on its books.
(17) Each of the Joint Venture Companies owns or has been granted all
necessary rights to use, for the approved duration of such Joint Venture
Company, all of the properties and assets owned or used by it or
transferred, assigned or otherwise conveyed to it in connection with its
formation or thereafter, free and clear of all claims, liens, security
interests or other encumbrances, other than Liens permitted under the
Indenture, which would materially affect its ability to perform under the
Project Documents to which it is a party or which would materially affect
the Company's ability to satisfy its payment obligations under the Notes.
Each of the Joint Venture Companies has obtained all land-use rights
which are necessary in connection with the construction, ownership and
operation of the respective Project, for the approved duration of such
Joint Venture Company, and the conduct of their respective businesses as
described in the Registration Statement, free and clear of all
encumbrances and defects (other than such encumbrances or defects which
do not interfere with the use made and proposed to be made of such
land-use rights), and all such land-use rights are valid, binding and
enforceable in accordance with their respective terms. All real
property, buildings and equipment held under lease, if any, by each of
the Joint
B-4
<PAGE> 37
Venture Companies are held by each of them under valid, binding and
enforceable leases.
(18) Each of the Joint Venture Companies (i) is in compliance with all
applicable laws and regulations relating to the protection of human
health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), (ii) has
received all permits, licenses and approvals required, if any, under
applicable Environmental Laws to conduct is business, including to
construct, own and operate the Projects, as described in the Registration
Statement and (iii) is in compliance with all terms and conditions of
such permits, licenses and approvals, except where any noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on such Joint Venture Company
or on the Company's ability to satisfy its payment obligations under the
Notes; and none of the Joint Venture Companies has received any notice of
proceedings relating to the revocation or modification of any of such
permits, licenses or approvals.
(19) To the best of our knowledge after due inquiry, none of the Joint Venture
Companies nor other person has taken any action nor have any other steps
been taken or legal proceedings been started or threatened against any of
the Joint Venture Companies for its winding up or dissolution, or for the
withdrawal, revocation or cancellation of the business license of any of
the Joint Venture Companies; and no notice of appointment of a receiver
of any of the Joint Venture Companies or any of its assets has been
issued and no declaration or order of insolvency has been or is
threatened to be made.
(20) After due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened (i) to which any of the
Project Companies is a party or to which any such Project Company's
properties or assets is subject, or (ii) which could, individually or in
the aggregate, reasonably be expected to have a material adverse effect
on any of the Project Companies or the Projects or the validity or
enforceability of the Underwriting Agreement, the Indenture, the Security
Agreement or the Notes or the Project Documents.
(21) The statements in the (i) in the Prospectus under the captions
"Enforceability of Civil Liabilities;" "Risk Factors -- Risks Pertaining
to the PRC -- Developing Legal System," "-- Risks Related to the
Company's Business -- Regulation and Restrictions; Tariffs," "--
Government Approval Process," "-- Environmental Matters," "The PRC
Electric Power Industry -- Organization of the PRC's Electric Power
Industry" and "-- Electric Power Law;" "Business -- Joint Venture
Companies," "-- Government Approvals," "-- Environmental
B-5
<PAGE> 38
Regulation," "-- Description of the Current Projects" and "-- Description
of the Potential Projects;" and "Appendix A -- The People's Republic of
China -- Environmental Protection," "-- Foreign Exchange Controls and
Exchange Rate Information" and "-- Legal System," and (ii) in the
Company's most recent Annual Report on Form 10-K under the captions "The
People's Republic of China;" "Joint Venture Companies;" "Government
Approvals;" "Projects in Operation or Under Construction:" "Description
of Potential Projects;" "Potential Projects for Which Joint Venture
Contracts Have Been Initialed or Signed;" "Potential Projects for Which
Preliminary Agreements Have Been Signed;" "Legal Proceedings;" "Certain
Relationships and Related Transactions;" in each case insofar as such
statements constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the information called
for with respect to such legal matters, documents and proceedings and,
fairly summarize the matters referred to therein.
B-6
<PAGE> 39
Schedule I
[to be filled in by Commerce & Finance]
B-7
<PAGE> 40
Schedule II
[to be filled in by Commerce & Finance]
B-8
<PAGE> 41
Schedule III
[to be filled in by Commerce & Finance]
B-9
<PAGE> 42
Exhibit C
[Opinion of Conyers, Dill & Pearman]
(1) The Bermuda Prospectus together with the required attachments thereto has
been filed with the Registrar of Companies in Bermuda as required by the
Companies Act. [The Bermuda Prospectus complies in all material respects
with the Companies Act and any other applicable statutes, rules and
regulations of Bermuda or any governmental authority therein.]
(2) The Company is duly incorporated and validly existing and in compliance
(meaning that the Company has not failed to make any filing with any
Bermuda governmental authority or to pay any Bermuda government fee or
tax which might make the Company liable to be struck off the Register of
Companies and thereby cease to exist under the laws of Bermuda) under the
laws of Bermuda.
(3) The Company has the necessary corporate power and authority to enter into
and perform its obligations under the Registration Statement, the
Prospectus, the Underwriting Agreement, the Indenture, the Notes and the
Security Agreement (the "Documents"). The execution and delivery of the
Documents by the Company and the performance of its obligations
thereunder will not violate the memorandum of association or by-laws of
the Company, nor any applicable law or regulation of Bermuda.
(4) The Company has the corporate capacity and power:
(a) to generate, sell, supply, transmit and trade in electricity;
(b) to directly or indirectly and either solely or jointly with
others, to construct, develop, acquire, own, hold, dispose of,
sell or otherwise deal with interests in, manage, operate and
maintain, and advise, consult with and provide services to others
in connection with, electrical power generation facilities of all
kinds and related facilities, including fuel source and supply,
fuel transmission and electricity transmission facilities; and
(c) to borrow or raise or secure the payment of money in such manner
as the Company may think fit;
(d) as set out in paragraphs (b) to (n) and (p) to (u) inclusive of
the Second Schedule to the Companies Act 1981.
(5) The Company has an authorized capitalization as set forth in the
Prospectus.
C-1
<PAGE> 43
(6) The Company has taken all corporate action required to authorize its
execution, delivery and performance of the Documents. The Documents have
been duly executed by or on behalf of the Company, and constitute the
valid and binding obligations of the Company, enforceable in accordance
with the terms thereof.
(7) The Notes to be sold pursuant to the Registration Statement and the
Prospectus have been duly authorized and, when executed, authenticated,
issued and delivered in accordance with the provisions of the Indenture
and as contemplated by the Registration Statement and the Prospectus,
will constitute valid and binding obligations of the Company, enforceable
in accordance with the terms thereof.
(8) No order, consent, approval, license, authorization or validation of or
exemption by any government or public body or authority of Bermuda or any
sub-division thereof is required to authorize or is required in
connection with the execution, delivery, performance and enforcement of
the Documents except such as have been duly obtained in accordance with
Bermuda law and are in full force and effect.
(9) The Company has been designated as a non-resident of Bermuda for exchange
control purposes by the Bermuda Monetary Authority, whose permission for
issue and sale of the Notes as contemplated by the Underwriting Agreement
has been obtained and is in full force and effect, and;
(a) "Foreign Currency" Accounts (all currencies other than Bermuda
dollars) with banks in or outside Bermuda may be opened and
maintained without reference to the Bermuda Monetary Authority.
(b) "External Bermuda Dollar" Accounts with banks in Bermuda may be
opened and maintained provided that balances therein are limited
to those necessary to meet day-to-day local expenses.
(c) "Resident Bermuda Dollar" Accounts may not be opened in the name
of the Company.
(10) It is not necessary to ensure the enforceability in Bermuda of the
Underwriting Agreement, the Indenture, the Security Agreement and the
Notes (the "Agreements") that they be registered in any register kept by,
or filed with, any governmental authority or regulatory body in Bermuda.
However, to ensure the priority in Bermuda of any charge created by the
Agreements that such charge be registered in the Register of Charges in
accordance with Section 55 of the Companies Act 1981. On registration
such charge will have priority in Bermuda
C-2
<PAGE> 44
over any unregistered charge and over any subsequently registered charge
in respect of the assets which are the subject of such charge.
(11) The obligations of the Company under the Indenture and the Notes will
rank at least pari passu in priority of payment with all other unsecured
unsubordinated indebtedness of the Company other than indebtedness which
is preferred by virtue of any provision of the laws of Bermuda of general
application.
(12) The Company is not entitled to any immunity under the laws of Bermuda,
whether characterized as sovereign immunity or otherwise, from any legal
proceedings, whether in Bermuda or elsewhere, to enforce or to collect
upon the Documents (including, without limitation, immunity from service
of process, immunity from jurisdiction of any court or tribunal or
immunity of any of its property from attachment in aid of execution upon
a judgment in respect of itself or its property).
(13) There is no income or other tax of Bermuda imposed by withholding or
otherwise on any payment to be made to or by the Company or the
Underwriters under the Documents. The Documents will not be subject to
ad valorem stamp duty in Bermuda and no registration, documentary,
recording, transfer or other similar tax, fee or charge is payable in
connection with the execution, delivery, filing, registration or
performance of the Agreements.
(15) The choice of the New York law to govern the Agreements is a valid choice
of law and the submission therein by the Company to the non-exclusive
jurisdiction of the federal or state courts in the Borough of Manhattan,
The City of New York (the "Foreign Courts") is valid and binding upon the
Company.
(16) The courts of Bermuda would recognize as a valid judgment, a final and
conclusive judgment in personam obtained in the Foreign Courts against
the parties to the Documents based upon the Documents under which a sum
of money is payable (other than a sum of money payable in respect of
multiple damages, taxes or other charges of a like nature or in respect
of a fine or other penalty) and would give a judgment based thereon
provided that (a) such courts had proper jurisdiction over the parties
subject to such judgment, (b) such courts did not contravene the rules of
natural justice of Bermuda, (c) such judgment was not obtained by fraud,
(d) the enforcement of the judgment would not be contrary to the public
policy of Bermuda, (e) no new admissible evidence relevant to the action
is submitted prior to the rendering of the judgment by the courts of
Bermuda and (f) there is due compliance with the correct procedures under
the laws of Bermuda.
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<PAGE> 45
(17) Based solely upon a search of the Cause Book of the Supreme Court of
Bermuda conducted at [ am/pm] on [ ], there are
no judgments against, nor legal or governmental proceedings, pending in
Bermuda to which the Company is subject.
(18) [The Agreements may be enforced against the Company, in the courts of
Bermuda and any court having appellate jurisdiction therefrom without any
express submission to any such jurisdiction, and, if action were taken in
respect of any of the Agreements before such courts, such courts would
recognize and give effect to the provisions therein whereby they are to
be governed by and construed in accordance with New York law.]
(19) The statements (i) in the Prospectus under the captions "Enforceability
of Civil Liabilities," "The Amalgamation," "Taxation - Bermuda Taxation"
and "Certain Foreign Issuer Considerations" and (ii) in the Registration
Statement in Item 15 of the Prospectus, in each case insofar as such
statements constitute summaries of Bermuda legal matters, documents or
proceedings therein, fairly represent the information called for with
respect to such Bermuda legal matters, documents and proceedings and
fairly summarize the matters referred to therein.
C-4
<PAGE> 46
Schedule I
[Bermuda Approvals]
C-5
<PAGE> 47
Exhibit D
[Opinion of BVI Counsel for the Company]
(1) Each of AES Yangchun Co. Ltd., AES Tien Fu Power Co. Ltd. and AES Anhui
Power Company Ltd. (collectively, the "AES Group Companies" and each an
"AES Group Company") has been duly incorporated and is validly existing
as a corporation in good standing under the laws the British Virgin
Islands, and each of the AES Group Companies has the power and authority
(corporate and other) to own its property and to conduct its business as
described in the Prospectus.
(2) All of the issued shares in the share capital of each AES Group Company
have been duly and validly authorized and issued, and are owned directly
or indirectly by the Company, free and clear of all liens, encumbrances,
restrictions on transfer, equities or claims.
(3) The execution and delivery of and performance by each AES Group Company
of its obligations under the Joint Venture Documents to which it is a
party do not contravene its memorandum and by-laws or any provision of
applicable law or any regulation, judgment, order or decree of any
governmental body or agency or any court having jurisdiction over any
such AES Group Company.
(4) All dividend payments and remittances thereof and other distributions by
each AES Group Company to the Company are free and clear of any tax,
duty, withholding or deduction.
D-1
<PAGE> 48
Exhibit E
[Opinion of Cayman Islands Counsel for the Company]
(1) Jiaozuo Power Partners, L.P. ("Jiaozuo L.P.") has been duly organized and
is validly existing as a limited partnership in good standing under the
laws of its organization and Jiaozuo (G.P.) Corp. (collectively, together
with Jiaozuo L.P., the "AES Group Companies" and each an "AES Group
Company") has been duly incorporated and is validly existing as a
corporation in good standing under the laws the Cayman Islands, and each
of the AES Group Companies has the power and authority (corporate and
other) to own its property and to conduct its business as described in
the Prospectus.
(2) All of the issued shares in the share capital (or partnership interests
in the case of Jiaozuo L.P.) of each AES Group Company have been duly and
validly authorized and issued, and are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, restrictions on
transfer, equities or claims.
(3) The execution and delivery of and performance by each AES Group Company
of its obligations under the Joint Venture Documents to which it is a
party do not contravene its memorandum and by-laws or any provision of
applicable law or any regulation, judgment, order or decree of any
governmental body or agency or any court having jurisdiction over any
such AES Group Company.
(4) All dividend payments and remittances thereof and other distributions by
each AES Group Company to the Company are free and clear of any tax,
duty, withholding or deduction.
E-1
<PAGE> 49
Exhibit F
[Opinion of Labuan Counsel for the Company]
(1) Each of AES Chigen Co. (L) Ltd., AES Tien Fu Power Co (L) Ltd., AES China
Power Holding Co. (L) Ltd., and AES China Holding Co. (L) Ltd.
(collectively, the "AES Group Companies" and each an "AES Group Company")
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of Labuan, and each of the AES Group
Companies has the power and authority (corporate and other) to own its
property and to conduct its business as described in the Prospectus.
(2) All of the issued shares in the share capital of each AES Group Company
have been duly and validly authorized and issued, and are owned directly
or indirectly by the Company, free and clear of all liens, encumbrances,
restrictions on transfer, equities or claims.
(3) The execution and delivery of and performance by each AES Group Company
of its obligations under the Joint Venture Documents to which it is a
party do not contravene its memorandum and by-laws or any provision of
applicable law or any regulation, judgment, order or decree of any
governmental body or agency or any court having jurisdiction over any
such AES Group Company.
(4) All dividend payments and remittances thereof and other distributions by
each AES Group Company to the Company are free and clear of any tax,
duty, withholding or deduction.
F-1
<PAGE> 1
EXHIBIT 4.1
________________________________________________________________________________
AES CHINA GENERATING CO. LTD.
AND
BANKERS TRUST COMPANY,
AS TRUSTEE
________________________________________________________________________________
INDENTURE
DATED AS OF DECEMBER __, 1996
________________________________________________________________________________
$180,000,000
__% NOTES DUE 2006
<PAGE> 2
TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 1.03. Incorporation by Reference of Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 1.04. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 2
THE NOTES
SECTION 2.01. Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.02. Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.03. Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.04. Paying Agent to Hold Money in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.05. Noteholder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.06. Transfer and Exchange; Definitive Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.07. Replacement Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.08. Outstanding Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.09. Determination of Holders' Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.10. Temporary Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.12. Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 3
COVENANTS
SECTION 3.01. Payment of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.02. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.03. Limitation on Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 3.04. Limitation on Incurrence of Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 3.05. Limitation on Payment Restrictions Affecting Project Companies . . . . . . . . . . . . . . . . . 36
SECTION 3.06. Payment of Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.07. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 3.08. Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 3.09. Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 3.10. Commission Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 3.11. Limitation on Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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SECTION 3.12. Limitation on Sales of Assets and Refinancings . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 3.13. Maintenance of Certain Cash Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 3.14. Payment of Stamp Duty and Other Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3.15. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3.16. Notice of Defaults and Other Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3.17. Maintenance of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3.18. Limitation on Issuance of Subsidiary Capital Stock . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3.19. Limitation on Changes in the Nature of the Business . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 3.20. Limitation on Certain Subsidiary Investments . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 3.21. Government Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 3.22. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 3.23. Operations and Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE 4
CONSOLIDATION AND MERGER
SECTION 4.01. Merger and Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 4.02. Successor Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE 5
DEFAULTS AND REMEDIES
SECTION 5.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 5.02. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 5.03. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 5.04. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 5.05. Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 5.06. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 5.07. Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 5.08. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 5.09. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 5.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 5.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 5.12. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE 6
TRUSTEE
SECTION 6.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 6.02. Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
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SECTION 6.03. Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 6.04. Trustees Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 6.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 6.06. Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 6.07. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 6.08. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 6.09. Successor Trustee by Merger, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 6.10. Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 6.11. Preferential Collections of Claims Against Company . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE 7
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 7.01. Discharge of Liability on Notes; Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 7.02. Defeasance and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 7.03. Defeasance of Certain Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 7.04. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 7.05. Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 7.06. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
ARTICLE 8
AMENDMENTS AND SUPPLEMENTS
SECTION 8.01. Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 8.02. With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 8.03. Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 8.04. Revocation and Effect of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 8.05. Notation on or Exchange of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 8.06. Trustee to Sign Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 8.07. Fixing of Record Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
ARTICLE 9
SECURITY AGREEMENT
SECTION 9.01. Security Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 9.02. Holders' Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 9.03. Trust Indenture Act of 1939 Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 9.04. Release upon Termination of the Company's Obligations . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 9.05. Retirement of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
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ARTICLE 10
REDEMPTION
SECTION 10.01. Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 10.02. Selection of Notes to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 10.03. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 10.04. Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 10.05. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 10.06. Notes Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 10.07. Optional Redemption for Changes in Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . 80
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 11.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 11.03. Communication by Holders with Other Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 11.04. Certificate and Opinion as to Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 11.05. Statements Required in Certificate or Opinion . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 11.06. Rules by Trustee and Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 11.07. Successors; No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 11.08. Duplicate Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 11.09. Other Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 11.10. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 11.11. Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 11.12. Judgment Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 11.13. Effect of Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 11.14. Waiver of Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 11.15. Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
EXHIBIT A-FORM OF NOTE
</TABLE>
iv
<PAGE> 6
INDENTURE dated as of December __, 1996, between AES China Generating Co.
Ltd., a corporation established under the laws of Bermuda (the "Company") and
Bankers Trust Company, a New York banking corporation, as trustee (the
"Trustee").
Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the holders of the Company's [__]% Notes Due
2006:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person existing at the time
at which such Person became a Subsidiary and not incurred in connection with,
or in contemplation of, such Person becoming a Subsidiary. Acquired
Indebtedness shall be deemed to be Incurred on the date the acquired Person
becomes a Project Company.
"Additional Amounts" has the meaning set forth in Section 3.06 hereof. Any
reference in this Indenture to principal or interest in respect of the Notes
shall be deemed also to refer to any Additional Amounts that may be payable as
set forth herein and under the Notes.
"Additional Assets" means (i) any property or assets related to the Line of
Business which will be owned and used by the Company or a Project Company, (ii)
the Capital Stock of a Person that becomes a Project Company as a result of the
acquisition of such Capital Stock by the Company or another Project Company, or
(iii) Capital Stock in any Person that at the time of acquisition of such
Capital Stock is a Project Company.
"Adjusted Cash Flow" means, for any period, the excess of (A) the aggregate
amount (without duplication ) of (i) dividends, distributions, payments of
interest and scheduled repayments of loans or advances, in each case, that are
received by the Company and its Wholly Owned Subsidiaries from the Project
Companies during such period, (ii) 50% of the dividends, distributions,
payments of interest and scheduled repayments of loans or advances, in each
case, that are received by the Company and its Wholly Owned Subsidiaries from
any Person other than a Project Company during such period, (iii) all payments
received by the Company and its Wholly Owned Subsidiaries during such period
from any Person with respect to agreements to provide development, construction
or operations management and the provision of consulting or advisory services;
(iv) 50% of the combined interest income of the Company and its Wholly Owned
Subsidiaries for such period from cash, cash equivalents and investments in
marketable securities; (v) the interest income (net of interest expense) of the
Company
<PAGE> 7
and its Wholly Owned Subsidiaries from the transactions referred to in clause
(viii) of the definition of Permitted Investments over (B) the aggregate amount
(without duplication) of (i) the combined selling, general and administrative
expenses of the Company and its Wholly Owned Subsidiaries for such period
determined in accordance with GAAP and (ii) the Company Designated Costs for
such period and (iii) the total income taxes paid by the Company and its Wholly
Owned Subsidiaries during such period.
"Adjusted Interest Expense" means, for any period, the sum of (without
duplication) (a) the combined interest expense of the Company and its Wholly
Owned Subsidiaries for such period as determined in accordance with GAAP,
including, without limitation or duplication, (i) amortization of debt issuance
costs or of original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in accordance with the
effective interest method of accounting, (ii) accrued interest, (iii) noncash
interest payments, (iv) commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing, (v)
interest actually paid by the Company or any Wholly Owned Subsidiary under any
guarantee of Indebtedness or other obligation of any other Person and (vi) net
costs associated with Interest Rate Agreements (including amortization of
discounts) and Currency Agreements of the Company or any Wholly Owned
Subsidiary relating to Indebtedness, plus (b) all but the principal component
of rentals in respect of Capitalized Lease Obligations paid, accrued, or
scheduled to be paid or accrued by the Company or any Wholly Owned Subsidiary,
plus (c) capitalized interest, plus (d) dividends paid in respect of Preferred
Stock of the Company or any Wholly Owned Subsidiary held by Persons other than
the Company or any Wholly Owned Subsidiary, plus (e) cash contributions to any
employee stock ownership plan to the extent such contributions are used by such
employee stock ownership plan to pay interest or fees to any person (other than
the Company) in connection with loans Incurred by such employee stock ownership
plan to purchase Capital Stock of the Company, plus (f) the interest expense of
any Project Company to the extent attributable to any Indebtedness of such
Project Company to the extent guaranteed by the Company or any Wholly Owned
Subsidiary, minus (g) interest expense of the Company or any Wholly Owned
Subsidiary attributable to Indebtedness referred to in clause (viii) of the
definition of "Permitted Investments."
"AES" means The AES Corporation, a Delaware corporation, its successors,
and any Subsidiary thereof.
"Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the
2
<PAGE> 8
foregoing. For purposes of Section 3.11 only, "Affiliate" shall also mean any
beneficial owner of 5% or more of the total Voting Shares (on a fully Diluted
Basis) of the Company or of rights or warrants to purchase such stock (whether
or not currently exercisable) and any Person who would be an Affiliate of any
such beneficial owner pursuant to the first sentence hereof.
"Agent" means any Registrar, Paying Agent, authenticating agent,
co-registrar or additional paying agent.
"Asset Sale" means any sale, transfer or other disposition (including by
way of merger, consolidation or sale leaseback transactions, but excluding
(except as provided for in the provisions described in the last paragraph of
Section 3.12(b)) those permitted by Article 4 hereof and those permitted by
Section 3.03 hereof) in one or a series of transactions by the Company or any
Project Company to any Person other than the Company or any Wholly Owned
Subsidiary, of (i) all or any of the Capital Stock of the Project Company, (ii)
all or substantially all of the assets of any operating unit, Facility or
division of the Company or any Project Company or (iii) any other property or
assets or rights to acquire property or assets of the Company or any Project
Company outside of the ordinary course of business of the Company or such
Project Company.
"Attributable Costs" means, for any period, the Company Designated Costs
for such period to the extent that such amount does not exceed an amount
calculated for such period at a rate equal to $10 million per annum (which
shall increase by 5% for each fiscal year beginning on or after December 1,
1997).
"Authorized Officers" means with respect to the Company, the President, the
Chief Financial Officer and any vice president.
"Average Life" means, as of the date of determination, with respect to any
Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the sum
of the products of (A) the numbers of years from the date of determination to
the dates of each successive scheduled principal payment of such Indebtedness
or scheduled redemption or similar payment with respect to such Indebtedness or
Preferred Stock multiplied by (B) the amount of such payment by (ii) the sum of
all such payments.
"Bankruptcy Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
"Bankruptcy Law" means Title 11, United States Code, or any similar federal
or state law or laws of Bermuda for the relief of debtors or the
administration, reorganization or liquidation of debtors' estates for the
benefit of their creditors.
3
<PAGE> 9
"Bermuda" means the British colony of Bermuda.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee thereof.
"Board Resolution" means a copy of a resolution certified by a director of
the Company to have been duly adopted by the Board of Directors to be in full
force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York are authorized by law to close
or are otherwise not open for business. If any payment date hereunder or under
the Notes is not a Business Day, payment may be made at that place on the next
succeeding day that is a Business Day, and no interest shall accrue for the
intervening period. If a regular record date hereunder or under the Notes is
not a Business Day, the regular record date shall not be affected.
"Capital Stock" means any and all shares, interests (including joint
venture interests), participations or other equivalents (however designated) of
capital stock of a corporation or any and all equivalent ownership interests in
a Person (other than a corporation).
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present
value of the rental obligations of such Person as lessee, in conformity with
GAAP, is required to be capitalized on the balance sheet of such Person; the
Stated Maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty; and "Capitalized
Lease Obligations" means the rental obligations, as aforesaid, under such
lease.
"Change of Control" means the occurrence of any of the following events:
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than AES or an underwriter engaged in a firm commitment
underwriting on behalf of the Company, is or becomes the beneficial owner (as
such term is used in Rules 13d-3 and 13d-5 under the Exchange Act, except that
for purposes of this clause (i) a person shall be deemed to have beneficial
ownership of all shares that such person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time), directly
or indirectly, of more than 35% of the total outstanding shares of Class A
Common Stock; (ii) AES is no longer entitled to elect at least one half of the
members of the Board of Directors; (iii) AES ceases to be the beneficial owner
(as such term is used in Rules 13d-3 and 13d-5 under the Exchange Act) of at
least 6,000,000 Voting Shares of
4
<PAGE> 10
the Company (as adjusted from time to time for any stock dividends, splits or
recombinations after the Issue Date); or (iv) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors (together with any new directors whose election by the
Board of Directors or whose nomination for election by the stockholders was
approved by a vote of 66-2/3% of the directors of the Company then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors then in office.
"Change of Control Triggering Event" means either (x) the occurrence of
both an event specified in clause (i) or (iv) of the definition of Change of
Control and a Rating Decline or (y) the occurrence of an event specified in
clause (ii) or (iii) of the definition of Change of Control.
"Class A Common Stock" means the Class A Common Stock, par value $0.01 per
share, of the Company.
"Class B Common Stock" means the Class B Common Stock, par value $0.01 per
share, of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning set forth in the Security Agreement.
"Collateral Account" has the meaning set forth in the Security Agreement.
"Collateral Agent" means Bankers Trust Company as collateral agent, and any
successor thereof, under the Security Agreement.
"Commission" means the Securities and Exchange Commission.
"Company" means AES China Generating Co. Ltd., a Bermuda corporation, until
a successor replaces it pursuant to the terms and conditions of this Indenture
and thereafter means the successor.
"Company Designated Costs" means the total costs of development,
construction or operations management and the provision of consulting or
advisory services incurred by the Company and its Wholly Owned Subsidiaries
(net of any amounts received in reimbursement of such costs to the extent not
in excess of such costs).
"Consolidated Current Liabilities," as of the date of determination, means
the aggregate amount of liabilities of the Company and its Consolidated
Restricted
5
<PAGE> 11
Subsidiaries which may properly be classified as current liabilities (including
taxes accrued as estimated), after eliminating (i) all inter-company items
between the Company and any Consolidated Subsidiary and (ii) deducting all
current maturities of long-term Indebtedness, all as determined in accordance
with GAAP.
"Consolidated Net Income (Loss)" means, for any period, as applied to the
Company, the consolidated net income (loss) of the Company and its Consolidated
Restricted Subsidiaries for such period, determined in accordance with GAAP,
adjusted by excluding (without duplication), to the extent included in such net
income (loss), the following: (i) all extraordinary gains or losses; (ii) any
net income of any Person (other than the Company and its Consolidated
Restricted Subsidiaries), except that (A) the Company's equity in the net
income of any such Person for such period shall be included in Consolidated Net
Income (Loss) up to the aggregate amount of cash actually distributed by such
Person during such period to the Company or a Restricted Subsidiary as a
dividend or other distribution and (B) the equity of the Company or a
Restricted Subsidiary in a net loss of any such Person for such period shall be
included in determining Consolidated Net Income (Loss); (iii) the net income of
any Restricted Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by such Restricted Subsidiary of such income
is not at the time thereof permitted, directly or indirectly, by operation of
the terms of its charter or bye-laws or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such
Restricted Subsidiary or its stockholders; (iv) any net income (or loss) of any
Person combined with the Company or any of its Restricted Subsidiaries on a
"pooling of interests" basis attributable to any period prior to the date of
such combination; and (v) any gain (but not loss) realized upon the sale or
other disposition of any property, plant or equipment of the Company or its
Restricted Subsidiaries (including pursuant to any sale-and-leaseback
arrangement) which is not sold or otherwise disposed of in the ordinary course
of business and any gain (but not loss) realized upon the sale or other
disposition by the Company or any Restricted Subsidiary of any Capital Stock of
any Person, provided that losses shall be included on an after-tax basis; and
further adjusted by subtracting from such net income the tax liability of any
parent of the Company to the extent of payments made to such parent by the
Company pursuant to any tax sharing agreement or other arrangement for such
period.
"Consolidated Net Tangible Assets" means, as of any date of determination,
as applied to the Company, the total amount of assets (less accumulated
depreciation or amortization, allowances for doubtful receivables, other
applicable reserves and other properly deductible items) as set forth on the
most recently available quarterly or annual consolidated balance sheet of the
Company and its Consolidated Restricted Subsidiaries, determined in accordance
with GAAP, and after giving effect to purchase accounting and after deducting
therefrom, to the extent otherwise included, the amounts of: (i) Consolidated
Current Liabilities; (ii) minority interests in Consolidated Subsidiaries held
6
<PAGE> 12
by Persons other than the Company or a Restricted Subsidiary; (iii) excess of
cost over fair value of assets of businesses acquired, as determined in good
faith by the Board of Directors as evidenced by a Board Resolution; (iv) any
revaluation or other write-up in value of assets subsequent to December 31,
1995 as a result of a change in the method of valuation in accordance with
GAAP; (v) unamortized debt discount and expenses and other unamortized deferred
charges, goodwill, patents, trademarks, service marks, trade names, copyrights,
licenses, organization or developmental expenses and other intangible items;
(vi) treasury stock; (vii) any cash set apart and held in a sinking or other
analogous fund established for the purpose of redemption or other retirement of
Capital Stock to the extent such obligation is not reflected in Consolidated
Current Liabilities; and (viii) any Indebtedness of the Company or a Restricted
Subsidiary referred to in clause (viii) of the definition of Permitted
Investments.
"Consolidated Net Worth" means, at any date of determination, as applied to
the Company, stockholders' equity as set forth on the most recently available
quarterly or annual consolidated balance sheet of the Company and its
Consolidated Restricted Subsidiaries, less any amounts attributable to
Redeemable Stock or Exchangeable Stock, the cost of treasury stock and the
principal amount of any promissory notes receivable from the sale of Capital
Stock of the Company or any Subsidiary.
"Consolidation" means, with respect to any Person, the consolidation of
accounts of such Person and each of its subsidiaries if and to the extent the
accounts of such Person and such subsidiaries are consolidated in accordance
with GAAP. The term "Consolidated" shall have a correlative meaning.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any Project Company against fluctuations in currency values to or
under which the Company or any Project Company is a party on the Issue Date or
becomes a party thereafter.
"Debt Service Reserve Account" has the meaning set forth in the Security
Agreement.
"Default" means any event which is, or, after notice or passage of time or
both, would be, an Event of Default.
"Defaulted interest" means any interest on any Note which is payable, but
is not punctually paid or duly provided for on any Interest Payment Date.
"Depositary" means The Depository Trust Company, its nominees, and their
respective successors until a successor Depositary shall have become such
pursuant to the
7
<PAGE> 13
applicable provisions of this Indenture and thereafter "Depositary" shall mean
or include each Person who is then a Depositary hereunder.
"Designated Financing" means any Incurrence of Indebtedness by an Existing
Subsidiary or Existing Joint Venture that refinances Shareholder Loans in whole
or in part.
"Dollar Permitted Investments" means investments which are denominated and
payable in US dollars in any one or more of the following: (i)(a) direct,
interest-bearing obligations of the United States in certificated form; (b)
direct, interest-bearing obligations of, and guaranteed as to timely payment of
principal and interest by, the United States, but only if such obligations are
issued in the form of any entry made on the records of the Federal Reserve Bank
of New York; and (c) direct interest bearing obligations of, and interest
bearing obligations guaranteed as to timely payment of principal and interest
by, the Federal National Mortgage Association, the Government National Mortgage
Association, the Federal Home Loan Mortgage Corporation or the Student Loan
Marketing Association, but only if (A) at the time of investment, such
obligations are assigned the highest credit rating by the Rating Agency and (B)
such obligations have been deposited with The Depository Trust Company and its
successors, or are issued in the form of an entry made on the records of the
Federal Reserve Bank of New York; (ii) certificates of deposit with an original
term to maturity (x) of not more than 180 days or (y) with respect to the
amounts representing the interest payment amounts due on [__________], 1997 or
[_____________], 1997, not exceeding the second Business Day prior to such
date, issued by any U.S. depositary institution or trust company whose
principal offices are located in the Borough of Manhattan, City and State of
New York, New York (including the Trustee acting in its individual capacity);
provided that the short-term unsecured debt obligations of such depositary
institution or trust company at the time of such investment are assigned a
rating of "A-1" by S&P and "P1" by Moody's or the long-term unsecured debt
obligations of such depositary institution or trust company at the time of such
investment, are assigned a rating of "A-" or higher by S&P and "A3" or higher
by Moody's; (iii) repurchase obligations pursuant to a written agreement (a)
with respect to any obligation described in clause (i) above, where (in each
case) the Trustee has taken delivery of such obligation and (b) by a U.S.
depositary institution or trust company whose principal offices are located in
the Borough of Manhattan, City and State of New York, New York the short-term
unsecured debt obligations of which are rated "A-1" by S&P and "P-1" by Moody's
at the time of such investment or the long-term unsecured debt obligations of
which are rated "A-" or higher by S&P and "A3" or higher by Moody's (including,
if applicable, the Trustee acting in its individual capacity) at time of such
investment; or (iv) commercial paper that (a) is assigned a rating of "A-1" by
S&P and "P-1" by Moody's at the time of such investment and (b) had an original
term to maturity of not more than 180 days.
8
<PAGE> 14
"Dollars," "$" and "US dollars" mean United States dollars.
"Eligible Joint Venture" means a Joint Venture (other than a Subsidiary)
(i) that is formed with respect to the construction, development, acquisition,
servicing, ownership, improvement, operation or management of a single
Facility; (ii) in which the Company, directly or indirectly, owns at least 25%
of the Capital Stock therein and (iii) in respect of which the Company,
directly or indirectly, either (a) controls, by voting power, membership on the
board of directors or management committee or other similar governing body, or
through the provisions of any applicable partnership, joint venture,
shareholder or other similar agreement or under an operating, maintenance or
management agreement or otherwise, the management and operation of the Joint
Venture and any Facility of such Joint Venture or (b) otherwise has the right
to control or veto material acts and decisions with respect to the management
or operation of the Joint Venture that, taken as a whole, are substantially
similar to the rights of the Company with respect to the Existing Joint
Ventures as of the Issue Date.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchangeable Stock" means any Capital Stock which by its terms is
exchangeable or convertible at the option of any Person other than the Company
into another security (other than Capital Stock of the Company which is neither
Exchangeable Stock nor Redeemable Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Joint Venture" means any of Chengdu-AES-Kaihua Gas Turbine Power
Co. Ltd., Wuhu Shaoda Electric Power Company Ltd. and Yangchun Fuyang Diesel
Engine Power Co. Ltd., and their respective successors, in each case, so long
as such Person is a Project Company.
"Existing Project Company Net Cash Flow" means, for any period, (A) the
aggregate amount (without duplication) of dividends, distributions, payments of
interest and scheduled repayments of loans or advances (excluding any of such
amounts that constitute Special Proceeds), in each case, that are received by
the Company and its Wholly Owned Subsidiaries from Existing Joint Ventures and
Existing Subsidiaries during such period less (B) the sum of (i) Attributable
Costs for such period, (ii) the aggregate interest expense accrued with respect
to the Notes after July [__], 1998 and (iii) the aggregate principal amount of
Notes purchased from time to time by the Company (other than pursuant to an
Offer or a Change of Control Offer).
9
<PAGE> 15
"Existing Subsidiary" means any of Sichuan Fuling Aixi Power Company Ltd.,
Hunan Xiangci-AES Hydro Power Company Ltd., Anhui Liyuan AES Power Company
Limited, the Hefei Zhongli Energy Company Ltd., Jiaozuo Wan Fang Power Ltd.,
Wuxi- AES-CAREC Gas Turbine Power Company Ltd. and Wuxi-AES-Zhonghang Power
Company Ltd., and their respective successors, in each case, so long as such
Person is a Project Company.
Facility" means a power or steam generation facility or energy producing
facility and related assets (including without limitation electric power
transmission facilities or lines).
"Fixed Charge Coverage Ratio" as of any date of determination means the
ratio of (i) Adjusted Cash Flow for the period of the most recent four
consecutive fiscal quarters for which financial information is available to
(ii) the Adjusted Interest Expense for such period plus the Adjusted Interest
Expense for such period with respect to any Indebtedness proposed to be
Incurred by the Company and its Wholly Owned Subsidiaries; provided, however,
that, in making such computation, the Adjusted Interest Expense attributable to
interest on any Indebtedness bearing a floating interest rate shall be computed
on a pro forma basis as if the rate in effect on the date of computation had
been the applicable rate for the entire period; and provided further, that in
the event (A) of the designation of any Restricted Subsidiary or Restricted
Joint Venture to be an Unrestricted Company during or after such period, or (B)
the Company or any Wholly Owned Subsidiary has made any Asset Sales, Designated
Financings or acquisitions of assets not in the ordinary course of business
(including acquisitions of other Persons by merger, consolidation or purchase
of Capital Stock), or has Incurred or repaid any Indebtedness (or any guarantee
thereof has terminated), during or after such period, or any Project Company
has been designated to be an Unrestricted Company (or redesignated as a Project
Company) during or after such period, such computation shall be made on a pro
forma basis as if such event had taken place on the first day of such period;
and provided further that the Adjusted Cash Flow with respect to any
acquisitions shall not exceed the net income attributable to the acquired
assets for such period.
"Fully Diluted Basis" means after giving effect to the exercise of any
outstanding options, warrants or rights to purchase Voting Shares and the
conversion or exchange of any securities convertible into or exchangeable for
Voting Shares.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect and, to the extent optional, adopted by the Company on
the Issue Date, consistently applied, including, without limitation, those set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board.
10
<PAGE> 16
"guarantee" means, as applied to any obligation, contingent or otherwise,
of any Person, (i) a guarantee, direct or indirect, in any manner, of any part
or all of such obligation, (other than by endorsement of negotiable instruments
for collection in the ordinary course of business) and (ii) an agreement,
direct or indirect, contingent or otherwise, the practical effect of which is
to ensure in any way the payment or performance (or payment of damages in the
event of nonperformance) of any part or all of such obligation, including the
payment of amounts drawn down under letters of credit.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Incur" means, as applied to any obligation, to create, incur, issue,
assume, guarantee or in any other manner become liable with respect to,
contingently or otherwise, such obligation, and "Incurred," "Incurrence," and
"Incurring" shall each have a correlative meaning; provided, however, that any
Indebtedness or Capital Stock of a Person existing at the time such Person
becomes (after the Issue Date) a Project Company (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Project Company at the time it becomes a Project Company, and provided,
further, that any amendment, modification or waiver of any provision of any
document pursuant to which Indebtedness was previously Incurred shall not be
deemed to be an Incurrence of Indebtedness as long as (i) such amendment,
modification or waiver does not (A) increase the principal or premium thereof
or interest rate thereon, (B) change to an earlier date the Stated Maturity
thereof or the date of any scheduled or required principal payment thereon or
the time or circumstances under which such Indebtedness may or shall be
redeemed, (C) if such Indebtedness is contractually subordinated in right of
payment to the Notes, modify or affect, in any manner adverse to the Holders,
such subordination, (D) if the Company is the obligor thereon, provide that a
Project Company shall be an obligor, (E) if such Indebtedness is Non-Recourse
Debt, cause such Indebtedness to no longer constitute Non-Recourse Debt or (F)
violate, or cause the Indebtedness to violate, the provisions of Sections 3.05
or 3.07 and (ii) such Indebtedness would, after giving effect to such
amendment, modification or waiver as if it were an Incurrence, comply with
clause (i) of the first proviso to the definition of "Refinancing
Indebtedness."
"Indebtedness" of any Person means, without duplication, (i) the principal
of and premium (if any such premium is then due and owing) in respect of (A)
indebtedness of such Person for money borrowed and (B) indebtedness evidenced
by notes, debentures, bonds or other similar instruments for the payment of
which such Person is responsible or liable; (ii) all Capitalized Lease
Obligations of such Person; (iii) all obligations of such Person Incurred as
the deferred purchase price of property, all conditional sale obligations of
such Person and all obligations of such Person under any title retention
agreement; (iv) all obligations of such Person for the reimbursement of any
obligor on any letter of credit,
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<PAGE> 17
banker's acceptance or similar credit transaction (other than obligations with
respect to letters of credit securing obligations (other than obligations
described in (i) through (iii) above) entered into in the ordinary course of
business of such Person to the extent such letters of credit are not drawn upon
or, if and to the extent drawn upon, such drawing is reimbursed no later than
the tenth Business Day following receipt by such Person of a demand for
reimbursement following payment on the letter of credit); (v) Redeemable Stock
of such Person and, in the case of any Subsidiary, any other Preferred Stock
not owned by the Company or a Wholly Owned Subsidiary, in either case valued
at, in the case of Redeemable Stock, the greater of its voluntary or
involuntary maximum fixed repurchase price exclusive of accrued and unpaid
dividends or, in the case of Preferred Stock that is not Redeemable Stock, its
liquidation preference exclusive of accrued and unpaid dividends; (vi) all
obligations of such Person in respect of Interest Rate Agreements and Currency
Agreements; (vii) all obligations of the type referred to in clauses (i)
through (vi) of other Persons and all dividends of other Persons for the
payment of which, in either case, such Person is responsible or liable,
directly or indirectly, as obligor, guarantor or otherwise, including by means
of any guarantee; and (viii) all obligations of the type referred to in clauses
(i) through (vii) of other Persons secured by any Lien on any property or asset
of such Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the value of such
property or assets or the amount of the obligation so secured; provided,
however, that Indebtedness shall not include trade accounts payable arising in
the ordinary course of business. For purposes hereof, the "maximum fixed
repurchase price" of any Redeemable Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Stock as if such Redeemable Stock were purchased on any date on
which Indebtedness shall be required to be determined pursuant to this
Indenture, and if such price is based upon, or measured by, the fair market
value of such Redeemable Stock, such fair market value to be determined in good
faith by the Board of Directors as evidenced by a Board Resolution. The amount
of Indebtedness of any Person at any date shall be, with respect to
unconditional obligations, the outstanding balance at such date of all such
obligations as described above and, with respect to any contingent obligations
at such date, the maximum liability determined by such Person's board of
directors, in good faith, as, in light of the facts and circumstances existing
at the time, reasonably likely to be Incurred upon the occurrence of the
contingency giving rise to such obligation; provided that the amount
outstanding at any time of any Indebtedness issued with original issue discount
is the face amount of such Indebtedness less the remaining unamortized portion
of the original issue discount of such Indebtedness as determined in accordance
with GAAP.
"Interest Payment Date" means the stated maturity of an installment of
interest on the Notes.
"Interest Rate Agreement" means any interest rate protection agreement,
interest
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<PAGE> 18
rate future agreement, interest rate option agreement, interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement or other similar agreement or arrangement
designed to protect against fluctuations in interest rates to or under which
the Company or any Project Company is a party on the Issue Date or becomes a
party thereunder.
"Investment" means, with respect to any Person, any direct or indirect
advance, loan or other extension of credit or capital contribution to (by means
of any transfer of cash or other property to others or any payment for property
or services for the account or use of others), or any other investment in any
other Person, or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or assets issued or owned
by any other Person (whether by merger, consolidation, amalgamation, sale of
assets or otherwise). For purposes of the provisions set forth in Section
3.03, (i) "Investment" shall include the portion (proportionate to the
Company's Equity Interest in such Project Company) of the fair market value of
the net assets of any Project Company at the time such Project Company is
designated an Unrestricted Company and shall exclude the fair market value of
the net assets of any Unrestricted Company at the time that such Unrestricted
Company is designated a Project Company, as the case may be, and (ii) any
property transferred to or from an Unrestricted Company shall be valued at its
fair market value at the time of such transfer, in each case as determined by
the Board of Directors in good faith as evidenced by a Board Resolution.
"Issue Date" means the date on which the Notes are originally issued under
this Indenture.
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether corporation, partnership or other legal form.
"Lien" means any mortgage, lien, pledge, charge, or other security interest
or encumbrance of any kind (including any conditional sale or other title
retention agreement and any lease in the nature thereof).
"Line of Business" means the direct or indirect construction, development,
acquisition, servicing, ownership, improvement, operation and management of
Facilities and consulting or advisory activities related thereto.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Available Cash" means, (A) with respect to any Designated Financing,
the aggregate amount of cash received by the Company or a Restricted Subsidiary
in repayment of Shareholder Loans in connection therewith; (B) with respect to
any Restricted Designation Event, an amount equal to the fair market value of
an Existing
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<PAGE> 19
Subsidiary or Existing Joint Venture that is designated an Unrestricted
Company; and (C) with respect to any Asset Sale, the cash or cash equivalent
payments received by the Company or a Project Company in connection with such
Asset Sale (including any cash received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise, but only as or when
received and also including the proceeds of other property received when
converted to cash or cash equivalents) net of the sum of, without duplication,
(i) all reasonable legal, title and recording tax expenses, reasonable
commissions, and other reasonable fees and expenses incurred directly relating
to such Asset Sale, (ii) all local, state, federal and foreign taxes required
to be paid or accrued as a liability by the Company or any Project Company as a
consequence of such Asset Sale, (iii) payments made to repay Indebtedness which
is secured by any assets subject to such Asset Sale in accordance with the
terms of any Lien upon or other security agreement of any kind with respect to
such assets, or which must by its terms, or by applicable law, be repaid out of
the proceeds from such Asset Sale and (iv) all distributions required by any
contract entered into other than in contemplation of such Asset Sale to be paid
to any holder of an Equity Interest in such Project Company as a result of such
Asset Sale, so long as such distributions do not exceed such holder's pro rata
portion (based on such holder's proportionate Equity Interest) of the cash or
cash equivalent payments described above, net of the amounts set forth in
clauses (i)-(iii) above.
"Net Cash Proceeds" means, with respect to any issuance or sale of Capital
Stock by any Person, the cash proceeds to such Person of such issuance or sale
net of attorneys' fees, accountants' fees, underwriters' or placement agents'
fees, discounts or commissions and brokerage, consultancy and other fees
actually incurred by such Person in connection with such issuance or sale and
net of taxes paid or payable by such Person as a result thereof.
"Non-Convertible Capital Stock" means, with respect to any Person, any
Capital Stock of such Person which is not convertible into another security
other than non-convertible common stock of such Person; provided, however, that
Non- Convertible Capital Stock shall not include any Redeemable Stock or
Exchangeable Stock.
"Non-Recourse Debt" means Indebtedness of any Project Company (or of any
other Person that directly or indirectly owns the Capital Stock of such Project
Company as its sole assets) that is Incurred to acquire, develop, improve,
construct or to provide working capital for a Facility owned by such Project
Company, provided that such Indebtedness is without recourse to any assets of
the Company or any Project Company other than the assets or Capital Stock of
the Project Company Incurring such Indebtedness (or any other Person that,
directly or indirectly owns such Capital Stock as its sole assets) and the
income and proceeds therefrom. Indebtedness that does not comply with the
foregoing sentence because of a guarantee provided by the Company or another
Project Company will nevertheless qualify as Non-Recourse Debt so long as such
14
<PAGE> 20
guarantee complies with the restrictions set forth under Section 3.04.
"Notes" means all series of the [__]% Notes Due 2006 that are issued under
and pursuant to the terms of this Indenture, as amended or supplemented from
time to time.
"Offering" means the public offering and sale of the Notes.
"Officers' Certificate" means a certificate signed by two Authorized
Officers of the Company, one of whom must be the President or Chief Financial
Officer of the Company. Each Officers' Certificate (other than certificates
provided pursuant to TIA Section 314(a)(4)) shall include the statements
provided for in TIA Section 314(e).
"Operating Lease Obligations" means any obligation of the Company and its
Restricted Subsidiaries on a Consolidated basis incurred or assumed under or in
connection with any lease of real or personal property which, in accordance
with GAAP, is not required to be classified and accounted for as a capital
lease.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel, if so acceptable, may be an employee
of or counsel to the Company or the Trustee. Each such Opinion of Counsel
shall include the statements provided for in TIA Section 314(e).
"Permitted Investments" means (i) any Investment in any Restricted
Subsidiary (or any Person that would become a Restricted Subsidiary as a result
of such Investment) by the Company or any other Restricted Subsidiary or in the
Company by any Restricted Subsidiary; (ii) any Restricted Joint Venture
Investment; (iii) Investments in existence on the date of this Indenture and
Investments pursuant to letters of intent or legally binding commitments in
existence on the date of this Indenture; (iv) loans and advances made to
employees of the Company in the ordinary course of business consistent with
past practices; (v) loans and advances made by a Project Company to any Person
in connection with the provision of services by such Person to such Project
Company, the construction by such Person of fuel transportation facilities for
such Project Company or the construction by such Person of transmission
facilities or lines interconnecting such Project Company's Facility with an
electric power grid; (vi) any Investment in (a) obligations of the U.S.
government and its agencies or instrumentalities; (b) bank deposits and bank
obligations (including certificates of deposit, time deposits and bankers'
acceptances); (c) floating rate securities and other instruments issued by
governments or international development agencies; (d) commercial paper and
other short-term corporate debt obligations; (e) money market funds; and (f)
repurchase agreements with banks and broker-dealers with respect to securities
described in clauses (a) through (d) above; (vii) Dollar Permitted Investments;
and (viii) any loan made to or deposit made with any commercial banking
institution rated "A-" or higher by S&P and
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<PAGE> 21
"A3" or higher by Moody's in connection with a substantially similar loan made
by an affiliate of such commercial banking institution to the Company or a
Wholly Owned Subsidiary.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"Preferred Stock," as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"principal" of a Note means the principal of the Note plus, if applicable,
the premium on the Note.
"Project Companies" means the Restricted Subsidiaries and Restricted Joint
Ventures and "Project Company" means any of them.
"Rating Agencies" means (i) S&P and Moody's or (ii) if S&P or Moody's or
both shall not make a rating of the Notes publicly available, an
internationally recognized securities rating agency or agencies, as the case
may be, selected by the Company which shall be substituted for S&P or Moody's
or both, as the case may be.
"Rating Category" means (i) with respect to S&P, any of the following
categories: AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor
categories, (ii) with respect to Moody's, any of the following categories: Aaa,
Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories) and
(iii) the equivalent of any such category used by another Rating Agency). In
determining whether the rating of the Notes has decreased by one or more
gradations, gradations within Rating Categories (+ and - for S&P; 1, 2 and 3
for Moody's) shall be taken into account (e.g., with respect to S&P, a decline
in a rating from BB+ to BB, as well as from BB- to B+, will constitute a
decrease of one gradation).
"Rating Decline" means the occurrence of (i) or (ii) below on, or within 90
days after, the earliest of (A) the Company having become aware that a Change
of Control has occurred, (B) the date of public notice of the occurrence of a
Change of Control or (C) the date of public notice of the intention by AES or
the Company to approve, recommend or enter into, any transaction which, if
consummated, would result in a Change of Control (which period shall be
extended so long as the rating of the Notes is under publicly announced
consideration or possible downgrade by either of the Rating Agencies), (i) a
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<PAGE> 22
decrease of the rating of the Notes by either Rating Agency by one or more
rating gradations or (ii) the failure by the Company to advise the Rating
Agencies, in writing, of such occurrence or any subsequent material
developments or to use its best efforts to obtain, from at least one Rating
Agency, a written, publicly announced affirmation of its rating of the Notes,
stating that it is not downgrading and is not considering downgrading the
Notes.
"Redeemable Stock" means any class or series of Capital Stock of any Person
that (a) by its terms, by the terms of any security into which it is
convertible or exchangeable or otherwise is, or upon the happening of an event
or passage of time would be, required to be redeemed (in whole or in part) on
or prior to the first anniversary of the Stated Maturity of the Notes, (b) is
redeemable at the option of the holder thereof at any time on or prior to the
first anniversary of the Stated Maturity of the Notes (other than on a Change
of Control or Asset Sale, provided that such Change of Control or Asset Sale
shall not yet have occurred) or (c) is convertible into or exchangeable for
Capital Stock referred to in clause (a) or clause (b) above or debt securities
at any time prior to the first anniversary of the Stated Maturity of the Notes.
"Refinancing Indebtedness" means Indebtedness that refunds, refinances,
replaces, renews, repays or extends (including pursuant to any defeasance or
discharge mechanism) (collectively, "refinances," and "refinanced" shall have a
correlative meaning) any Indebtedness of the Company or a Project Company
existing on the Issue Date or Incurred in compliance with this Indenture
(including Indebtedness of the Company that refinances Indebtedness of any
Project Company and Indebtedness of any Project Company that refinances
Indebtedness of another Project Company) including Indebtedness that refinances
Refinancing Indebtedness; provided, however, that (i) if the Indebtedness being
refinanced is contractually subordinated in right of payment to the Notes, the
Refinancing Indebtedness shall be contractually subordinated in right of
payment to the Notes to at least the same extent as the Indebtedness being
refinanced, (ii) if the Indebtedness being refinanced is Non-Recourse Debt,
such Refinancing Indebtedness shall be Non-Recourse Debt, (iii) the Refinancing
Indebtedness is scheduled to mature either (a) no earlier than the Indebtedness
being refinanced or (b) after the Stated Maturity of the Notes, (iv) the
Refinancing Indebtedness has an Average Life at the time such Refinancing
Indebtedness is Incurred that is equal to or greater than the Average Life of
the Indebtedness being refinanced and (v) such Refinancing Indebtedness is in
an aggregate principal amount (or if issued with original issue discount, an
aggregate issue price) that is equal to or less than the aggregate principal
amount (or if issued with original issue discount, the aggregate accreted
value) then outstanding (plus fees and expenses, including any premium, swap
breakage and defeasance costs) under the Indebtedness being refinanced; and
provided, further, that (x) Refinancing Indebtedness shall not include
Indebtedness of a Project Company that refinances Indebtedness of the Company;
(y) the provisions of clauses (iii) and (iv) above shall not
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<PAGE> 23
be applicable with respect to any Refinancing Indebtedness that refinances
Shareholder Loans; and (z) Refinancing Indebtedness that refinances Shareholder
Loans of any Person other than the Company or any of its Subsidiaries shall be
pari passu or subordinated to the Shareholder Loans being refinanced.
"Restricted Designation Event" means the designation by the Board of
Directors of the Company of any Existing Subsidiary or Existing Joint Venture
to be an Unrestricted Company.
"Restricted Joint Venture" means any Eligible Joint Venture of the Company
that is not designated an Unrestricted Joint Venture by the Board of Directors.
"Restricted Joint Venture Investment" means any Investment which is made by
the Company or a Restricted Subsidiary in a Restricted Joint Venture; provided
that (i) at the time such Investment is made, no Default or Event of Default
shall have occurred and be continuing (or would result therefrom); (ii) the
aggregate Investment in one or more Restricted Joint Ventures operating the
same Facility does not exceed 15% of Consolidated Net Tangible Assets; provided
that such restriction shall not apply to any Investment in (A) Yangcheng
International Power Generating Company Ltd., or its successors and (B) Tianjin
TEDA-AES Power Co. Ltd. or its successors, and provided, further, that such
restriction shall not apply to a single additional Investment of up to $100
million in the event that the Company does not make either of the Investments
described in clauses (A) and (B); and (iii) any encumbrance or restriction on
the ability of the Person in which the Investment is made to make the payments,
distributions, loans, advances or transfers referred to in clauses (i) through
(iii) under Section 3.05 that would apply immediately following the making of
the Investment could be created or permitted to exist pursuant to clause (d),
(g) or (h) under Section 3.05 or in the written opinion of the President or
Chief Financial Officer of the Company (x) are not materially more restrictive,
taken as a whole, than encumbrances and restrictions customarily accepted (or,
in the absence of any industry custom, reasonably acceptable) in substantially
non-recourse project financings and (y) apply only to the assets of the Person
in whom the Investment is made, the Capital Stock of such Person (or any other
Person that, directly or indirectly owns such Capital Stock as its sole assets)
and the income and proceeds therefrom.
"Restricted Subsidiary" means any Subsidiary of the Company that is not
designated an Unrestricted Subsidiary by the Board of Directors.
"S&P" means Standard and Poor's Corporation and its successors.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
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<PAGE> 24
"Security Agreement" means the security agreement dated as of the date
hereof among the Company, the Trustee and the Collateral Agent.
"Services Agreement" means the Services Agreement dated as of December 29,
1993 between the Company and AES.
"Shareholder Loan" means Indebtedness of a Project Company that is payable
to a holder of Equity Interests in such Project Company.
"Special Proceeds Event" means (i) any Asset Sale of the assets, property
or Capital Stock of any Existing Subsidiary or Existing Joint Venture (or any
other Person that, directly or indirectly, owns such Capital Stock as its sole
assets), (ii) any Designated Financing or (iii) any Restricted Designation
Event.
"Special Proceeds" means, with respect to any Special Proceeds Event, the
Net Available Cash from such Special Proceeds Event; provided that the Net
Available Cash from a Special Proceeds Event relating to an Existing Subsidiary
shall not constitute Special Proceeds if and to the extent that: (A) the
aggregate amount of Net Available Cash from all Special Proceeds Events
excluded from the definition of Special Proceeds under this proviso after the
Issue Date does not exceed $30 million; (B) at the date of such Special
Proceeds Event, the Fixed Charge Coverage Ratio is greater than 2.25:1.0; and
(C) with respect to any Asset Sale, the Facilities owned by each of the
Existing Subsidiaries and each of the Existing Joint Ventures have commenced
commercial operation; and provided further, that the Net Available Cash from
any Special Proceeds Event relating to an Existing Joint Venture shall not
constitute Special Proceeds if and to the extent that (A) at the date thereof,
the Fixed Charge Coverage Ratio is greater than 2.25:1.0 and (B) with respect
to any Asset Sale, the Facilities owned by each of the Existing Subsidiaries
and each of the Existing Joint Ventures have commenced commercial operation.
"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the principal is due and payable,
including pursuant to any mandatory redemption provision (but excluding any
provision providing for the repurchase of such security at the option of the
holder thereof upon the happening of any contingency).
"Subordinated Indebtedness" means any Indebtedness of the Company (whether
outstanding on the Issue Date or thereafter Incurred) which is contractually
subordinated or junior in right of payment to the Notes or any other
Indebtedness of the Company.
"Subsidiary" means, as applied to any Person, any corporation or other
entity of which a majority of the outstanding Voting Shares is, at the time,
directly or indirectly,
19
<PAGE> 25
owned by such Person.
"tax" means any tax, duty, levy, impost, assessment or other governmental
charge of a similar nature (including penalties, interest and any other
liabilities related thereto.
"Taxing Authority" means any government or political subdivision or
territory or possession of any government or any authority or agency therein or
thereof having power to tax.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Section Section
77aaa-77bbbb) as in effect on the date first above written.
"Trustee" means the party named as such above until a successor replaced it
and thereafter means the successor.
"Trust Officer" means any officer of the Trustee within its Corporate Trust
and Agency Group assigned by the Trustee to administer its corporate trust
matters or to whom any corporate trust matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Uniform Commercial Code" means the New York Uniform Commercial Code as in
effect from time to time.
"Unrelated Business" means any business other than the Line of Business.
"Unrestricted Companies" means the Unrestricted Subsidiaries and
Unrestricted Joint Ventures and "Unrestricted Company" means any of them.
"Unrestricted Joint Venture" means: (i) any Eligible Joint Venture that at
the time of determination shall be designated an Unrestricted Joint Venture by
the Board of Directors in the manner provided below; (ii) any Joint Venture of
an Unrestricted Subsidiary; or (iii) any Joint Venture of the Company that is
not an Eligible Joint Venture. The Board of Directors may designate any
Eligible Joint Venture (including any newly acquired or newly formed Eligible
Joint Venture) to be an Unrestricted Joint Venture unless such Eligible Joint
Venture owns any Capital Stock of, or owns or holds any Lien on any property
of, the Company or any other Restricted Joint Venture; provided, that either
(A) the Eligible Joint Venture to be so designated has total assets of $1,000
or less or (B) if such Eligible Joint Venture has assets greater than $1,000,
that such designation would be an investment permitted pursuant to the
provisions under Section 3.03. The Board of Directors may designate any
Unrestricted Joint Venture to be a Restricted Joint Venture; provided, however,
that immediately after giving effect to such designation (x) the Company could
Incur $1.00 of additional Indebtedness pursuant
20
<PAGE> 26
to Subsection 3.04(a) and no Default or Event of Default shall have occurred
and be continuing. Any such designation by the Board of Directors shall be
evidenced to the Trustee by promptly filing with the Trustee a copy of the
Board Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing provisions;
provided, however, that the failure to so file such resolution and/or Officers'
Certificate with the Trustee shall not impair or affect the validity of such
designation.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors in the manner provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds
any Lien on any property of, the Company or any Project Company that is not a
Subsidiary or Joint Venture of the Subsidiary to be so designated; provided,
that either (A) the Subsidiary to be so designated has total assets of $1,000
or less or (B) if such Subsidiary has assets greater than $1,000, that such
designation would be permitted pursuant to Section 3.03. The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary of the Company; provided, however, that immediately after giving
effect to such designation (x) the Company could Incur $1.00 of additional
Indebtedness pursuant to Section 3.04(a) and (y) no Default or Event of Default
shall have occurred and be continuing. Any such designation by the Board of
Directors shall be evidenced to the Trustee by promptly filing with the Trustee
a copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions; provided, however, that the failure to so file such
resolution and/or Officers' Certificate with the Trustee shall not impair or
affect the validity of such designation.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America which, in either case
under clauses (i) or (ii) are not callable or redeemable before the maturity
thereof.
"Voting Shares," with respect to any Person, means the Capital Stock having
the general voting power under ordinary circumstances to vote on the election
of the members of the board of directors or other governing body of such Person
(irrespective of whether or not at the time stock of any other class or classes
shall have or might have voting power by reason of the happening of any
contingency) and, with respect to the
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<PAGE> 27
Company, shall include the Class A Common Stock and the Class B Common Stock
and any other Voting Shares of the Company.
"Wholly Owned Subsidiary" means a Subsidiary (other than an Unrestricted
Subsidiary) all the Capital Stock of which (other than directors' qualifying
shares) is owned by the Company or another Wholly Owned Subsidiary.
SECTION 1.02. Other Definitions.
<TABLE>
<CAPTION>
Term Defined in Section
- ---- ------------------
<S> <C>
"Additional Amounts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.06
"Change of Control Offer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.08
"Change of Control Purchase Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.08
"Event of Default" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.01
"Excess Proceeds" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.12(b)
"Excess Proceeds Offer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.12(b)
"Global Note" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
"Intermediate Holding Company" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.20
"Notice of Default" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.01
"Offer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.12(d)
"Offer Amount" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.12(d)
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"Purchase Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.12(d)
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"Restricted Payment" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.03(a)
"Successor Corporation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.01
"Special Proceeds Offer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.12(d)
</TABLE>
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder or Noteholder;
"indenture to be qualified" means this Indenture;
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"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company. All other terms
used in this Indenture that are defined by the TIA, defined by TIA reference to
another statute or defined by Commission rule under the TIA have the meanings
assigned to them.
SECTION 1.04. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) "generally accepted accounting principles" means, and any
accounting term not otherwise defined has the meaning assigned to it and shall
be construed in accordance with, GAAP;
(c) "or" is not exclusive
(d) words in the singular include the plural, and in the plural
include the singular;
(e) provisions apply to successive events and transactions;
(f) "including" means including, without limitation;
(g) unsecured debt shall not be deemed to be subordinate or junior
to secured debt merely by virtue of its nature as unsecured debt;
(h) the principal amount of any non-interest bearing or other
discount security at any date shall be the principal amount thereof that would
be shown on a balance sheet of the issuer dated such date prepared in
accordance with generally accepted accounting principles and accretion of
principal on such security shall be deemed to be the Incurrence of
Indebtedness; and
(i) the principal amount (if any) of any Preferred Stock shall be
the greatest of (i) the stated value, (ii) the redemption price or (iii) the
liquidation preference of such Preferred Stock.
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ARTICLE 2
THE NOTES
SECTION 2.01. Form and Dating.
The Notes and the Trustee's certificate of authentication, shall be
substantially in the form of Exhibit A annexed hereto, which is part of this
Indenture. The Notes may have notation, legends or endorsements required by
law, stock exchange rule or usage. Each Note shall be dated the date of its
authentication.
The terms and provisions contained in the form of Note annexed hereto as
Exhibit A shall constitute, and are expressly made, a part of this Indenture.
To the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.
The Notes shall be issued initially in the form of a single permanent
global note in fully registered form without interest coupons substantially in
the form of Exhibit A with such legends as may be applicable thereto, only in
denominations of $1,000 and integral multiples thereof (the "Global Note"),
deposited with the Trustee as custodian for the Depositary and registered in the
name of Cede & Co., as nominee of the Depositary, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The Global Note shall
bear such legend as may be required or reasonably requested by the Depositary.
The definitive Notes shall be typed, printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes may
be listed, all as determined by the officers executing such Notes, as evidenced
by their execution of such Notes.
SECTION 2.02. Execution and Authentication.
Two Authorized Officers shall sign the Notes for the Company by manual or
facsimile signature. [The Company's seal shall be reproduced on the Notes.]
If an Authorized Officer whose signature is on a Note no longer holds that
office at the time the Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual signature of an
authorized signatory of the Trustee. The signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.
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The Trustee shall authenticate Notes for original issue up to the aggregate
principal amount stated in paragraph 1 of Exhibit A upon a written order of the
Company signed by two Authorized Officers (except as otherwise provided in
Section 2.07). Such order shall specify the amount of the Notes to be
authenticated and the date on which the original issue of Notes is to be
authenticated. The aggregate principal amount of Notes outstanding at any time
may not exceed that amount except as provided in Section 2.07.
The Trustee shall initially act as authenticating agent and may
subsequently appoint another Person acceptable to the Company as authenticating
agent to authenticate Notes. Unless limited by the terms of such appointment,
an authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as
an Agent to deal with the Company or an Affiliate of the Company. Provided
that the authenticating agent has entered into an agreement with the Company
concerning authentication agent's duties, the Trustee shall not be liable for
any act or any failure of the authenticating agent to perform any duty either
required herein or authorized herein to be performed by such person in
accordance with this Indenture.
Typographical and other minor errors or defects in any such reproduction of
the seal or any such signature shall not affect the validity or enforceability
of any Note which has been duly authenticated and delivered by the Trustee.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may be presented
for registration of transfer or for exchange ("Registrar") and an office or
agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional
paying agent and the term "Registrar" includes any co-registrar.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture. The
agreement shall implement the provisions of this Indenture that relate to such
agent. The Company shall promptly notify the Trustee of the name and address
of any such agent and change in the address of such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such
and shall be entitled to appropriate compensation therefor pursuant to Section
6.07. The Company or any Subsidiary or Affiliate of the Company may act as
Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying Agent.
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SECTION 2.04. Paying Agent to Hold Money in Trust.
On or prior to 11:00 a.m., eastern standard time, on each due date of the
principal and interest on any Note (including any redemption date fixed under
the terms of such Note or this Indenture) the Company shall deposit with the
Paying Agent a sum of money, in immediately available funds, sufficient to pay
such principal and interest in funds available when such becomes due. The
Company shall require each Paying Agent (other than the Trustee) to agree in
writing that the Paying Agent shall hold in trust for the benefit of
Noteholders or the Trustee all money held by the Paying Agent for the payment
of principal of or interest on the Notes (whether such money has been paid to
it by the Company or any other obligor on the Notes) and shall notify the
Trustee of any default by the Company (or any other obligor on the Notes) in
making any such payment. If the Company or a Subsidiary or an affiliate of the
Company acts as Paying Agent, it shall segregate the money held by it as Paying
Agent and hold it as a separate trust fund for the benefit of the Noteholders.
If the Company defaults in its obligation to deposit funds for the payment of
principal and interest the Trustee may, during the continuation of such
default, require a Paying Agent to pay all money held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee and to account for any funds disbursed by it. Upon doing so,
the Paying Agent (other than the Company or a Subsidiary or Affiliate of the
Company) shall have no further liability for the money delivered to the
Trustee.
SECTION 2.05. Noteholder Lists.
The Trustee shall preserve in as current a form as reasonably practicable
the most recent list available to it of the names and addresses of Noteholders.
If the Trustee is not the Registrar, the Company shall furnish to the Trustee
at least five Business Days before each Interest Payment Date and at such other
times as the Trustee may request in writing a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of the
Noteholders and the Company shall otherwise comply with TIA Section 312(a).
SECTION 2.06. Transfer and Exchange; Definitive Note.
(a) The Notes shall be transferable only upon the surrender of a
Note for registration of transfer. When a Note is presented to the Registrar
or a co-registrar with a request to register a transfer, the Registrar shall
register the transfer as requested if the requirements of Section 8-401(1) of
the Uniform Commercial Code are met (and the Registrar shall be entitled to
assume such requirements have been met unless it receives written notice to the
contrary) and, if so required by the Trustee or the Company, if the Note
presented is accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Company, duly executed by the registered
owner or by his or her
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attorney duly authorized in writing. When Notes are presented to the Registrar
or a co-registrar with a request to exchange them for an equal principal amount
of Notes of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit registration of
transfers and exchanges, the Company shall execute and the Trustee shall
authenticate Notes at the Registrar's or co-registrar's request. No service
charge shall be made for any registration of transfer or exchange of the Notes,
but the Company may require payment of a sum sufficient to cover any transfer
tax or similar governmental charge payable in connection therewith (other than
any such transfer taxes or similar governmental charge payable upon exchange
pursuant to Section 2.10 or 8.05 of this Indenture). The Company shall not be
required to make and the Registrar need not register transfers or exchanges of
Notes selected for redemption (except, in the case of Notes to be redeemed in
part, the portion thereof not to be redeemed) or for a period of 15 days before
a selection of Notes to be redeemed or 15 days before an interest payment date.
(b) Prior to the due presentation for registration of transfer of any
Note, the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Note is registered
as the absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Note and for all other purposes whatsoever,
whether or not such Note is overdue, and none of the Company, the Trustee, the
Paying Agent, the Registrar or any co-registrar shall be affected by notice to
the contrary.
(c) Notwithstanding any other provisions of this Section 2.06, unless
and until it is exchanged in whole or in part for Notes in definitive
registered form, the Global Note representing all or a portion of the Notes may
not be transferred except as a whole by the Depositary to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(d) If the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for the Global Notes or if at any time the
Depositary shall no longer be registered under the next sentence of this
paragraph, the Company shall appoint a successor Depositary with respect to the
Notes. Each Depositary appointed pursuant to this Section 2.06 must, at the
time of its appointment and at all times while it serves as Depositary, be a
clearing agency registered under the Exchange Act and any other applicable
statute or regulation. The Company will execute, and the Trustee will
authenticate and deliver upon a written order of the Company signed by two
Authorized Officers, Notes in definitive registered form in any authorized
denominations representing such Notes in exchange for the Global Note if (i)
the Depositary notifies the Company that it is unwilling or unable to continue
as Depositary for the Global Note or if at any time the Depositary ceases to be
a clearing agency registered under the Exchange
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Act at any time when it is required to be and, in either case, a successor
Depositary for the Notes is not appointed by the Company within 90 days after
the Company receives such notice or becomes aware that the Depositary is no
longer so registered, (ii) the Company determines in accordance with the next
paragraph of this subsection (d) that the Global Note shall be exchanged or
exchangeable for Notes in definitive registered form or (iii) an Event of
Default has occurred and is continuing.
The Company may at any time and in its sole discretion determine that the
Notes shall no longer be represented by the Global Note. In such event the
Company will execute, and the Trustee will authenticate and deliver upon a
written order of the Company signed by two Authorized Officers, Notes in
definitive registered form in any authorized denominations representing such
Notes in exchange for such Global Note.
(e) Upon the exchange of the Global Note for Notes in definitive
registered form without coupons, in authorized denominations, such Global Note
shall be canceled by the Trustee. Notes in definitive registered form issued
in exchange for the Global Note pursuant to this Section 2.06 shall be
registered in such names and in such authorized denominations as the Depositary
for the Global Note pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall
deliver such Notes to or as directed by the Persons in whose names such Notes
are so registered.
All Notes issued upon any transfer or exchange pursuant to the terms of
this Indenture will evidence the same debt and will be entitled to the same
benefits under this Indenture as the Notes surrendered upon such transfer or
exchange.
SECTION 2.07. Replacement Notes.
If a mutilated security is surrendered to the Registrar or if the Holder of
a Note claims that the Note has been lost, destroyed or wrongfully taken and
the Holder furnishes to the Company and the Trustee evidence to their
satisfaction of such loss, destruction or wrongful taking, the Company shall
issue and the Trustee shall, in the absence of notice to the Company or the
Trustee that such Note has been acquired by a bona fide purchaser, authenticate
a replacement Note if the requirements of Section 8-405 of the Uniform
Commercial Code are met (and the Registrar shall be entitled to assume such
requirements have been met unless it receives written notice to the contrary)
and if there is delivered to the Company and the Trustee such security or
indemnity as may be required to save each of them harmless, satisfactory to the
Company or the Trustee, as the case may be. The Company and the Trustee may
charge the Holder for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and shall be
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entitled to the benefits of (but shall be subject to all the limitations of
rights set forth in) this Indenture.
SECTION 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for
cancellation, and those described in this section as not outstanding.
If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding
unless the Trustee and the Company receive proof satisfactory to them that the
replaced Note is held by a bona fide purchaser.
If all the principal and interest on any Notes are considered paid under
Section 3.01, such Notes cease to be outstanding under this Indenture and
interest on such Notes shall cease to accrue.
If the Paying Agent (other than the Company or a Subsidiary or an Affiliate
of the Company) holds in accordance with this Indenture on a redemption date or
maturity date money sufficient to pay all principal and interest due on that
date then on and after that date such Notes cease to be outstanding and
interest on them ceases to accrue (unless there shall be a default in such
payment).
If a Note is called for redemption, the Company and the Trustee need not
treat the Note as outstanding in determining whether Holders of the required
principal amount of Notes have concurred in any direction, waiver or consent.
Subject to Section 2.09, a Note does not cease to be outstanding because
the Company or an Affiliate thereof holds the Note.
SECTION 2.09. Determination of Holders' Action.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, amendment, waiver or consent, Notes
owned by or pledged to the Company, any other obligor upon the Notes or any
Affiliate of the Company, or such other obligor shall be disregarded and deemed
not to be outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes which the Trustee knows are so owned or pledged shall be so
disregarded.
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SECTION 2.10. Temporary Notes.
Until definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes. Without unreasonable delay,
the Company shall prepare and the Trustee, upon the written order of the
Company signed by two Authorized Officers, shall authenticate definitive Notes
in exchange for temporary Notes. Until such exchange, temporary Notes shall be
entitled to the same rights, benefits and privileges as definitive Notes.
SECTION 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee shall cancel all Notes surrendered for registration of transfer,
exchange, payment or cancellation and shall destroy the same or otherwise
dispose of canceled Notes as the Company directors by written order signed by
two Authorized Officers. The Company may not issue new Notes to replace Notes
that it has paid or delivered to the Trustee for cancellation.
SECTION 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall pay
defaulted interest, plus any interest payable on the defaulted interest to the
extent permitted by law, in any lawful manner. The Company may pay the
defaulted interest to the Persons who are Noteholders on a subsequent special
record date which date shall be at least five Business Days prior to the
payment date. The Company shall fix the special record date and payment date.
At least 15 days before the special record date, the Company (or the Trustee,
in the name of and at the expense of the Company) shall mail to Noteholders a
notice that states the special record date, payment date and amount of interest
to be paid.
ARTICLE 3
COVENANTS
SECTION 3.01. Payment of Notes.
(a) The Company shall pay the principal of and interest on the Notes
on the dates and in the manner provided in the Notes. The Company shall pay
interest on overdue principal at the rate borne by the Notes; it shall pay
interest on overdue installments of interest at the rate borne by the Notes to
the extent lawful. Principal and
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interest shall be considered paid on the date due (including a redemption date)
if the Trustee or the Paying Agent (other than the Company or a Subsidiary or
an Affiliate of the Company) has received from or on behalf of the Company on
or prior to 11:00 a.m., eastern standard time, on that date, in immediately
available funds, money sufficient to pay all principal and interest then due.
(b) At least five Business Days prior to the first interest payment
date and, if there has been any change with respect to the matters set forth in
the below-mentioned certificate, at least five Business Days prior to each
interest payment date thereafter, the Company shall furnish the Trustee with an
Officers' Certificate instructing the Trustee as to any circumstances in which
payments of principal of or interest on the Notes due on such date shall be
subject to deduction or withholding for or on account of any taxes described in
Section 3.06 and the rate of any such deduction or withholding. If any such
deduction or withholding shall be required and if the Company therefore becomes
liable to pay Additional Amounts, if any, pursuant to Section 3.06, then, at
least five Business Days prior to each interest payment date, the Company will
furnish the Trustee with a certificate which specifies the amount required to
be withheld on such payment to Holders of the Notes and the Additional Amounts,
if any, due to Holders of the Notes, and will pay to the Trustee such
Additional Amounts, if any, as shall be required to be paid to such Holders.
SECTION 3.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency where Notes may be surrendered for registration of
transfer or exchange or for presentation for payment and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may
be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 11.02 of this Indenture.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York, for such purposes. The Company will give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
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The Company hereby initially designates the office of Bankers Trust Company
in the Borough of Manhattan, the City of New York, as such office of the
Company in accordance with Section 2.03.
SECTION 3.03. Limitation on Restricted Payments.
(a) So long as any of the Notes are outstanding, the Company shall
not, and shall not permit any Project Company to, directly or indirectly, (i)
declare or pay (either in cash or property) any dividend on or make any
distribution or similar payment of any sort in respect of its Equity Interests
(including any payment in connection with any merger or consolidation involving
the Company) to the direct or indirect holders of its Equity Interests (other
than dividends or distributions payable solely in its Non-Convertible Capital
Stock or rights to acquire its Non-Convertible Capital Stock and dividends or
distributions by a Project Company that are paid to the Company or a Wholly
Owned Subsidiary and to the other holders of Equity Interests in such Project
Company (A) in accordance with the joint venture contract, articles of
association or other constituent document governing such Project Company or (B)
as permitted by applicable law), (ii) purchase, redeem, defease or otherwise
acquire or retire for value any Equity Interests of the Company or AES, or,
with respect to the Company, exercise any option to exchange any Equity
Interests that by their terms are exchangeable solely at the option of the
Company (other than into Capital Stock of the Company which is neither
Exchangeable Stock nor Redeemable Stock), (iii) purchase, repurchase, redeem,
defease or otherwise acquire or retire for value, prior to scheduled maturity
or scheduled repayment thereof or scheduled sinking fund payment thereon, any
Subordinated Indebtedness or (iv) make any Investment, other than a Permitted
Investment (each such payment described in clauses (i)-(iv) of this paragraph,
a "Restricted Payment"), unless at the time of and after giving effect to the
proposed Restricted Payment:
(1) no Default or Event of Default shall have occurred and be
continuing (or would result therefrom);
(2) the Company would be permitted to Incur an additional $1.00 of
Indebtedness pursuant to the provisions of Section 3.04(a); and
(3) the aggregate amount of all such Restricted Payments subsequent to
the Issue Date shall not exceed the sum of
(A) 50% of aggregate Consolidated Net Income accrued during
the period (treated as one accounting period) from
December 1, 1996 to the end of the most recent fiscal
quarter for which financial statements are available (or
if such Consolidated Net Income is a deficit, minus 100%
of such deficit);
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(B) the aggregate Net Cash Proceeds received by
the Company after the Issue Date from the sale of Equity
Interests (other than Redeemable Stock or Exchangeable
Stock) of the Company to any person other than the
Company, any of its Subsidiaries or an employee stock
ownership plan;
(C) the amount by which the principal amount of,
and any accrued interest on, Indebtedness of the Company
or its Restricted Subsidiaries (other than Shareholder
Loans) is reduced on the Company's Consolidated balance
sheet upon the conversion or exchange (other than by a
Subsidiary) subsequent to the Issue Date of any
Indebtedness of the Company or any Restricted Subsidiary
converted or exchanged for Capital Stock (other than
Redeemable Stock or Exchangeable Stock) of the Company
(less the amount of any cash, or the value of any other
property, distributed by the Company or any such
Restricted Subsidiary upon such conversion or exchange);
and
(D) an amount equal to the net reduction in
Investments after the Issue Date in Unrestricted Companies
resulting from payments of interest on Indebtedness,
dividends, repayments of loans or advances, or other
transfers of assets, in each case to the Company or any
Project Company from Unrestricted Companies or from
redesignations of Unrestricted Companies as Project
Companies (valued in each case as provided in the
definition of "Investments"), not to exceed in the case of
any Unrestricted Company the amount of Investments
previously made by the Company or any Project Company in
such Unrestricted Company.
(b) The failure to satisfy the conditions set forth in clauses
(2) and (3) of Subsection 3.03(a) shall not prohibit any of the following as
long as the condition set forth in clause (1) of Subsection 3.03(a) is
satisfied (except as set forth below):
(i) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend
would have complied with Subsection 3.03(a); provided that, solely
for purposes of this clause (i), it shall not be necessary to
satisfy the condition set forth in clause (1) of Subsection
3.03(a) at the date of payment if such clause is satisfied at the
date of declaration;
(ii) any purchase, redemption, defeasance, or other
acquisition or retirement for value of Capital Stock of the
Company or Subordinated Indebtedness made by exchange for, or out
of the proceeds of the substantially concurrent sale of, Capital
Stock of the Company (other than Redeemable Stock
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<PAGE> 39
or Exchangeable Stock and other than stock issued or sold to a
Subsidiary or to an employee stock ownership plan), provided, that
such purchase, redemption, defeasance or other acquisition or
retirement shall not be included in the calculation of Restricted
Payments made for purposes of clause (3) of Subsection 3.03(a) and
provided, further, that the Net Cash Proceeds from such sale shall
be excluded from sub-clause B of clause (3) of Subsection 3.03(a);
(iii) any purchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Indebtedness
made by exchange for, or out of the proceeds of the substantially
concurrent Incurrence of for cash (other than to a Subsidiary),
new Indebtedness of the Company, provided, however, that (A) such
new Indebtedness shall be contractually subordinated in right of
payment to the Notes at least to the same extent as the
Indebtedness being so redeemed, repurchased, defeased, acquired or
retired, (B) such new Indebtedness has a Stated Maturity either
(1) no earlier than the Stated Maturity of the Indebtedness
redeemed, repurchased, defeased, acquired or retired or (2) after
the Stated Maturity of the Notes and (C) such Indebtedness has an
Average Life equal to or greater than the Average Life of the
Indebtedness redeemed, repurchased, defeased, acquired or retired,
and provided further, that such purchase, redemption, defeasance
or other acquisition or retirement shall not be included in the
calculation of Restricted Payments made for purposes of clause (3)
of Subsection 3.03(a); and
(iv) any purchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Indebtedness
upon a Change of Control or an Asset Sale to the extent required
by this Indenture or other agreement pursuant to which such
Subordinated Indebtedness was issued, but only if (A) in the case
of a Change of Control, the Company has made an offer to
repurchase the Notes as described under Section 3.08 or (B) in the
case of an Asset Sale, the Company or the applicable Project
Company, as the case may be, has applied the Net Available Cash
from such Asset Sale in accordance with the provisions of Section
3.12; and
(v) Restricted Payments not otherwise permitted by
the foregoing provisions in an aggregate amount not in excess of
$10 million.
SECTION 3.04. Limitation on Incurrence of Indebtedness.
(a) The Company shall not, and shall not permit any Project
Company to, directly or indirectly, Incur any Indebtedness, except that the
Company may Incur Indebtedness if, after giving effect thereto, the Fixed
Charge Coverage Ratio would be greater than (i) 1.75:1.0 through November 30,
1998, (ii) 2.00:1.0 from December 1,
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1998 through November 30, 2001, and (iii) 2.25:1.0 thereafter.
(b) Notwithstanding the foregoing, this section shall not limit the
ability of the Company or any Project Company to Incur the following
Indebtedness:
(i) Indebtedness under the Notes and this Indenture;
(ii) Refinancing Indebtedness;
(iii) Indebtedness of the Company which is owned to and held by
a Wholly Owned Subsidiary and Indebtedness of a Project Company which is
owed to and held by the Company or a Wholly Owned Subsidiary, provided,
however, that any subsequent issuance or transfer of any Capital Stock
which results in any such Wholly Owned Subsidiary ceasing to be a Wholly
Owned Subsidiary or any transfer of such Indebtedness (other than to the
Company or a Wholly Owned Subsidiary) shall be deemed, in each case, to
constitute the Incurrence of such Indebtedness by the Company or by a
Project Company, as the case may be;
(iv) Acquired Indebtedness that is Non-Recourse Debt;
(v) Indebtedness of the Company or a Project Company
outstanding on the Issue Date;
(vi) Indebtedness under any Currency Agreement or Interest Rate
Agreement in each case entered into in the ordinary course of the financial
management of the Company and the Project Companies and not for speculative
purposes; provided that, in the case of any Currency Agreement, such
Currency Agreement does not increase the Indebtedness of the obligor
outstanding at any time other than as a result of fluctuations in foreign
currency exchange rates or by reason of fees, indemnities and compensation
payable thereunder;
(vii) Indebtedness incurred in connection with a purchase of the
Notes as required in connection with a Change of Control Triggering Event;
provided that the aggregate principal amount of such indebtedness does not
exceed 101% of the aggregate principal amount of the Notes purchased
pursuant to such Change of Control Triggering Event (plus the amount of
reasonable fees and expenses, including underwriting discounts and
commissions, incurred by the Company in connection with obtaining such
Indebtedness) and that such Indebtedness does not mature prior to the
Stated Maturity of the Notes so purchased;
(viii) Indebtedness referred to in clause (viii) of the
definition of Permitted Investments;
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(ix) Non-Recourse Debt of a Project Company (other than any
Existing Subsidiary), the proceeds of which are used to acquire, develop,
improve, construct or provide working capital for a Facility of such
Project Company;
(x) Shareholder Loans to the extent that the aggregate
principal amount of Shareholder Loans of a Project Company is not greater
than an amount equal to the principal amount of Shareholder Loans of such
Project Company payable to the Company or a Wholly Owned Subsidiary divided
by the Company's percentage ownership of the Capital Stock of such Project
Company;
(xi) Non-Recourse Debt of any Existing Subsidiary Incurred to
pay for construction cost overruns; provided that the aggregate principal
amount of all such Non-Recourse Debt incurred under this clause (xi) shall
not exceed $15 million;
(xii) Non-Recourse Debt of any Existing Subsidiary Incurred to
provide for working capital; provided that the aggregate principal amount
outstanding at any time of all such Non-Recourse Debt under this clause
(xii) shall not exceed $10 million; and
(xiii) other Indebtedness Incurred by the Company or any Project
Company (other than an Existing Subsidiary) in an aggregate principal
amount outstanding at any time of not more than 5% of Consolidated Net
Worth.
(c) Notwithstanding Sections 3.04(a) and (b), the Company shall not
Incur any Indebtedness if the proceeds thereof are used, directly or indirectly,
to repay, prepay, redeem, defease, retire, refund or refinance any Subordinated
Indebtedness unless such repayment, prepayment, redemption, defeasance,
retirement, refunding or refinancing is not prohibited by Section 3.03 or unless
such Indebtedness shall be contractually subordinated to the Notes at least to
the same extent as such Subordinated Indebtedness.
SECTION 3.05. Limitation on Payment Restrictions Affecting Project
Companies.
The Company shall not, and shall not permit any Project Company to, create
or otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Project Company to (i) pay
dividends to or make any other distributions on its Capital Stock, or pay any
Indebtedness or other obligations owed to the Company or any other Project
Company, (ii) make any loans or advances to the Company or any Project Company
or (iii) transfer any of its property or assets to the Company or any other
Project Company; provided, however, that the foregoing shall not apply to:
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(a) any encumbrance or restriction existing pursuant to this
Indenture or any other agreement or instrument as in effect or entered into on
the Issue Date;
(b) any encumbrance or restriction with respect to any Person or the
assets of such Person acquired by the Company or any Project Company and
existing at the time of such acquisition; provided, however, that such
encumbrance or restriction was not Incurred in connection with or in
contemplation of such Project Company becoming a Project Company;
(c) any encumbrance or restriction pursuant to an agreement
effecting a refinancing of Indebtedness referred to in clause (a) or (b) above
or contained in any amendment or modification with respect to such
Indebtedness; provided, however, that the encumbrances and restrictions
contained in any such agreement, amendment or modification are no less
favorable in any material respect with respect to the matters referred to in
clauses (i), (ii) and (iii) above than the encumbrances and restrictions with
respect to the Indebtedness being refinanced, amended or modified;
(d) in the case of clause (iii) above, customary non-assignment
provisions of (A) any leases governing a leasehold interest or (B) any supply,
license or other agreement entered into in the ordinary course of business of
the Company or any Project Company;
(e) any restrictions with respect to a Project Company imposed
pursuant to an agreement entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of such Project Company
pending the closing of such sale or disposition;
(f) any encumbrances or restrictions imposed pursuant to the terms
of Non-Recourse Debt incurred pursuant to Section 3.04(b)(ix), provided that
such encumbrances or restrictions, in the written opinion of the President or
Chief Financial Officer of the Company, (x) are required in order to obtain
such financing, (y) are not materially more restrictive, taken as a whole, than
encumbrances and restrictions customarily accepted (or, in the absence of any
industry custom, reasonably acceptable), in substantially non-recourse project
financings and (z) apply only to the assets of the Project Company that has
Incurred such Non-Recourse Debt, the Capital Stock of such Person (or any other
Person that, directly or indirectly, owns such Capital Stock as its sole
assets) and the income and proceeds therefrom;
(g) any encumbrance or restriction existing by reason of applicable
law; and
(h) any restriction under a joint venture, shareholders' or similar
agreement to pay dividends or make other distributions, so long as there is a
contemporaneous agreement providing for the payment of dividends or the making
of distributions
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according to a schedule or calculation notwithstanding such restriction.
Nothing contained in this Section 3.05 shall prevent the Company or any
Project Company from (1) creating, incurring, assuming or suffering to exist
any Liens otherwise permitted in Section 3.07 or (2) restricting the sale or
other disposition of property or assets of the Company or any Project Company
that secure Indebtedness.
SECTION 3.06. Payment of Additional Amounts.
All payments of principal and interest in respect of each Note shall be
made free and clear of, and without withholding or deduction for, any taxes,
duties, assessments or governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by or within Bermuda or any other jurisdiction
in which the Company is organized or any authority therein or thereof having
power to tax or from which any payment is made with respect to the Notes,
unless such withholding or deduction is required by law or by regulation or
governmental policy having the force of law. In the event that any such
withholding or deduction in respect of principal or interest is so required,
the Company shall pay such additional amounts ("Additional Amounts") as will
result in receipt by each Holder of any Note of such amounts as would have been
received by such Holder or the beneficial owner with respect to such Note had
no such withholding or deduction been required, except that no Additional
Amounts shall be payable:
(a) for or on account of:
(i) any tax, duty, assessment or other governmental charge
that would not have been imposed but for
(A) the existence of any present or former connection
between such Holder or the beneficial owner of such Note and
Bermuda or such other jurisdiction in which the Company is
organized, as the case may be, other than merely holding such
Note, including, without limitation, such Holder or the beneficial
owner of such Note being or having been a national, domiciliary or
resident of or treated as a resident thereof or being or having
been present or engaged in a trade or business therein or having
or having had a permanent establishment therein;
(B) presentation of such Note (where presentation is
required) more than thirty (30) days after the date on which the
payment in respect of such Note became due and payable or provided
for, whichever is later, except to the extent that such Holder
would have been entitled to such Additional Amounts if it had
presented such Note for payment on any day within such period of
thirty (30) days; or
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(C) the presentation of such Note for payment in
Bermuda or any political subdivision thereof or therein, unless
such Note could not have been presented for payment elsewhere;
(ii) any estate, inheritance, gift, sale, transfer, personal
property or similar tax, assessment or other governmental charge;
(iii) any tax, assessment or other governmental charge that is
imposed or withheld by reason of the failure of such Holder or the
beneficial owner of such Note to comply with a request by the Company
addressed to such Holder (A) to provide information concerning the
nationality, residence or identity of such Holder or such beneficial owner
or (B) to make any declaration or other similar claim or satisfy any
information or reporting requirement, which, in the case of (A) or (B), is
required or imposed by a statute, treaty, regulation or administrative
practice of the taxing jurisdiction as a precondition to exemption from all
or part of such tax, assessment or other governmental charge;
(iv) any tax, duty, assessment or governmental charge which is
payable other than by withholding or deduction from payments with
respect to the Notes; or
(v) any combination of items (1), (2), (3) and (4);
(b) with respect to any payment of the principal of or interest on
such Note to such Holder (including a fiduciary or partnership) to the extent
that the beneficial owner of such Note would not have been entitled to such
Additional Amounts had it been the Holder of the Note.
Whenever there is mentioned, in any context, the payment of principal or
interest in respect of any Note or the net proceeds received on the sale or
exchange of any Note, such mention shall be deemed to include the payment of
Additional Amounts provided for in this Indenture to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof
pursuant to this Indenture.
SECTION 3.07. Limitation on Liens.
The Company shall not, and shall not permit any Project Company to directly
or indirectly, incur or permit to exist any Lien of any nature whatsoever on
any of its properties (including, without limitation, Capital Stock), whether
owned at the date of such Indenture or thereafter acquired, unless
contemporaneously therewith or prior thereto the Notes are equally and ratably
secured other than:
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(a) pledges or deposits made by such Person under workers'
compensation, unemployment insurance laws or similar legislation, or good faith
deposits in connection with bids, tenders, contracts (other than for payment of
Indebtedness) or leases to which such Person is a party, or deposits to secure
statutory or regulatory obligations of such Person or deposits of cash or
United States government bonds to secure surety, appeal or performance bonds to
which such Person is a party, or deposits as security for contested taxes or
import duties or for the payment of rent, in each case Incurred in the ordinary
course of business;
(b) Liens imposed by law such as carriers', warehousemen's and
mechanics' Liens, in each case, arising in the ordinary course of business and
with respect to amounts not yet due or being contested in good faith by
appropriate legal proceedings promptly instituted and diligently conducted and
for which a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made; or other Liens arising
out of judgments or awards against such Person with respect to which such
Person shall then be diligently prosecuting appeal or other proceedings for
review;
(c) Liens for property taxes not yet subject to penalties for
non-payment or which are being contested in good faith and for which
appropriate provision as shall be required in conformity with GAAP, if any,
shall have been made;
(d) Liens in favor of issuers or surety bonds or letters of credit
issued pursuant to the request of and for the account of such Person in the
ordinary course of its business; provided, however, that such letters of credit
may not constitute Indebtedness;
(e) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, rights of way, sewers, electric
lines, telegraph and telephone lines and other similar purposes, or zoning or
other restrictions as to the use of real properties or liens incidental to the
conduct of the business of such Person or to the ownership of its properties
which were not Incurred in connection with Indebtedness or other extensions of
credit and which do not in the aggregate materially adversely affect the value
of said properties or materially impair their use in the operation of the
business of such Person;
(f) Liens securing Indebtedness Incurred to finance the construction
or purchase of, or repairs, improvements or additions to, property; provided,
however, that the Lien may not extend to any other property owned by the
Company or a Project Company and the Indebtedness secured by the Lien may not
be issued more than 270 days after the later of the acquisitions, completion of
construction, repair, improvement, addition or commencement of full operation
of the property subject to the Lien;
(g) Liens existing on the Issue Date;
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(h) Liens on property or shares of stock of a Person at the time
such Person becomes a Project Company, provided, however, that any such Lien
may not extend to any other property owned by the Company or any Project
Company;
(i) Liens on property at the time the Company or a Project Company
acquires the property, including any acquisitions by means of a merger or
consolidation with or into the Company or a Project Company; provided, however,
that such Liens are not incurred in connection with, or in contemplation of,
such merger or consolidation; and provided, further, that the Lien may not
extend to any other property owned by the Company or any Project Company;
(j) Liens securing Indebtedness or other obligations of a Project
Company owing to the Company or a Wholly Owned Subsidiary;
(k) Liens incurred by a Person other than the Company or a Project
Company on assets that are the subject of a Capitalized Lease Obligation to
which the Company or a Project Company is a party; provided, however, that any
such Lien may not secure Indebtedness of the Company or Project Company (except
by virtue of clause (viii) of the definition of "Indebtedness") and may not
extend to any other property owned by the Company or any Project Company;
(l) Liens Incurred by a Project Company to secure Non-Recourse Debt
Incurred pursuant to paragraphs (ix), (xi) or (xii) of Section 3.04(b),
provided that such Liens (x) are required in order to obtain such financing,
(y) are not materially more restrictive, taken as a whole, than Liens
customarily accepted (or, in the absence of any industry custom, reasonably
acceptable), in substantially non-recourse project financings and (z) apply
only to the assets of the Person that has incurred such Non-Recourse Debt, the
Capital Stock of such Person (or any other Person that, directly or indirectly,
owns such Capital Stock as its sole assets) and the income and proceeds
therefrom;
(m) Liens not in respect of Indebtedness consisting of the interest
of the lessor under any lease Incurred in the ordinary course of business and
not otherwise prohibited by this Indenture;
(n) Liens which constitute banker's liens, rights of set-off or
similar rights and remedies as to deposit accounts or other funds maintained
with any bank or other financial institution, whether arising by operation of
law or pursuant to contract;
(o) Liens Incurred pursuant to the Security Agreement; and
(p) Liens to secure any refinancing, refunding, extension, renewal
or replacement (or successive refinancings, refundings, extensions, renewals or
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replacements) as a whole, or in part, of any Indebtedness secured by any Lien
referred to in the foregoing clauses (f), (g), (h) and (i), provided, however,
that (x) such new Lien shall be limited to all or part of the same property
that secured the original Lien (plus improvements on such property) and (y) the
Indebtedness secured by such Lien at such time is not increased (other than by
an amount necessary to pay fees and expenses, including premiums, related to
the refinancing, refunding, extension, renewal or replacement of such
Indebtedness).
SECTION 3.08. Change of Control.
In the event of a Change of Control Triggering Event, the Company shall
make an offer to purchase (the "Change of Control Offer") the Notes then
outstanding at a purchase price of not less than 101% of the principal amount
(excluding any premium) thereof plus accrued and unpaid interest to the Change
of Control Purchase Date (as defined below) on the terms set forth in this
section. The date on which the Company shall purchase the Notes pursuant to
this section (the "Change of Control Purchase Date") shall be no earlier than
30 days, nor later than 60 days, after the notice referred to below is mailed,
unless a longer period shall be required by law. The Company shall notify the
Trustee in writing promptly after any Change of Control Triggering Event of the
Company's obligation to offer to purchase all of the Notes.
Notice of a Change of Control Offer shall be mailed by the Company to the
Holders of the Notes at their last registered address (with a copy to the
Trustee and the Paying Agent) within thirty (30) days after a Change of Control
Triggering Event has occurred. The Change of Control Offer shall remain open
from the time of mailing until a date not more than five (5) Business Days
before the Change of Control Purchase Date. The notice shall contain all
instructions and materials necessary to enable such Holders to tender (in whole
or in part) the Notes pursuant to the Change of Control Offer. The notice,
which shall govern the terms of the Change of Control Offer, shall state:
(a) that the Change of Control Offer is being made pursuant to this
section;
(b) the purchase price and the Change of Control Purchase Date;
(c) that any Note not surrendered or accepted for payment will continue
to accrue interest;
(d) that any Note accepted for payment pursuant to the Change of Control
Offer shall cease to accrue interest after the Change of Control Purchase Date;
(e) that any Holder electing to have a Note purchased (in whole or in
part) pursuant to a Change of Control Offer will be required to surrender the
Note, with the
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form entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, to the Paying Agent at the address specified in the notice (or
otherwise make effective delivery of the Note pursuant to book-entry procedures
and the related rules of the applicable depositories) at least five (5)
Business Days before the Change of Control Purchase Date; and
(f) that any Holder will be entitled to withdraw his or her election if
the Paying Agent receives, not later than three (3) Business Days prior to the
Change of Control Purchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the Note
the Holder delivered for purchase and a statement that such Holder is
withdrawing his or her election to have the Note purchased.
On the Change of Control Purchase Date, the Company shall (i) accept for
payment the Notes, or portions thereof, surrendered and properly tendered, and
not withdrawn, pursuant to the Change of Control Offer, (ii) deposit with the
Paying Agent, no later than 11:00 a.m. eastern standard time, money, in
immediately available funds, sufficient to pay the purchase price of all Notes
or portions thereof so accepted and (iii) deliver to the Trustee, no later than
11:00 a.m. eastern standard time, Notes so accepted together with an Officers'
Certificate stating that such Notes have been accepted for payment by the
Company. The Paying Agent shall promptly mail or deliver to Holders of Notes
so accepted payment in an amount equal to the purchase price. Holders whose
Notes are purchased only in part will be issued new Notes equal in principal
amount to the unpurchased portion of the Notes surrendered.
The Company shall comply, to the extent applicable, with the requirements
of Section 14(e) of the Exchange Act and any other securities laws or
regulations in connection with the repurchase of Notes pursuant to this
section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this section by virtue thereof.
SECTION 3.09. Compliance Certificate.
(a) The Company shall, within 120 days after the close of each fiscal
year following the issuance of the Notes, file with the Trustee an Officer's
Certificate, covering the period from the date of issuance of the Notes to the
end of the fiscal year in which the Notes were issued, in the case of the first
such certificate, and covering the preceding fiscal year in the case of each
subsequent certificate, and stating whether or not, to the knowledge of each
such executing Officer, the Company has complied with and performed and
fulfilled all covenants on its part contained in this Indenture and is not in
default in the performance or observance of any of the terms or provisions
contained in this Indenture, and, if any such signer has obtained knowledge of
any default by the
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Company in the performance, observance or fulfillment of any such covenant,
term or provision specifying each such default and the nature thereof. For the
purpose of this Section 3.09, compliance shall be determined without regard to
any grace period or requirement of notice provided pursuant to the terms of
this Indenture.
(b) The Officers' Certificate described in Section 3.11(b) shall also set
forth (i) a calculation of the Fixed Charge Coverage Ratio as the last day of
the preceding fiscal year and (ii) a calculation of the amount required to be
maintained by the Company pursuant to Section 3.13 as of the last day of the
preceding fiscal year, setting forth in each such case each component of the
calculation thereof.
SECTION 3.10. Commission Reports.
The Company shall deliver to the Trustee and to the Holders, within 30 days
after the filing with the Commission, copies of the annual and quarterly
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may by rules and regulations
prescribe) which the Company is required to file with the Commission pursuant
to Section 13 or 15(d) of the Exchange Act. In the event the Company is at any
time no longer subject to the reporting requirements of Section 13 or 15(d) of
the Exchange Act or otherwise report on an annual and quarterly basis on forms
provided for such annual and quarterly reporting pursuant to rules and
regulations promulgated by the Commission, it shall, for so long as the Notes
remain outstanding, file with the Trustee and the Commission and mail to each
Holder at such Holder's registered address, within 30 days after the Company
would have been required to file such documents with the Commission, copies of
the annual audited financial statements and quarterly unaudited financial
statements, along in each case with a discussion and analysis thereof, all in
the form the Company would have been required to file with the Commission if
the Company had continued to be subject to such Section 13 or 15(d). The
Company shall not be obligated to file any such reports with the Commission if
the Commission does not permit such filings. The Company shall also be
required to deliver, together with each annual and quarterly financial
statements delivered pursuant to this paragraph, a calculation of the Fixed
Charge Coverage Ratio as of the end of the period to which such financial
statements relate. The Company also shall comply with the other provisions of
TIA Section 314(a).
SECTION 3.11. Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit any Project Company to,
directly or indirectly, enter into, permit to exist, renew or extend any
transaction or series of related transactions (including, without limitation,
the sale, purchase, exchange or lease of any assets or property or the
rendering of any services) with any Affiliate of the Company (other than a
Project Company) unless (i) the terms of such transaction or series of related
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transactions are (A) no less favorable to the Company or such Project Company,
as the case may be, than would be obtainable in a comparable transaction or
series of related transactions in arm's-length dealings with an unrelated third
party and (B) set forth in writing, if such transaction or series of related
transactions involve aggregate payments or consideration in excess of
$1,000,000, and (ii) with respect to a transaction or series of related
transactions involving the sale, purchase, lease or exchange of property or
assets having a value in excess of $5,000,000, such transaction or series of
transactions has been approved by a majority of the disinterested members of
the Board of Directors or, if there are no disinterested members of the Board
of Directors, the Board of Directors shall have received a written opinion of a
internationally recognized investment banking firm stating that such
transaction or series of transactions is fair to the Company or such Project
Company from a financial point of view.
The foregoing provisions do not prohibit:
(i) the payment of reasonable fees to directors of the Company
and the Project Companies who are not employees of the Company or a Project
Company;
(ii) any transaction between the Company and a Wholly Owned
Subsidiary or between Wholly Owned Subsidiaries not otherwise prohibited by
the terms of this Indenture;
(iii) the payment of any Restricted Payment which is expressly
permitted to be paid pursuant to Section 3.03(b);
(iv) any issuance of securities or other reasonable payments,
awards or grants, in cash or otherwise, pursuant to, or the funding of,
employment arrangements approved by the Board of Directors;
(v) the grant of stock options or similar rights to employees
and directors of the Company pursuant to plans approved by the Board of
Directors;
(vi) loans or advances to employees in the ordinary course of
business;
(vii) any repurchase, redemption or other retirement of Equity
Interests of the Company held by employees of the Company or any of the
Project Companies upon death, disability or termination of employment at a
price not in excess of the fair market value thereof approved by the Board
of Directors or other governing body of such Project Company;
(viii) the extension, renewal, entry into or payment pursuant to
any
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services agreement with AES that provides for the payment by the Company to
AES of fees on terms that are not more advantageous to AES than as provided
under the Services Agreement as in effect on the Issue Date; and
(ix) any agreement to do any of the foregoing.
Any transaction which has been determined, in the written opinion of an
independent internationally recognized investment banking firm, to be fair,
from a financial point of view, to the Company or the applicable Project
Company, shall be deemed to be in compliance with this section.
SECTION 3.12. Limitation on Sales of Assets and Refinancings.
(a) The Company shall not, and shall not permit any Project Company
to, consummate any Asset Sale other than to the Company or a Wholly Owned
Subsidiary unless (i) the Company or such Project Company, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the
fair market value, as determined in good faith by the Board of Directors, as
evidenced by a Board Resolution, of the shares or assets disposed of pursuant
to such Asset Sale, (ii) at least 75% of the consideration thereof received by
the Company or such Project Company is in the form of cash or cash equivalents
which are promptly converted into cash by the Person receiving such payment and
(iii) an amount equal to 100% of the Net Available Cash is applied by the
Company (or such Project Company, as the case may be) as set forth herein.
(b) To the extent that the fair market value (as determined in good
faith by the Board of Directors, as evidence by a Board Resolution) of any
asset, property or Capital Stock disposed of in any Asset Sale (other than an
Asset Sale of the assets, property or Capital Stock of any Existing Subsidiary
or Existing Joint Venture), together with the fair market value of all other
assets, property, or Capital Stock sold, transferred or otherwise disposed of
in such Asset Sales received during the twelve month period preceding the date
of such Asset Sale, exceeds 5% of Consolidated Net Tangible Assets, then within
three hundred sixty-five (365) days (such period being the "Application
Period") following the consummation of an Asset Sale, the Company or such
Project Company shall apply the Net Available Cash from such Asset Sale as
follows: (i) to the extent the Company or such Project Company elects, to
reinvest in Additional Assets (including by means of an investment in
Additional Assets by a Project Company with Net Available Cash received by the
Company or another Project Company or by means of an exchange of assets that
achieves a similar effect); (ii) to the extent of the balance of such Net
Available Cash after application in accordance with clause (i) and to the
extent the Company or such Project Company elects (or is required by the terms
of any Indebtedness or any Indebtedness of such Project Company), to prepay,
repay or purchase Indebtedness of the Company (other than Notes or Subordinated
Indebtedness) or
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Indebtedness of any Project Company (other than Non-Recourse Debt, Indebtedness
owed to the Company or an Affiliate of the Company or Preferred Stock);
provided, that in connection with any prepayment, repayment or purchase of
Indebtedness pursuant to clause (ii) above, the Company or such Project Company
shall retire such Indebtedness and cause the related loan commitment (if any)
to be permanently reduced in an amount equal to the principal amount so
prepaid, repaid or purchased; or (iii) to the extent of the balance of the Net
Available Cash after application in accordance with the preceding clauses (i)
and (ii) (the "Excess Proceeds"), the Company shall, within 30 days after the
end of the Application Period, except as provided below, make an offer to
purchase the Notes (an "Excess Proceeds Offer") at a purchase price of not less
than 100% of the principal amount (excluding any premium) plus accrued and
unpaid interest pursuant to and subject to the conditions set forth in this
Indenture. To the extent that any Net Available Cash from any Asset Sale
remains after an Excess Proceeds Offer, the Company or such Project Company may
utilize such remaining Net Available Cash in any manner not otherwise
prohibited by this Indenture.
In the event of the transfer of substantially all (but not all) of the
property and assets of the Company as an entirety to a Person in a transaction
permitted under Article 4, the Successor Corporation shall be deemed to have
sold the properties and assets of the Company not so transferred for purposes
of this Section 3.12; and shall comply with the provisions of this Section 3.12
with respect to such deemed sale as if it were an Asset Sale.
(c) The Company shall not be required to make an Excess Proceeds Offer
if the amount of Excess Proceeds is less than $5,000,000 for any particular
Asset Sale (which lesser amounts shall not be carried forward for purposes of
determining whether an Excess Proceeds Offer is required with respect to the
Net Available Cash from any subsequent Asset Sale).
(d) (1) The Company shall, within 30 days after the occurrence of any
Special Proceeds Event, cause all Special Proceeds with respect to such Special
Proceeds Event to be deposited into the Special Proceeds Account held by the
Collateral Agent and the Company shall, to the extent of the amounts on deposit
in the Special Proceeds Account, except as provided below, make an offer to
purchase the Notes (a "Special Proceeds Offer," and together with an Excess
Proceeds Offer, an "Offer"), at a purchase price of not less than 101% of the
principal amount (excluding any premium) plus accrued and unpaid interest
pursuant to and subject to the conditions set forth in this Indenture. To the
extent that any Special Proceeds remain after a Special Proceeds Offer, the
Collateral Agent shall retain such amounts on deposit in the Special Proceeds
Account in the form of cash or Dollar Permitted Investments. Under this
Indenture, the Company shall not be required to make a Special Proceeds Offer
unless the amount held by the Collateral Agent in the Special Proceeds Account
is greater than $5,000,000.
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(2) The Company will make an Offer by mailing by first class mail to
each Holder, with a copy to the Trustee, within 30 days after the end of the
relevant Application Period or Special Proceeds Event, a written notice stating
that the Holder may elect to have his Notes purchased by the Company either in
whole or in part (subject to proration as hereinafter described in the event
the Offer is oversubscribed) in integral multiples of $1,000 of principal
amount, at the applicable purchase price. The notice shall specify a purchase
date not less than 30 days, nor more than 60 days, after the date of such
notice (the "Purchase Date") and shall contain the information required in a
notice for a Change of Control Offer, to the extent applicable.
(3) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided above, the Company shall deliver to the
Trustee an Officers' Certificate as to (i) the amount of the Offer (the "Offer
Amount") and (ii) (A) in the case of an Excess Proceeds Offer, the allocation
pursuant to which such Offer is being made and the compliance of such
allocation with the provisions of Section 3.12(a) or (B) in the case of a
Special Proceeds Offer, the calculation of Special Proceeds arising from such
Special Proceeds Event. On such date, the Company shall also deposit with the
Collateral Agent, in the case of a Special Proceeds offer or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust), in the case of an Excess Proceeds Offer funds in an amount equal to
the Offer Amount to be held for payment in accordance with the provisions of
this section and the Security Agreement. Upon the expiration of the period for
which the Offer remains open (the "Offer Period"), the Company shall deliver,
or cause to be delivered, to the Trustee the Notes or portions thereof which
have been properly tendered to and are to be accepted by the Company. The
Collateral Agent or the Paying Agent, as the case may be, shall promptly, and
in any event within one (1) Business Day following the Purchase Date, mail or
deliver payment to each tendering Holder in the amount of the purchase price.
In the event that the aggregate purchase price of the Notes delivered, or
caused to be delivered, by the Company to the Trustee is less than the Offer
Amount, the Collateral Agent or the Paying Agent, as the case may be, shall
deliver the excess to the Company immediately after the expiration of the Offer
Period and the delivery to the Trustee of the Notes or portions thereof that
have been properly tendered to and are to be accepted for payment by the
Company.
(4) Holders electing to have a Note purchased will be required to
surrender the Note, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Note duly completed, to the Company or the Paying Agent,
as specified in, and at the address specified in, the notice at least ten (10)
Business Days prior to the Purchase Date. Holders will be entitled to withdraw
their election if the Trustee or the Paying Agent receives, not later than
three Business Days prior to the Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount
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of the Note which was delivered for purchase by the Holder and a statement that
such Holder is withdrawing his election to have such Note purchased. If at the
expiration of the Offer Period the aggregate principal amount of Notes
surrendered by Holders exceeds the Offer Amount, the Company shall elect the
Notes to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Company so that only Notes in denominations of
$1,000, or integral multiples thereof, shall be purchased) and shall notify the
Trustee of its selection in a writing signed by two Authorized Officers.
Holders whose Notes are purchased only in part will be issued new Notes equal
in principal amount to the unpurchased portion of the Notes surrendered.
(e) At the time the Company delivers Notes to the Trustee which are to
be accepted for purchase, the Company will also deliver an Officers'
Certificate stating that such Notes are to be accepted by the Company pursuant
to and in accordance with the terms of this section. A Note shall be deemed to
have been accepted for purchase at the time the Collateral Agent or the Paying
Agent, as the case may be, directly or through an agent, mails or delivers
payment therefor to the surrendering Holder.
(f) The Company shall comply to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and other securities laws or
regulations in connection with the repurchase of Notes pursuant to this
section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this section by virtue thereof. If the
Company is prohibited by applicable law from making the Offer or purchasing
Notes thereunder, the Company need not make an Offer pursuant to this section
for so long as such prohibition is in effect.
SECTION 3.13. Maintenance of Certain Cash Proceeds.
At any time (x) prior to the later to occur of (i) the commencement of
commercial operation of each of the Existing Joint Ventures and Existing
Subsidiaries and (ii) January 1, 2000 or (y) at which the Fixed Charge Coverage
Ratio is less than 2.0:1.0, the Company shall maintain (on an unconsolidated
basis) cash and Permitted Investments of the type referred to in clauses (vi)
and (vii) of the definition thereof (exclusive of any amounts held in the Debt
Service Reserve Account or the Special Proceeds Account) in an amount equal to
or greater than the Existing Project Company Net Cash Flow for the period from
the Restricted Date to the date of determination. For purposes hereof, the
"Restricted Date" means December 1, 1996 or, if the Fixed Charge Coverage Ratio
shall at any time have been equal to or greater than 2.0:1.0, then the most
recent date on which the Fixed Charge Coverage Ratio shall have decreased to
below 2.0:1.0.
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SECTION 3.14. Payment of Stamp Duty and Other Taxes.
The Company will pay any present or future stamp, court or documentary
taxes, or any other excise or property taxes, charges or similar levies which
arise under the laws of Bermuda from the execution, delivery or registration of
the Notes or any other document or instrument referred to herein.
SECTION 3.15. Payment of Taxes and Other Claims.
The Company shall pay or discharge, or cause to be paid or discharged,
before any material penalty accrues thereon all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Restricted
Subsidiary or upon the income, profits or property of the Company or any
Restricted Subsidiary; provided, however, that the Company shall not be
required to pay or discharge, or cause to be paid or discharged, any such tax,
assessment, charge or claim the amount, applicability or validity of which is
being contested in good faith by appropriate proceedings and for which adequate
reserves, if the same shall be required in accordance with GAAP, have been
made.
SECTION 3.16. Notice of Defaults and Other Events.
In the event that any Indebtedness of the Company or any Project Company
having an outstanding principal amount in excess of $5,000,000 (or its foreign
currency equivalent) individually or in the aggregate has been or could be
declared due and payable before its maturity because of the occurrence of any
event of default under such Indebtedness (including any Default under this
Indenture), the Company, promptly after it becomes aware thereof, will give
written notice thereof to the Trustee.
SECTION 3.17. Maintenance of Insurance.
The Company shall cause each Project Company to maintain insurance policies
covering such risks, in such amounts and with such terms as are normally
carried by similarly situated foreign invested companies engaged in the Line of
Business in the country in which such Project Company is located.
SECTION 3.18. Limitation on Issuance of Subsidiary Capital Stock.
The Company shall not permit any Restricted Subsidiary, directly or
indirectly, to issue or sell any shares of such Restricted Subsidiary's Capital
Stock (including options, warrants or other rights to purchase shares of
Capital Stock) except, to the extent not otherwise prohibited by this
Indenture, (i) to the Company or another Restricted Subsidiary that is a Wholly
Owned Subsidiary of the Company, or (ii) if the Net Cash
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Proceeds from such issuance or sale are applied, to the extent required to be
applied, pursuant to Section 3.12.
SECTION 3.19. Limitation on Changes in the Nature of the Business.
The Company and the Project Companies shall engage only in the Line of
Business as well as any other activities reasonably related to the Line of
Business.
SECTION 3.20. Limitation on Certain Subsidiary Investments.
The Company will not permit any Project Company with an interest in a
Facility to make any Investment in or merge with any other Person with an
interest in another Facility or in an Unrelated Business. Notwithstanding the
foregoing, subject to any applicable restrictions imposed by Section 3.03 the
Company may permit one or more of its Subsidiaries (each, an "Intermediate
Holding Company") to serve as a holding company for the Company's direct and
indirect interests in Facilities and Unrelated Businesses; provided that: (i)
each such Intermediate Holding Company's direct and indirect interest in any
Facility or Unrelated Business shall be limited to the ownership of Capital
Stock or Indebtedness of a Person with a direct or indirect interest in such
Facility or Unrelated Business; (ii) no consensual encumbrance or restriction
of any kind shall exist on the ability of any Intermediate Holding Company to
make the payments, distributions, loans, advances or transfers referred to in
clauses (i) through (iii) of the first paragraph of Section 3.05; (iii) no
Intermediate Holding Company shall incur, assume, create or suffer to exist any
Indebtedness other than Indebtedness to the Company; and (iv) no Lien shall
exist upon any assets of such Intermediate Holding Company whether now or
hereafter acquired, except for Liens upon the Capital Stock of a Subsidiary of
an Intermediate Holding Company securing Indebtedness of such Subsidiary.
SECTION 3.21. Government Approvals.
The Company shall, and shall cause each Project Company to, at all times
(i) obtain and maintain in full force and effect all government authorizations,
approvals and consents relating to any Project Company or Facility and (ii)
preserve and maintain good and valid title to its properties and assets
(subject to Section 3.07 hereof), except in any such case where any failure to
comply with clause (i) or (ii) would not reasonably be expected to have a
material adverse effect on the business or results of operations of the Company
and its Restricted Subsidiaries, taken as a whole, or the ability of the
Company to perform its obligations under this Indenture or the Notes.
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SECTION 3.22. Compliance with Laws.
The Company shall, and shall cause each Project Company to, comply with all
applicable laws, rules, regulations and orders of, and all applicable
restrictions imposed by, any governmental authority or regulatory body in
respect of the conduct of its business and the ownership of its properties,
except to the extent that any failure to comply therewith would not reasonably
be expected to have a material adverse effect on the business or results of
operations of the Company and its Restricted Subsidiaries, taken as a whole, or
the ability of the Company to perform its obligations under this Indenture or
the Notes.
SECTION 3.23. Operations and Maintenance.
The Company shall, and shall cause each Project Company to, in all material
respects operate and maintain each Facility in accordance with prudent industry
operating and maintenance practices generally accepted in the Line of Business.
ARTICLE 4
CONSOLIDATION AND MERGER
SECTION 4.01. Merger and Consolidation.
The Company shall not, in a single transaction or through a series of
related transactions, consolidate, merge or amalgamate with or into any other
corporation or sell, assign, convey, transfer or lease or otherwise dispose of
all or substantially all of its properties and assets as an entirety to any
Person or group of affiliated Persons, unless:
(i) either (A) the Company shall be the continuing Person, or
(B) the Person (if other than the Company) formed by such consolidation or
into which the Company is merged or to which the properties and assets of
the Company as an entirety are transferred (the "Successor Corporation")
shall be a corporation organized and existing under the laws of Bermuda,
the United States (or any State thereof or the District of Columbia) or
any other member country of the Organization for Economic Cooperation and
Development and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form and substance
reasonably satisfactory to the Trustee, all the obligations of the Company
under this Indenture and the Notes;
(ii) immediately before and immediately after giving effect to
such transaction on a pro forma basis (and treating any Indebtedness which
becomes an obligation of the Company (or the Successor Corporation if the
Company is not the continuing obligor under this Indenture) or any
Restricted Subsidiary as a
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result of such transaction as having been Incurred by such Person at the time
of such transaction), no Default shall have occurred and be continuing;
(iii) the Company shall have delivered or caused to be delivered, to the
Trustee: (A) an Officers' Certificate stating that such consolidation, merger
or amalgamation or such transfer complies with Article 4 hereof and that all
conditions precedent under this Indenture provided for or relating to such
transaction have been complied with; (B) an Opinion of Counsel of local counsel
of recognized standing as to the legal issues relating thereto; and (C) an
Opinion of Counsel of United States independent counsel of recognized standing
to the effect that the Holders of the Notes will not recognize income, gain or
loss for United States federal income tax purposes as a result of such
consolidation, merger or amalgamation or such transfer and will be subject to
United States federal income tax (if subject to United States federal income
tax at all either before or after such consolidation, merger or amalgamation or
such transfer) on the same amount and in the same manner and at the same time
as would have been the case if such consolidation, merger or amalgamation or
such transfer had not occurred;
(iv) the Successor Corporation shall expressly agree to indemnify each
Holder of a Note against any tax, assessment or governmental charge payable by
withholding or deduction thereafter imposed on such Holder or with respect to
the payment of principal and interest on the Notes solely as a consequence of
such consolidation, merger or amalgamation or such transfer;
(v) immediately after giving effect to such transaction on a pro forma
basis (and treating any Indebtedness which becomes an obligation of the Company
(or the Successor Corporation if the Company is not the continuing obligor
under this Indenture) or a Restricted Subsidiary in connection with or as a
result of such transaction as having been Incurred by such Person at the time
of such transaction), the Company (or the Successor Corporation if the Company
is not the continuing obligor under this Indenture) shall have Consolidated Net
Worth in an amount which is not less than the Consolidated Net Worth of the
Company immediately prior to such transaction; and
(vi) immediately after giving effect to such transaction on a pro forma
basis the Company (or the Successor Corporation if the Company is not the
continuing obligor under this Indenture) would be able to Incur at least $1.00
of additional Indebtedness pursuant to Section 3.04(a).
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SECTION 4.02. Successor Substituted.
(a) Upon any such consolidation, merger or amalgamation, or any
conveyance, transfer, or disposition of all or substantially all of the
properties or assets of the Company in accordance with Section 4.01, but not in
the case of a lease, the Successor Corporation shall succeed to and be
substituted for the Company under this Indenture and the Notes, and the Company
shall thereupon be released from all obligations hereunder and under the Notes
and the Company, as the predecessor corporation, may thereupon or at any time
thereafter be dissolved, wound up or liquidated. The Successor Corporation
thereupon may cause to be signed, and may issue either in its own name or in
the name of the Company, all or any of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of the Successor Corporation instead of the
Company and subject to all the terms, conditions and limitations prescribed in
this Indenture, the Trustee shall authenticate and shall deliver any Notes
which the Successor Corporation thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Notes so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Notes theretofore or thereafter issued in accordance with the terms of this
Indenture as though all such Notes had been issued at the date of the execution
hereof.
(b) In the case of any consolidation, merger, amalgamation or
transfer described in Section 4.02(a) above, such changes in form (but not in
substance) may be made in the Notes thereafter to be issued as may be
appropriate.
ARTICLE 5
DEFAULTS AND REMEDIES
SECTION 5.01. Events of Default.
An "Event of Default" means any of the following events:
(a) default in the payment of interest on any Note when the same
becomes due and payable, and such default continues for a period of 30 days;
(b) default in the payment of the principal of any Note when the
same becomes due and payable at maturity or otherwise or a failure to redeem or
purchase Notes when required pursuant to this Indenture or the Notes;
(c) default in performance of any other covenants or agreements in
this Indenture, the Notes or the Security Agreement and the default continues
for 30 days after the date on which written notice of such default is given to
the Company by the Trustee or to the Company and the Trustee by Holders of at
least 25% in aggregate principal
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amount of the Notes then outstanding hereunder;
(d) there shall have occurred either (i) a default by the Company or
any Project Company under any instrument or instruments under which there is or
may be secured or evidenced any Indebtedness of the Company or any Project
Company (other than the Notes or any Non-Recourse Debt) having an outstanding
principal amount of $5,000,000 (or its foreign currency equivalent) or more
individually or in the aggregate that has caused the holders thereof to declare
such Indebtedness to be due and payable prior to its Stated Maturity or (ii) a
default by the Company or any Project Company in the payment when due or any
portion of the principal under any instrument or instruments under which there
is or may be secured or evidenced any Indebtedness of the Company or any
Project Company (other than the Notes or any Non- Recourse Debt), and such
unpaid portion exceeds $5,000,000 (or its foreign currency equivalent)
individually or in the aggregate and is not paid, or such default is not cured
or waived, within any grace period applicable thereto, unless such Indebtedness
is discharged within 20 days of the Company or a Project Company becoming aware
of such default; provided, however, that the foregoing shall not apply to any
default on Non-Recourse Indebtedness;
(e) any final judgment or order (not covered by insurance) for the
payment of money shall be rendered against the Company or any Project Company
in an amount in excess of $5,000,000 (or its foreign currency equivalent)
individually or in the aggregate for all such final judgments or orders against
all such Persons (treating any deductibles, self-insurance or retention as not
so covered) and shall not be discharged, and there shall be any period of 60
consecutive days following entry of the final judgment or order in excess of
$5,000,000 (or its foreign currency equivalent) individually or in the
aggregate during which a stay of enforcement of such final judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect;
(f) (i) other than in accordance with the provisions of this
Indenture or the Security Agreement, for any reason, other than the
satisfaction in full and discharge of the obligations secured thereby, the
Collateral Agent shall cease to have a first priority security interest in the
Collateral or (ii) other than in accordance with the provisions of this
Indenture, the Company asserts in writing that the Security Agreement has
ceased to be or is not in full force and effect;
(g) the Company or any Restricted Subsidiary pursuant to any
Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief
against it in an involuntary case,
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(iii) consents to the appointment or taking possession
by a Bankruptcy Custodian of the Company or such Restricted
Subsidiary or for any substantial part of the property of any of
them.
(iv) make a general assignment for the benefit of its
creditors, or
(v) admits in writing its inability to generally pay
its debts as such debts become due; or takes any comparable action
under any foreign laws relating to insolvency; and
(h) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law, that:
(i) is for relief against the Company or any
Restricted Subsidiary in an involuntary case,
(ii) appoints a Bankruptcy Custodian of any of the
Company or any Restricted Subsidiary or for all or substantially
all of its property, or
(iii) orders the winding up or liquidation of the
Company or any Restricted Subsidiary;
or any similar relief is granted under any similar laws of another
jurisdiction; and the order or decree remains unstayed and in effect for 60
days.
Any notice of Default given by the Trustee or Noteholders under
this section must specify the Default, demand that it be remedied and state
that the notice is a "Notice of Default."
The Company shall file annually with the Trustee a certificate
describing any Default by the Company in the performance of any conditions or
covenants that has occurred under this Indenture and its status. The Company
shall deliver to the Trustee, within 30 days after the occurrence thereof,
written notice of any event which with the giving of notice or the lapse of
time or both would become an Event of Default under clause (c), (d), (e) or (h)
hereof.
Subject to the provisions of Section 6.01 and 6.02, the Trustee
shall not be charged with knowledge of any Event of Default unless written
notice thereof shall have been given to the Trustee by the Company, the Paying
Agent, any Holder or an agent of any Holder.
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SECTION 5.02. Acceleration.
If an Event of Default (other than an Event of Default specified in clauses
(g) and (h) of Section 5.01 with respect to the Company or any Restricted
Subsidiary) occurs and is continuing, the Trustee by notice to the Company, or
the Holders of at least 25% in principal amount of the Notes by notice to the
Company and the Trustee, may declare the principal of and any accrued and
unpaid interest on all the Notes to be due and payable. Upon such declaration
the principal and interest shall be due and payable immediately. If an Event
of Default specified in clause (g) or (h) of Section 5.01 with respect to the
Company or any Restricted Subsidiary occurs, the principal of and interest on
all the Notes shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any
Noteholders. The Holders of a majority in principal amount of the Notes by
notice to the Trustee may rescind any such declaration and its consequences if
the rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived, except nonpayment of
principal or interest that has become due solely because of such declaration.
No such rescission shall affect any subsequent or other Default or Event of
Default or impair any consequent right.
SECTION 5.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal or interest on the Notes
or to enforce the performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 5.04. Waiver of Past Defaults.
The Holders of a majority in principal amount of the Notes by notice to the
Trustee may waive an existing Default and its consequences except (a) a Default
in the payment of the principal of or interest on any Note or (b) a Default in
respect of a provision that under Section 8.02 cannot be amended without the
consent of each Noteholder affected. When a Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any consequent right.
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SECTION 5.05. Control by Majority.
The Holders of a majority in principal amount of the Notes may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on it. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, or, subject to Section 6.01, that the Trustee determines is unduly
prejudicial to the rights of other Noteholders, or would involve the Trustee in
personal liability; provided, however, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be
entitled, subject to the duty of the Trustee during a Default to act with the
required standard of care, to indemnification reasonably satisfactory to it
against all risk, losses and expenses caused by taking or not taking such
action. Subject to Section 6.01, the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at the
request or direction of the Noteholders pursuant to this Indenture, unless such
Noteholders shall have provided to the Trustee security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities which might be
incurred in compliance with such request or direction.
SECTION 5.06. Limitation on Suits.
A Noteholder may pursue a remedy with respect to this Indenture or the
Notes only if:
(a) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(b) the Holders of at least 25% in principal amount of the Notes make
a written request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer to the Trustee security reasonably
satisfactory to it or indemnity against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(e) the Holders of a majority in principal amount of the Notes do not
give the Trustee a direction inconsistent with the request during such 60-day
period.
A Noteholder may not use this Indenture to prejudice the rights of another
Noteholder or to obtain a preference or priority over another Noteholder.
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SECTION 5.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal and interest on the Note, on
or after the respective due dates expressed in the Note, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of the Holder, except to the
extent that the institution or prosecution of any such suit or the entry of
judgment therein would result in the surrender, impairment, waiver or loss of
the Lien on the Collateral.
SECTION 5.08. Collection Suit by Trustee.
If an Event of Default specified in Section 5.01(a) or (b) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company for the whole amount of principal and
interest remaining unpaid (together with interest on such unpaid interest to
the extent lawful) and the amounts provided for in Section 6.07.
SECTION 5.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents and
take such other actions including participating as a member or otherwise in any
committees of creditors appointed in the matter as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the amounts provided in Section 6.07) and the Noteholders allowed in any
judicial proceedings relative to the Company, its creditors or its property
and, unless prohibited by law or applicable regulations, may vote on behalf of
the Holders in any election of a trustee in bankruptcy or other Person
performing similar functions, and any custodian in any such judicial proceeding
is hereby authorized by each Holder to make payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 6.07. To
the extent that the payment of any such amount due to the Trustee under Section
6.07 out of the estate in any such proceeding shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be paid out of,
any and all distributions, dividends, money, securities and other properties
which the Holders of the Notes may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
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SECTION 5.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee for amounts due under Section 6.07;
Second: to Noteholders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal and
interest, respectively; and
Third: to the Company.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this section. At least 15 days before such record
date, the Company shall give written notice to each Noteholder and the Trustee
of the record date, the payment date and amount to be paid.
SECTION 5.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in
its discretion may assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in the suit, having due regard to the merits
and good faith of the claims or defenses made by the party litigant. This
section does not apply to a suit by the Trustee, a suit by a Holder pursuant to
Section 5.07, or a suit by Holders of more than 10% in principal amount of the
Notes.
SECTION 5.12. Waiver of Stay or Extension Laws.
The Company shall not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company hereby
expressly waives all benefit or advantage of any such law, and shall not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
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ARTICLE 6
TRUSTEE
SECTION 6.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent Person would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties that
are specifically set forth in this Indenture and no others and no
implied covenants or obligations shall be read into this Indenture
against the Trustee.
(ii) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture. However, the Trustee shall
examine the certificates and opinions to determine whether or not
they conform to the requirement of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) This paragraph does not limit the effect of
paragraph (b) of this section.
(ii) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts.
(iii) The Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 5.02, 5.04 or
5.05.
(iv) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers,
unless it receives indemnity satisfactory to it against any risk,
loss, liability or expense.
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(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this section.
(e) The Trustee, in its capacity as Trustee and Registrar and Paying
Agent, shall not be liable to the Company, the Noteholders or any other Person
for interest on any money received by it, including, but not limited to, money
with respect to principal of or interest on the Notes, except as the Trustee
may agree with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
SECTION 6.02. Rights of Trustee.
(a) The Trustee may rely on any document reasonably believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(i) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate, an Opinion of Counsel or both. The
Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on any such Officers' Certificate or Opinion of
Counsel.
(ii) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with
due care.
(iii) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within
its rights or powers provided, however, that the Trustee's conduct does not
constitute wilful misconduct, negligence or bad faith.
(iv) The Trustee may consult with counsel, and the advice or
opinion of such counsel as to matters of law shall be full and complete
authorization and protection from liability in respect of any action taken,
omitted or suffered by it hereunder in good faith and in accordance with
the advice of such counsel.
(v) The Trustee shall not be obligated to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture or any other paper or document.
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SECTION 6.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company or an Affiliate with
the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights. However, the Trustee is subject to Sections 6.10 and
6.11.
SECTION 6.04. Trustees Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes, it shall not
be responsible for any statement in the Notes other than its authentication.
The Trustee shall have no duty to ascertain or inquire as to the performance of
the Company's covenants in Article 3 hereof.
SECTION 6.05. Notice of Defaults.
If a Default or an Event of Default occurs and is continuing and if it is
known to a Trust Officer of the Trustee, the Trustee shall mail to Noteholders
a notice of the Default or Event of Default within 90 days after a Trust
Officer of the Trustee has actual knowledge of the occurrence thereof. Except
in the case of a Default in any payment on any Note, the Trustee may withhold
the notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Noteholders.
SECTION 6.06. Reports by Trustee to Holders.
Within 60 days after the reporting date stated in Section 11.09, the
Trustee shall mail to Noteholders a brief report dated as of such date that
complies with TIA Section 313(a) if required by that Section. The Trustee
also shall comply with TIA Section 313(b)(2).
A copy of each report at the time of its mailing to Noteholders shall be
filed with the Commission and each stock exchange on which the Notes are
listed. The Company shall promptly notify the Trustee when the Notes are
listed on any stock exchange and of any delisting thereof.
SECTION 6.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee
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upon request for all reasonable out-of-pocket disbursements, expenses and
advances incurred by it. Such expenses shall include the reasonable
compensation and out-of-pocket disbursements and expenses of the Trustee's
agents and counsel.
The Company shall indemnify the Trustee and its officers, directors,
employees and agents for, and hold it and them harmless against, any claim,
loss, liability or expense, including, but not limited to, reasonable
attorneys' fees, disbursements and expenses, incurred by it or them arising out
of or in connection with the administration of this trust and the performance
of its or their duties hereunder including the costs and expenses of defending
itself or themselves against any claim or liability in connection with the
exercise or performance of any of its or their powers or duties hereunder or
under the Security Agreement. The Trustee shall notify the Company promptly of
any claim for which it may seek indemnity. Failure by the Trustee to so notify
the Company shall not relieve the Company of its obligations hereunder. The
Company shall defend the claim and the Trustee shall cooperate in the defense.
The Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel. The Company need not pay for any settlement
made without its consent, which consent shall not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee as a result of the negligence or willful
misconduct of the Trustee.
To secure the Company's payment obligations in this section, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on
particular Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.01(g) or (h) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's obligations under this Section 6.07 with respect to any Lien
arising hereunder shall survive the resignation or removal of the Trustee, the
discharge of such obligations pursuant to Article 7 of this Indenture and the
termination of this Indenture.
SECTION 6.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this section.
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The Trustee may resign at any time by so notifying the Company. The
Holders of a majority in principal amount of the Notes may, by written notice
to the Trustee, remove the Trustee by so notifying the Trustee and the Company.
The Company, by notice to the Trustee, shall remove the Trustee if:
(a) the Trustee fails to comply with Section 6.10;
(b) the Trustee is adjudged a bankrupt or an insolvent;
(c) a receiver or public officer takes charge of the trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in principal amount of the Notes may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 6.10 any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and the Company. Thereupon the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Noteholders. The retiring Trustee shall promptly transfer all property held by
it as Trustee to the successor Trustee, subject to the Lien provided for in
Section 6.07.
SECTION 6.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
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SECTION 6.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1). The Trustee shall always have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310(b). Nothing herein shall prevent the Trustee from filing with the
Commission the application referred to in the second-to-last paragraph of TIA
Section 310(b).
SECTION 6.11. Preferential Collections of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), except with respect
to any creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed is subject to TIA Section 311(a) to the extent
indicated.
ARTICLE 7
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 7.01. Discharge of Liability on Notes; Defeasance.
If (a) the Company delivers to the Trustee all outstanding Notes (other
than Notes replaced pursuant to Section 2.07) for cancellation or (b) all
outstanding Notes have become due and payable and the Company irrevocably
deposits with the Trustee as trust funds solely for the benefit of the Holders
for that purpose funds sufficient to pay at maturity the principal of and all
accrued interest on all outstanding Notes (other than Notes replaced pursuant
to Section 2.07), and if, in either case, the Company pays all other sums
payable hereunder by the Company, then, subject to Sections 7.06, this
Indenture shall cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel and at the
cost and expense of the Company.
SECTION 7.02. Defeasance and Discharge of Indenture.
The Company will be deemed to have paid and will be discharged from any
and all obligations in respect of the Notes on the 123rd day after the date of
the deposit referred to in clause (i) hereof, and the provisions of this
Indenture will no longer be in effect with respect to the Notes, in each case
subject to the penultimate paragraph of this Section 7.03, and the Trustee, at
the reasonable request of and at the expense of the Company, shall execute
proper instruments acknowledging the same, except as to (a) rights of
registration of transfer and exchange, (b) substitution of apparently
mutilated, defaced, destroyed, lost or stolen Notes, (c) rights of Holders to
receive payments of principal thereof and interest thereon, (d) the Company's
obligations under Section 3.02,
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(e) the rights, obligations and immunities of the Trustee hereunder including,
without limitation, those arising under Section 6.07 hereof, (f) the rights of
the Holders as beneficiaries of this Indenture with respect to the property so
deposited with the Trustee payable to all or any of them and (g) the rights,
obligations and immunities which survive as provided in the penultimate
paragraph of this Section 7.02; provided that the following conditions shall
have been satisfied:
(i) with reference to this Section 7.02, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirement of Section 6.10)
or Paying Agent (other than the Company or a Subsidiary or Affiliate of
the Company) and conveyed all right, title and interest for the benefit
of the Holders, under the terms of an irrevocable trust agreement in
form and substance satisfactory to the Trustee as trust funds in trust,
specifically pledged as security for, and dedicated solely to, the
benefit of the Holders, in and to, (A) money in an amount, (B) U.S.
Government Obligations that, through the payment of interest and
principal in respect thereof in accordance with their terms, will
provide, not later than one Business Day before the due date of any
payment referred to in this clause (i), money in an amount or (C) a
combination thereof in an amount sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed
in a written certification thereof delivered to the Trustee, to pay and
discharge, without consideration of any reinvestment of interest and
after payment of all federal, state and local taxes or other fees,
charges and assessments in respect thereof payable by the Trustee or
Paying Agent, the principal of and interest on the outstanding Notes
when due; provided that the Trustee or Paying Agent shall have been
irrevocably instructed to apply such money or the proceeds of such U.S.
Government Obligations to the payment of such principal and interest
with respect to the Notes;
(ii) such deposit shall not result in or constitute a
Default or result in a breach or violation of, or constitute a Default
under, any other agreement or instrument to which the Company is a
party or by which it is bound;
(iii) no Default shall have occurred and be continuing on
the date of such deposit or during the period ending on the 123rd day
after such date of deposit;
(iv) the Company shall have delivered to the Trustee (A)
either (1) a ruling directed to the Trustee received from the Internal
Revenue Service to the effect that the Holders will not recognize
income, gain or loss for federal income tax purposes as a result of the
Company's exercise of its option under this Section 7.02 and will be
subject to federal income tax on the same amount and in the same manner
and at the same times as would have been the case if such option had
not
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been exercised or (2) an Opinion of Counsel from recognized tax counsel
licensed to practice law in the United States (who may not be an
employee of the Company) to the same effect as the ruling described in
clause (1), which must refer to and be based upon a ruling to that
effect published by the Internal Revenue Service, unless there has been
a change in the applicable federal income tax law since the date of
this Indenture such that a ruling from the Internal Revenue Service is
no longer required and (B) an Opinion of Counsel to the effect that (1)
the creation of the defeasance trust does not violate the Investment
Company Act of 1940, and (2) the Holders of the Notes have a valid
security interest in the trust funds subject to no prior Liens under
the New York Uniform Commercial Code;
(v) the Company shall have delivered to the Trustee an
Opinion of Counsel licensed to practice law in Bermuda to the effect
that under the laws of Bermuda, the Holders of the Notes (other than
Bermuda Persons) will not recognize gain for Bermuda tax purposes and
payments from the defeasance trust to any such Holder will not be
subject to withholding payments under the laws of Bermuda; and
(vi) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, in each case stating
that all conditions precedent provided for herein relating to the
defeasance contemplated by this Section 7.02 have been complied with.
Notwithstanding the foregoing clause (i), prior to the end of the 123
day period referred to in clause (iv)(B)(2) above, none of the Company's
obligations under this Indenture shall be discharged. Subsequent to the end of
such 123-day period with respect to this Section 7.02, the Company's
obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.12, 3.01, 3.02,
3.06, 6.07, 7.04, 7.05 and 7.06 shall survive until the Notes are no longer
outstanding. Thereafter, only the Company's obligations in Sections 6.07,
7.04, 7.05 and 7.06 shall survive. If and when a ruling from the Internal
Revenue Service or Opinion of Counsel referred to in clause (iv)(A) above is
able to be provided specifically without regard to, and not in reliance upon,
the continuance of the Company's obligations under Section 3.01, then the
Company's obligations under such Section 3.01 shall cease upon delivery to the
Trustee of such ruling or Opinion of Counsel and compliance with the other
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 7.02.
After any such irrevocable deposit and the fulfillment of the other
requirements of this Section 7.02, the Trustee upon request shall acknowledge
in writing the discharge of the Company's obligations under the Notes and this
Indenture except for those surviving obligation in the immediately preceding
paragraph.
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SECTION 7.03. Defeasance of Certain Obligations.
The Company may omit to comply with any term, provision or condition
set forth in clauses (v) and (vi) of Section 4.01 and Section 3.03 through
3.23, and clause (c) of Section 5.01 with respect to clauses (v) and (vi) of
Section 4.01 and Sections 3.03 through 3.23, and clauses (d), (e) and (f) of
Section 5.01 shall be deemed not to be Events of Default, in each case with
respect to the outstanding Notes if:
(i) with reference to this Section 7.03, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section
6.10) or Paying Agent (other than the Company or a Subsidiary or
Affiliate of the Company) and conveyed all right, title and interest
for the benefit of the Holders, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee as trust
funds in trust, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders, in and to, (A) money in an
amount, (B) U.S. Government Obligations that, through the payment of
interest and principal in respect thereof in accordance with their
terms, will provide, not later than one Business Day before the due
date of any payment referred to in this clause (i), money in an amount
or (C) a combination thereof in an amount, sufficient, in the opinion
of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee,
to pay and discharge, without consideration of any reinvestment of
interest and after payment of all federal, state and local taxes or
other fees, charges and assessments in respect thereof payable by the
Trustee or Paying Agent, the principal of and interest on the
outstanding Notes when due; provided that the Trustee or Paying Agent
shall have been irrevocably instructed to apply such money or the
proceeds of such U.S. Government Obligations to the payment of such
principal and interest with respect to the Notes;
(ii) such deposit will not result in or constitute a
Default or result in a breach or violation of, or constitute a default
under, any other agreement or instrument to which the Company is a
party or by which it is bound;
(iii) no Default shall have occurred and be continuing on
the date of such deposit;
(iv) the Company has delivered to the Trustee (A) an
Opinion of Counsel from recognized tax counsel licensed to practice law
in the United States (who may not be an employee of the Company) to
the effect that the Holders will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and defeasance
of certain obligations and will be subject to federal income
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tax on the same amount and in the same manner and at the same times as
would have been the case if such deposit and defeasance had not
occurred; and (B) an Opinion of Counsel to the effect that (1) the
creation of the defeasance trust does not violate the Investment
Company Act of 1940, and (2) the Holders of the Notes have a valid
security interest in the trust funds subject to no prior Liens under
the New York Uniform Commercial Code;
(v) the Company shall have delivered to the Trustee an
Opinion of Counsel licensed to practice law in Bermuda to the effect
that under the laws of Bermuda the Holders of the Notes (other than
Bermuda Persons) will not recognize gain for Bermuda tax purposes and
payments from the defeasance trust to any such Holder will not be
subject to withholding payments under the laws of Bermuda; and
(vi) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 7.03 have been complied with.
SECTION 7.04. Application of Trust Money.
Subject to Section 7.06 of this Indenture, the Trustee or Paying Agent
shall hold in trust money or U.S. Government Obligations deposited with it
pursuant to Section 7.02 or 7.03 of this Indenture, as the case may be, and
shall apply the deposited money and the money from U.S. Government Obligations
in accordance with this Indenture to the payment of principal of and interest
on the Notes. The Trustee shall be under no obligation to invest such money or
U.S. Government Obligations except as it may agree with the Company and in no
event shall the Trustee have any liability for, or in respect of, any such
investment made as agreed with the Company.
SECTION 7.05. Repayment to Company.
Subject to Sections 6.07, 7.02 and 7.03 of this Indenture, the Trustee
and the Paying Agent shall promptly pay to the Company upon written request any
excess money held by them at any time and thereupon shall be relieved from all
liability with respect to such money. The Trustee and the Paying Agent shall
pay to the Company upon written request any money held by them for the payment
of principal or interest that remains unclaimed for two years; provided,
however, that the Company shall if requested by the Trustee or the Paying
Agent, give the Trustee or such Paying Agent indemnification reasonably
satisfactory to it against any and all liability which may be incurred by it by
reason of such payment; and provided, further, that the Trustee or such Paying
Agent before being required to make any payment may cause to be published at
the request and
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expense of the Company once in a newspaper of general circulation in the City
of New York or mail to each Holder entitled to such money at such Holder's
address as set forth in the Note Register notice that such money remains
unclaimed and that after a date specified therein (which shall be at least 30
days from the date of such publication or mailing) any unclaimed balance of
such money then remaining will be repaid to the Company. After payment to the
Company, Holders entitled to such money must look to the Company for payment as
general creditors unless an applicable law designates another person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.
SECTION 7.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 7.02 or 7.03 of this
Indenture, as the case may be, by reason of any legal proceedings or by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 7.02 or 7.03 of this
Indenture, as the case may be, until such time as the Trustee or Paying Agent
is permitted to apply all such money or U.S. Government Obligations in
accordance with Section 7.02 or 7.03 of this Indenture, as the case may be;
provided that, if the Company has made any payment of principal of or interest
on any Notes because of the reinstatement of its obligations, the Company shall
be subrogated to the rights of the Holders of such Notes to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE 8
AMENDMENTS AND SUPPLEMENTS
SECTION 8.01. Without Consent of Holders.
(a) The Company and the Trustee may amend or supplement the
Indenture without notice to or the consent of any Noteholder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with Article 4;
(3) to provide for uncertificated Notes in addition to
certificated Notes; provided, however, that the uncertificated Notes
are issued, in registered form for purposes of Section 163(f) of the
Internal Revenue Code of 1986, as amended, or in a manner such that the
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uncertificated Notes are described in Section 163(f)(2)(b) of the
Code;
(4) to add guarantees with respect to the Notes or to
further secure the Notes;
(5) to add to the covenants of the Company for the
benefit of the Holders or to surrender any right or power herein
conferred upon the Company;
(6) to comply with the requirements of the Commission in
connection with qualification of this Indenture under the TIA;
(7) to establish and maintain the Liens of the Security
Agreement; or
(8) to make any change that does not adversely affect the
rights of any Noteholder.
(b) The Company and the Trustee may amend or supplement the Security
Agreement without notice to or the consent of any Noteholder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with Article 4;
(3) to add additional guarantees with respect to
the Notes or to further secure the Notes;
(4) to add to the covenants of the Company for
the benefit of the Holders or to surrender any right or power
herein conferred upon the Company;
(5) to comply with the requirements of the
Commission in connection with qualification of this Indenture
under the TIA;
(6) to establish and maintain the Liens of the
Security Agreement; or
(7) to make any change that does not adversely
affect the rights of any Noteholder.
(c) After an amendment or supplement under this Section becomes
effective,
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the Company shall mail to Noteholders a notice briefly describing such amendment
or supplement. The failure to give such notice to all Noteholders, or any
defect therein, shall not impair or affect the validity of an amendment or
supplement under this section.
SECTION 8.2. With Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture, the
Notes or the Security Agreement with the written consent of the Holders of a
majority in principal amount of the Notes. However, without the consent of
each Noteholder affected, an amendment or supplement under this Section may not
(a) reduce the amount of Notes the Holders of which must consent to
an amendment or supplement;
(b) reduce the rate of or change the time for payment of interest on
any Note;
(c) change the currency or consideration of payment of the Notes;
(d) reduce the principal of or change the Stated Maturity of any
Note;
(e) reduce the premium payable upon the redemption of any Note or
change the time at which any Note may or shall be redeemed in accordance with
Article 10;
(f) amend, change or modify the obligations of the Company to make
or consummate any offer pursuant to Section 3.08 or 3.12 or modify any of the
provisions or definitions with respect thereto;
(g) permit the release or termination of all or substantially all of
the Liens of the Collateral Agent on the Collateral or deprive the Holders of
all or substantially all of the security afforded by the Liens of the Security
Agreement or this Indenture;
(h) release the Company from its obligations under this Indenture
other than pursuant to Article 4 hereof;
(i) permit the creation of any Lien (other than Liens permitted
under Section 3.07) on the Collateral or any part thereof or terminate the
Liens of the Collateral Agent on the Collateral or any part thereof or deprive
the holders of the security afforded by the Liens of the Security Agreement or
this Indenture;
(j) change the obligation of the Company to pay Additional Amounts;
and
(k) make any change in Section 5.04, Section 5.07 or this second
sentence of
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this Section 8.02.
It shall not be necessary for the consent of the Holders under this Section
8.02 to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment or supplement under this Section becomes effective, the
Company shall mail to Noteholders a notice briefly describing such amendment or
supplement. The failure to give such notice to all Noteholders, or any defect
therein, shall not impair or affect the validity of an amendment or supplement
under this section.
SECTION 8.03. Supplemental Indentures.
Every amendment or supplement to this Indenture or the Notes shall be set
forth in a supplemental indenture that complies with the TIA as then in effect.
SECTION 8.04. Revocation and Effect of Consents.
Until an amendment or supplement under this Article or a waiver under
Article 6 becomes effective, a consent to it by a Holder of a Note is a
continuing consent by the Holder and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder's Note,
even if notation of the consent is not made on any Note. However, any such
Holder or subsequent Holder may revoke the consent as to his Note or portion of
a Note if the Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective.
After an amendment or supplement becomes effective, it shall bind every
Noteholder.
SECTION 8.05. Notation on or Exchange of Notes.
If an amendment changes the terms of a Note, the Trustee may require the
Holder of the Note to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Note regarding the changed terms and return it to
the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Note shall issue and the Trustee shall authenticate
a new Note that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Note shall not affect the validity of such
amendment.
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SECTION 8.06. Trustee to Sign Amendments.
The Trustee shall sign any supplemental indenture which sets forth an
amendment or supplement authorized pursuant to this Article if the amendment or
supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may but need not sign it.
In signing such supplemental indenture the Trustee shall be entitled to
receive, and (subject to Section 6.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
supplemental indenture is authorized or permitted by this Indenture and, with
respect to an amendment or supplement pursuant to Section 8.02, evidence of the
consents of Holders required in connection therewith.
SECTION 8.7. Fixing of Record Dates.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to take any action under this
Indenture by vote or consent. Except as provided herein, such record date
shall be the later of 30 days prior to the first solicitation of such consent
or vote or the date of the most recent list of Noteholders furnished to the
Trustee pursuant to Section 2.05 prior to such solicitation. If a record date
is fixed, those Persons who were Noteholders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to take such
action by vote or consent or to revoke any vote or consent previously given,
whether or not such Persons continue to be Holders after such record date;
provided, however, that unless such vote or consent is obtained from the
Holders (or their duly designated proxies) of the requisite principal amount of
outstanding Notes prior to the date which is the 120th day after such record
date, any such vote or consent previously given shall automatically and without
further action by any Holder be canceled and of no further effect.
ARTICLE 9
SECURITY AGREEMENT
SECTION 9.01. Security Agreement. (a) In order to secure the obligations
of the Company under this Indenture, the Company, the Collateral Agent and the
Trustee have entered into the Security Agreement to create the Liens of the
Security Agreement and for related matters.
(b) The Company covenants and agrees that it has full right, power
and lawful authority to grant, bargain, sell, release, convey, hypothecate,
assign, mortgage, pledge and transfer the Collateral, in the manner and form
done, or intended to be done, in this Indenture and the Security Agreement.
The Company further covenants and agrees that the Security Agreement and the
actions taken hereunder and thereunder create, or will create, a perfected
first priority Lien on the Collateral which they purport to create, prior
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to all other Liens.
(c) As among the Holders, the Collateral as now or hereafter
constituted shall be held for the equal and ratable benefit of the Holders
without preference, priority or distinction of any thereof over any other by
reason of difference in time of issuance, sale or otherwise, as security for
the Company's obligations under this Indenture and the Notes.
SECTION 9.02. Holders' Consent. (a) Each Holder, by its acceptance of a
Note, (i) consents and agrees to the terms of the Security Agreement and
authorizes and approves the Trustee's execution thereof, and (ii) agrees that
such Holder is bound by the terms thereof and that such Holder may not take any
action contrary thereto.
SECTION 9.03. Trust Indenture Act of 1939 Requirements. (a) The release of
any Collateral from the terms of the Security Sharing Agreement or the release
of, in whole or in part, the Liens created by the Security Sharing Agreement,
will not be deemed to impair the Liens of the Security Sharing Agreement in
contravention of the provisions hereof and of the Security Agreement if and to
the extent the Collateral or Liens are released pursuant to the terms of the
Security Agreement. Each of the Holders acknowledges that a release of
Collateral or Liens strictly in accordance with the terms of the Security
Agreement will not be deemed for any purpose to be an impairment of the Liens
in contravention of the terms of this Indenture or the Security Agreement.
SECTION 9.04. Release upon Termination of the Company's Obligations.
(a) In the event that the Company delivers an Officers' Certificate
certifying that the Company has complied with Sections 7.01 and, if applicable,
Section 7.02 with respect to the Notes, or that all obligations under this
Indenture have been satisfied and discharged in accordance with this Indenture,
the Trustee shall deliver to the Company and the Collateral Agent on behalf of
the Holders, a notice disclaiming, relinquishing and releasing (without
recourse or warranty) any and all rights it has in respect of the Collateral
and any other instruments or documents evidencing or effecting such release in
such form as the Company may reasonably request.
(b) Any release of any portion of the Collateral made strictly in
compliance with the provisions of this Section 9.04 shall not be deemed to
impair the Liens created by the Security Agreement in contravention of the
provisions of this Indenture.
(c) Release of Collateral. To the extent applicable, the Company
shall comply with clause Section 314(d) of the TIA relating to the release of
property from the Lien of the Security Agreement.
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SECTION 9.05. Retirement of Notes. The Trustee shall direct the Collateral
Agent to release such amounts held in the Special Proceeds Account and the
Trustee shall apply such amounts from time to time to the payment (including
any premium) of the principal on the Notes, at maturity or to the purchase
thereof pursuant to a Special Proceeds Offer together with accrued interest, if
any, required to be paid in connection with any such purchase or payment at
maturity as the Company shall request, upon receipt by the Trustee of the
following:
(a) a Board Resolution directing the application pursuant to this
Section 9.05 of a specific amount of the Collateral and, in any case any such
moneys are to be applied to payment, designating the Notes so to be paid and
prescribing the method of purchase, the price or prices to be paid and the
maximum principal (including any premium) amount of Notes of such Series to be
purchased and any other provisions of this Indenture governing such purchase;
(b) an Officers' Certificate dated not more than five days prior to
the date of the relevant application, stating that all conditions precedent and
covenants herein and in the Security Agreement provided for relating to such
application of the Collateral have been complied with; and
(c) an Opinion of Counsel stating that the documents and the amounts
in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts, in
immediately available funds, if any, which have been or are therewith delivered
to and deposited with the Collateral Agent or the Trustee, as the case may be,
for the purposes of payment of the principal (including any premium) and
interest on the Notes at maturity or to purchase thereof pursuant to a Special
Proceeds Offer conform to the requirements of this Indenture and the Security
Agreement and that all conditions precedent herein and in the Security
Agreement provided for relating to such application of Collateral have been
complied with.
Upon compliance with the foregoing provisions of this Section 9.05, the
Trustee shall apply funds released from the Collateral Accounts as directed and
specified by such Board Resolution up to, but not exceeding, the principal
amount (including any premium) of the Notes so paid or purchased together with
accrued interest, if any, required to be paid in connection with any such
purchase or payment at maturity.
A Board Resolution expressed to be irrevocable directing the application of
funds from the Collateral Accounts under this Section 9.05 to the payment of
the principal (including any premium), and accrued interest if any, shall, for
all purposes of this Indenture, be deemed the equivalent of the deposit of
money with the Trustee in trust for such purpose. Such funds from the
Collateral Accounts shall not, after compliance with the foregoing provisions
of this Section 9.05, be deemed to be part of the Collateral.
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ARTICLE 10
REDEMPTION
SECTION 10.01. Notice to Trustee.
If the Company elects to redeem Notes pursuant to paragraph 7 or 8 of the
Notes, it shall notify the Trustee of the redemption date and the principal
amount (not including any premium in respect thereof) of Notes to be redeemed
and the paragraph of the Notes pursuant to which the redemption will occur.
The Company shall give the notices provided for in this Section at least
[40] days before the redemption date (unless a shorter period shall be
satisfactory to the Trustee). Such notice shall be accompanied by an Officers'
Certificate to the effect that such redemption will comply with the conditions
herein. If fewer than all the Notes are to be redeemed, the record date
relating to such redemption shall be selected by the Company and given to the
Trustee, which record date shall be not less than 15 days after the date of
notice to the Trustee.
SECTION 10.02. Selection of Notes to Be Redeemed.
If fewer than all the Notes are to be redeemed, the Trustee shall select
the Notes to be redeemed on a pro rata basis or by lot or by any other method
that complies with applicable legal and securities exchange requirements, if
any, and that the Trustee consider fair and appropriate and in accordance with
methods generally used at the time of selection by fiduciaries in similar
circumstances, provided, however, that no Note of $1,000 in original principal
amount or less shall be redeemed in part. The Trustee shall make the selection
not more than 45 days before the redemption date from outstanding Notes not
previously called for redemption. The Trustee may select for redemption
portions of the principal of Notes that have denominations larger than $1,000.
Notes and portions of them selected by the Trustee shall be in amounts of
$1,000 or whole multiples of $1,000. Provisions of this Indenture that apply
to Notes called for redemption also apply to portions of Notes called for
redemption.
SECTION 10.03. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date, the
Company shall mail a notice of redemption to each Holder whose Notes are to be
redeemed at the address set forth for such Holder on the register referred to
in Section 2.03. Such notice, once delivered by the Company or to the Trustee,
will be irrevocable.
The notice shall identify the Notes to be redeemed and shall state:
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(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(e) if fewer than all the outstanding Notes are to be redeemed, the
aggregate principal amount of the Notes to be redeemed together with the
identification and principal amounts of the particular Notes to be redeemed;
(f) that, unless the Company defaults in making the redemption
payment, interest accrued to the date fixed for redemption and any Additional
Amounts will be paid as specified in the notice and that interest on Notes
called for redemption ceases to accrue on and after the redemption date; and
(g) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's written request, made at least 45 days before a
redemption date, unless a shorter period shall be satisfactory to the Trustee,
the Trustee shall give the notice of redemption provided for in this section in
the Company's name and at its expense.
SECTION 10.04. Effect of Notice of Redemption.
Once notice of redemption is mailed, Notes called for redemption become due
and payable on the redemption date at the redemption price. Upon surrender to
the Paying Agent, such Notes shall be paid at the redemption price stated in
the notice, plus accrued and unpaid interest to the redemption date.
SECTION 10.05. Deposit of Redemption Price.
Prior to 11:00 a.m., eastern standard time, the redemption date, the
Company shall deposit with the Paying Agent (or, if the Company or a Subsidiary
of the Company is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of and accrued and unpaid interest on
all Notes to be redeemed on that date other than Notes or portions of Notes
called for redemption which have been delivered by the Company to the Trustee
for cancellation.
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SECTION 10.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall
execute and the Trustee shall authenticate for the Holder (at the Company's
expense) a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
SECTION 10.07. Optional Redemption for Changes in Withholding Taxes.
The Notes may be redeemed, in whole but not in part, at the option of the
Company, at any time, upon giving of notice as provided in Section 10.03 at a
redemption price equal to 100% of the principal amount at maturity thereof,
together with accrued and unpaid interest to the date fixed by the Company for
redemption, if the Company determines and certifies to the Trustee in an
Officers' Certificate immediately prior to the giving of such notice that, as a
result of any change in, or amendment to, the laws or treaties (including any
regulations or rulings promulgated thereunder) of Bermuda or such other
jurisdiction in which the Company is then organized, as the case may be (or any
political subdivision or taxing authority thereof or therein), affecting
taxation, or any change in official position regarding the application,
interpretation or administration of such laws, treaties, regulations or rulings
(including a holding, judgment or order by a court of competent jurisdiction),
which change, amendment, application, interpretation or administration is
announced or becomes effective on or after the date hereof with respect to any
payment due or to become due under the Notes or this Indenture, the Company is,
or on the next interest payment date would be, required to pay Additional
Amounts on or in respect thereof and such obligation to pay Additional Amounts
cannot be avoided by the taking of reasonable measures by the Company; provided
that no such notice of redemption shall be given earlier than 90 days prior to
the earliest date on which the Company would be obligated to make such
withholding if a payment in respect of the Notes were then due.
Prior to the publication and mailing of any notice of redemption of the
Notes pursuant to Section 10.03, the Company will deliver to the Trustee an
Opinion of Counsel or written advice of a qualified tax expert, such counsel or
tax expert being reasonably acceptable to the Trustee, that the Company has or
will become obligated to pay Additional Amounts as a result of such change,
amendment, application, interpretation or administration.
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ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by any of TIA Section 310 to 317, inclusive, through operation
of TIA Section 318(c), such imposed duties shall control.
SECTION 11.02. Notices.
Any notice or communication shall be in writing and delivered in person, or
mailed by first-class mail (certified, return receipt requested), addressed as
follows:
if to the Company:
AES China Generating Co., Ltd.
3/f(w) Golden Bridge Plaza
No. 1(A) Jianguomenwai Avenue
Beijing, 10020, People's Republic of China
Attention: Chief Financial Officer
if to the Trustee:
Bankers Trust Company
Four Albany Street
New York, New York 10006
Attention: Corporate Trust and Agency Group / Debt Administration
The Company or the Trustee by notice to the others may designate additional
or different addresses for subsequent notices or communications. Any notice to
the Trustee under this Indenture shall be deemed given only when received by
the Trustee at the address specified in this Section 11.02.
Any notice or communication to a Noteholder shall be mailed by first-class
mail to the Noteholder's address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Noteholder or any defect in it
shall not affect its sufficiency with respect to other Noteholders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives
it.
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If the Company mails a notice or communication to Noteholders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 11.03. Communication by Holders with Other Holders.
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
SECTION 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall, if requested by the Trustee,
furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers, all
conditions precedent (including any covenants compliance with which constitutes
a condition precedent), if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel (which
may rely upon an Officers' Certificate as to factual matters), all such
conditions precedent have been complied with.
SECTION 11.05. Statements Required in Certificate or Opinion.
Each Officers' Certificate or Opinion of Counsel with respect to compliance
with a condition or covenant provided for in this Indenture other than
certificates provided pursuant to Section 3.09 shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether or not, in the opinion of such Person,
such
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condition or covenant has been complied with.
SECTION 11.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of
Noteholders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.07. Successors; No Recourse Against Others.
(a) All agreements of the Company in this Indenture and the Notes
shall bind its successor. All agreements of the Trustee in this Indenture
shall bind its successor.
(b) All liability of the Company described in the Notes insofar as it
relates to any director, officer, employee or stockholder, as such, of the
Company is waived and released by each Noteholder.
SECTION 11.08. Duplicate Originals.
The parties may sign any number of copies of this Indenture. One signed
copy is enough to prove this Indenture.
SECTION 11.09. Other Provisions.
The first certificate pursuant to Section 3.09 shall be for the fiscal
year ending in 1996. The reporting date for Section 6.06 is [__________] of
each year. The first reporting date is [____________], 1997.
SECTION 11.10. Governing Law.
The laws of the State of New York govern this Indenture and the Notes,
without regard to the conflicts of laws rules thereof.
SECTION 11.11. Consent to Jurisdiction.
The Company irrevocably submits to the jurisdiction of the United States
District Court for the Southern District of New York, any court in the State of
New York located in the city and county of New York, and any appellate court
from any thereof, in any action, suit or proceeding brought against it and
related to or in connection with the Notes or this Indenture or for recognition
or enforcement of any judgment and the Company
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irrevocably and unconditionally agrees that all claims in respect of any such
suit or action or proceeding may be heard or determined in such New York State
court or, to the extent permitted by law, in such federal court. The Company
agrees that a final judgment in any such action, suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. To the extent permitted by applicable
law, the Company hereby waives and agrees not to assert by way of motion, as a
defense or otherwise in any such suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of such courts, that the suit,
action or proceeding is brought in an inconvenient forum, that the venue of the
suit, action or proceeding is improper or that the Notes or this Indenture or
the subject matter hereof or thereof may not be litigated in or by such courts.
The Company hereby irrevocably appoints and designates The Prentice-Hall
Corporation System, Inc., as its true and lawful attorney and duly authorized
agent for acceptance of service of legal process. The Company agrees that
service of such process upon The Prentice-Hall Corporation System, Inc. at 375
Hudson Street, New York, New York 10014-3660, shall constitute personal service
of such process upon the Company. Nothing contained in this Agreement shall
limit or affect the rights of any party hereto to serve process in any other
manner permitted by law or (other than the Company) to initiate legal
proceedings against the Company or its property in the courts of any
jurisdiction.
SECTION 11.12. Judgment Currency.
If for the purpose of obtaining judgement in any court it is necessary to
convert a sum due hereunder to the Holder of a Note in U.S. dollars into
another currency (the "judgment currency"), the parties hereto agree, to the
fullest extent that they may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures such Holder
could purchase U.S. dollars with the judgment currency in New York City two
Business Days preceding the day on which final judgment is given. The
obligation of the Company in respect of any sum payable by it to the Holder of
a Note hereunder shall, notwithstanding any judgment in a judgment currency
other than U.S. dollars, be discharged only to the extent that on the Business
Day following receipt by such Holder of any sum adjudged to be so due in the
judgment currency, such Holder may in accordance with normal banking procedures
purchase U.S. dollars with the judgment currency; if the amount of the U.S.
dollars so purchased is less than the sum originally due upon the Note, the
Company agrees, as a separate obligation and notwithstanding any such judgment,
to indemnify such Holder against such loss, and if the amount of the U.S.
dollars so purchase exceeds the sum originally due to such Holder, such Holder
agrees to remit to the Company such excess, provided that such Holder shall
have no obligation to remit any such excess as long as the Company shall have
failed to pay such Holder any obligations due and payable under this Indenture
or such Note, in which case such excess may be applied to such obligations of
the Company hereunder in accordance with the terms of this Indenture or such
Note.
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SECTION 11.13. Effect of Headings.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 11.14. Waiver of Immunity.
To the extent that the Company has or hereafter may acquire any immunity
from jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgement, attachment in aid or
execution, or otherwise) with respect to itself or its property, such party
hereby irrevocably waives such immunity in respect of its obligations hereunder
to the extent permitted by applicable law and, without limiting the generality
of the foregoing, agrees that the waivers set forth in this paragraph shall
have effect to the fullest extent permitted under the Foreign Sovereign
Immunities Act of 1976 of the United States and are intended to be irrevocable
for purposes of such Act.
SECTION 11.15. Tax Considerations.
It is the intention of the Company that for U.S. Federal, state and local
income tax purposes: (i) neither the Noteholders nor the Trustee shall be at
any time the owner of the Collateral for U.S. Federal, state or local tax
purposes and (ii) the trust estate created hereby is intended solely to be a
security arrangement and not a trust and neither the Trustee nor the
Noteholders shall file any returns, reports or other documents or take any
position inconsistent therewith for U.S. Federal, state or local tax law
purposes.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as set forth on the first page hereof.
[SEAL] AES CHINA GENERATING CO. LTD.
By:
-----------------------------
Name:
Title:
Attest:
- -----------------------------------
BANKERS TRUST COMPANY,
as Trustee
By:
-----------------------------
Name:
Title:
Attest:
- -----------------------------------
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EXHIBIT A
(Form of Face of Note)
[The following two paragraphs are to be reproduced on the Global Note.]
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company (as
defined below) or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co., or such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co., or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein. Unless and until it is
exchanged in whole or in part for Notes in definitive registered form, this
certificate may not be transferred except as a whole by DTC to a nominee of DTC
or by a nominee of DTC to DTC or another nominee of DTC or by DTC or any such
nominee to a successor Depositary or a nominee of such successor Depositary.
AES CHINA GENERATING CO. LTD.
[__]% Notes Due 2006
$180,000,000
No.
CUSIP No.: 000983 AA 4
AES China Generating Co. Ltd., a corporation organized under the laws of
Bermuda (the "Company"), promises to pay to Cede & Co., or registered assigns,
the principal sum of One Hundred Eighty Million United States dollars
(US$180,000,000) on [______], 2006.
Interest Payment Dates: and
Record Dates: and
Additional provisions of this Note are set forth on the reverse hereof. Such
provisions shall for all purposes have the same effect as though fully set
forth at this place.
This Note shall not be valid or obligatory until the certificate of
authentication hereon shall have been duly signed by the Trustee acting under
the Indenture.
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<PAGE> 93
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers under its corporate seal.
Date: December __, 1996
AES CHINA GENERATING CO. LTD.
By: _________________________
(SEAL) Name:
Title:
By: _________________________
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION:
BANKERS TRUST COMPANY, as Trustee,
certifies that this is one
of the Notes
referred to in the Indenture.
By: _________________________
Authorized Signature
A-2
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(Form of Reverse of Note)
AES CHINA GENERATING CO. LTD.
[__]% Notes Due 2006
(1) Indenture. The Note is one of a duly authorized issue of debt
securities (the "Notes") of the Company limited to $180,000,000 in aggregate
principal amount issued under an Indenture dated as of December __, 1996 (the
"Indenture") among the Company and Bankers Trust Company, a New York banking
Corporation, as trustee (the "Trustee"). The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939 (15 U.S. Code Section Section 77aaa-77bbbb)
(the "TIA"). Capitalized terms used herein but not defined are used as defined
in the Indenture. The Notes are subject to all such terms, and Noteholders are
referred to the Indenture and the TIA for a statement of such terms.
(2) Ranking. The Notes rank at least pari passu in right of payment with
all existing and future unsecured Indebtedness of the Company.
(3) Security Agreement. As provided in the Security Agreement, the
Company's obligations under the Indenture and the Notes are secured by a first
priority security interest in all amounts on deposit in the Collateral Accounts
granted in favor of Bankers Trust Company, as collateral agent (the "Collateral
Agent"), for the benefit of the Trustee on behalf of the Noteholders. The
rights of the Trustee in and to the Collateral are governed by the terms of the
Security Agreement.
(4) Interest. The Company promises to pay interest on the principal
amount of this Note at the rate per annum shown above. The Company will pay
interest semiannually on ______ and ______ of each year to Holders of record on
______ and ______ of each year, respectively. Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from ______ ___, 1996. Interest will be computed on
the basis of a 360-day year consisting of twelve 30-day months.
(5) Method of Payment. The Company will pay interest on the Notes (except
defaulted interest) to the persons who are registered Holders of Notes at the
close of business on the record date next preceding the interest payment date
even though Notes are canceled after the record date and on or before the
interest payment date. Holders must surrender Notes to a Paying Agent to
collect principal payments. The Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Company may pay
A-3
<PAGE> 95
principal and interest by check payable in such money. It may mail an interest
check to a Holder's registered address.
(6) Paying Agent, Registrar. Initially, Bankers Trust Company, a New York
banking corporation, will act as Paying Agent and Registrar. The Company may
change any Paying Agent or Registrar without notice. The Company may act as
Paying Agent or Registrar.
(7) Optional Redemption. Except as set forth in the following paragraph,
the Company may not redeem the Notes prior to [_____], 2001. On and after such
date, the Company may redeem the Notes at any time, in whole, or from time to
time in part, at the following redemption prices (expressed in percentages of
principal amount), plus accrued interest to the redemption date, if redeemed
during the 12-month period beginning [_____]:
<TABLE>
<CAPTION>
Year Redemption Price
<S> <C>
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [___]%
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [___]%
2003, and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.00%
</TABLE>
(8) Optional Redemption for Changes in Withholding Taxes. The Notes may
be redeemed, in whole but not in part, at the option of the Company, at any
time, at a redemption price equal to 100% of the principal amount at maturity
thereof, together with accrued and unpaid interest to the date fixed by the
Company for redemption, if as a result of any change in, or amendment to, the
laws or treaties (including any regulations or rulings promulgated thereunder)
of Bermuda or such other jurisdiction in which the Company is then organized,
as the case may be (or any political subdivision or taxing authority thereof or
therein), affecting taxation, or any change in official position regarding the
application, interpretation or administration of such laws, treaties,
regulations or rulings (including a holding, judgment or order by a court of
competent jurisdiction), which change, amendment, application, interpretation
or administration is announced or becomes effective on or after the Date hereof
with respect to any payment due or to become due under the Notes or the
Indenture, the Company is, or on the next interest payment date would be,
required to pay Additional Amounts on or in respect thereof.
(9) Additional Amounts. All payments of principal and interest in respect
of each Note shall be made free and clear of, and without withholding or
deduction for, any taxes, duties, assessments or governmental charges of
whatever nature imposed, levied, collected, withheld or assessed by or within
Bermuda or any other jurisdiction in which the Company is organized or any
authority therein or thereof having power to tax or from
A-4
<PAGE> 96
which any payment is made with respect to the Notes, unless such withholding or
deduction is required by law or by regulation or governmental policy having the
force of law. In the event that any such withholding or deduction in respect
of principal or interest is so required, the Company shall pay such additional
amounts ("Additional Amounts") as will result in receipt by each Holder of any
Note of such amounts as would have been received by such Holder or the
beneficial owner with respect to such Note had no such withholding or deduction
been required, except for certain limited circumstances as set forth in Section
3.06 of the Indenture.
(10) Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder of
Notes to be redeemed at the address set forth for such Holder on the register
referred to in Section 2.03 of the Indenture. Unless the Company shall default
in payment of the redemption price plus accrued interest, on and after the
redemption date interest ceases to accrue on such Notes or portions of them
called for redemption. Notes in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000.
(11) Denominations; Transfer; Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and whole multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes
and fees required by law or permitted by the Indenture. The Registrar need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption (except, in the case of a Note to be redeemed in part, the portion
thereof not to be redeemed) or for a period of 15 days before a selection of
Notes to be redeemed or 15 days before an interest payment date.
(12) Change of Control Offer. The Indenture provides that in the event of
a Change of Control Triggering Event (as defined therein), the Company shall
make an offer to purchase the Notes then outstanding at a purchase price of not
less that 101% of the principal amount thereof (excluding any premium) plus
accrued and unpaid interest on the terms set forth in the Indenture.
(13) Excess Proceeds Offer. To the extent of the balance of the Net
Available Cash (each, as defined therein) after application thereof after
certain Asset Sales in accordance with the Indenture, the Company shall make an
offer to purchase the Notes at a purchase price of not less than 100% of the
principal amount (excluding any premium) plus accrued and unpaid interest
pursuant and subject to the conditions set forth in the Indenture.
(14) Special Proceeds Offer. The Indenture provides that the Company
shall, within 30 days after the occurrence of any Special Proceeds Event (as
defined therein), cause all Special Proceeds with respect to such Special
Proceeds Event to be deposited
A-5
<PAGE> 97
into a Collateral Account with the Collateral Agent and the Company shall, to
the extent of the amounts on deposit in the Special Proceeds collateral
account, subject to certain exceptions, make an offer to purchase the Notes at
a purchase price of not less that 101% of the principal amount (excluding any
premium) plus accrued and unpaid interest pursuant and subject to the
conditions set forth in the Indenture.
(15) Defeasance. Subject to certain conditions, the obligations under the
Notes and the Indenture may be terminated, at any time, if the Company deposits
with the Trustee money and/or U.S. Government Obligations for the payment of
principal and interest on the Notes to redemption or maturity, as the case may
be.
(16) Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes, except that interest (other than defaulted
interest) will be paid to the person that was the registered Holder on the
relevant record date for such payment of interest.
(17) Amendments and Waivers. Subject to certain exceptions, (i) the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of a majority in principal amount of the Notes; and (ii) any existing
default may be waived with the consent of the Holders of a majority in
principal amount of the Notes. Without the consent of any Noteholder, the
Indenture or the Notes may be amended or supplemented to cure any ambiguity,
omission, defect or inconsistency, to provide for assumption of Company's
obligations to Noteholders, to provide for uncertificated Notes in addition to
or in place of certificated Notes (subject to certain conditions), to provide
for additional guarantees with respect to the Notes or to further secure the
Notes, to add additional covenants or surrender any of the Company's rights, to
comply with the requirements of the Commission in connection with qualification
under the TIA, to establish or maintain the Liens of the Security Agreement or
to make any change that does not adversely affect the rights of any Noteholder.
(18) Remedies. If an Event of Default occurs and is continuing, the
Trustee or Holders of at least 25% in principal amount of the Notes may declare
all the Notes to be due and payable immediately. Noteholders may not enforce
the Indenture or the Notes except as provided in the Indenture. The Trustee
may require an indemnity before it enforces the Indenture or the Notes.
Subject to certain limitations, Holders of a majority in principal amount of
the Notes may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Noteholders notice of any continuing default (except
a Default in payment of principal or interest) if it determines that
withholding notice is in their interest. The Company must furnish an annual
compliance certificate to the Trustee.
(19) No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of
A-6
<PAGE> 98
the Company under the Notes or the Indenture or for any claim based thereon or,
in respect thereof. Each Noteholder by accepting a Note waives and releases
all such liability. The waiver and release are part of the consideration for
the issue of the Notes.
(20) Authentication. This Note shall not be valid until authenticated by
the manual signature of an authorized signatory of the Trustee or an
authenticating agent thereof.
(21) Abbreviations. Customary abbreviations may be used in the name of a
Noteholder or an assignee, such as: TEN COM (= tenants in common), TENANT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts
to Minors Act).
Pursuant to a recommendation promulgated by the Committee on Uniform Note
Identification Procedures the Company has caused CUSIP numbers to be printed on
the Notes and has directed the Trustee to use CUSIP numbers in notices of
redemption as a convenience to Noteholders. No representation is made as to
the accuracy of such numbers either as printed on the Notes or as contained in
any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
THE COMPANY WILL FURNISH TO ANY NOTEHOLDER UPON WRITTEN REQUEST AND WITHOUT
CHARGE A COPY OF THE INDENTURE, WHICH HAS IN IT THE TEXT OF THIS NOTE. REQUESTS
MAY BE MADE TO: AES CHINA GENERATING CO. LTD., 9/F., ALLIED CAPITAL RESOURCES
BLDG., 32-38 ICE HOUSE STREET, CENTRAL, HONG KONG, ATTN.: CHIEF FINANCIAL
OFFICER.
A-7
<PAGE> 99
<TABLE>
______________________________________________________________________________________________
ASSIGNMENT FORM
<S> <C>
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________________________
________________________________________________________________________________________________
________________________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint agent to transfer this Note on the books of the
Company. The agent may substitute another to act for him.
________________________________________________________________________________________________
Date: ____________________________________ Signed: _________________________________________
(Sign exactly as your name appears on the
other side of this Note)
Signature Guarantee:____________________________________________________________________________
________________________________________________________________________________________________
________________________________________________________________________________________________
</TABLE>
OPTION OF HOLDER TO ELECT PURCHASE FORM
If you wish to elect to have this Note purchased by the Company pursuant
to Section 3.08 or 3.12 of the Indenture, check this box: [ ]
If you wish to elect to have only part of this Note purchased by the
Company pursuant to Section 3.08 or 3.12 of the Indenture, state the amount:
$____________
A-8
<PAGE> 100
* As set forth in the Indenture, any purchase pursuant to Section 3.08 or
3.12 is subject to proration in the event the offer is oversubscribed.
<TABLE>
<S> <C>
Dated: _________________________________ Signed:_______________________________________________________
_______________________________________________________
(Sign exactly as your name appears on the
other side of this Note)
Signature Guarantee: ____________________________________________________________________________________________
</TABLE>
A-9
<PAGE> 1
EXHIBIT 4.3
SECURITY AGREEMENT
among
AES CHINA GENERATING CO. LTD.,
BANKERS TRUST COMPANY,
as Trustee
and
BANKERS TRUST COMPANY,
as Collateral Agent
______________________________
Dated as of December __, 1996
______________________________
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.03. Generic Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 2
THE COLLATERAL
SECTION 2.01. Grant of Security Interest in the Collateral . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.02. Priority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.03. The Secured Party's Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.04. No Transfer of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.05. Perfection of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.06. Maintenance of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.07. Termination Date and Release of Rights . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 3
THE COLLATERAL ACCOUNTS
SECTION 3.01. Establishment of the Collateral Accounts . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.02. Deposits in the Collateral Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.03. Maintenance of the Debt Service Reserve Account . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.04. Investment of Funds in the Collateral Accounts . . . . . . . . . . . . . . . . . . . 10
SECTION 3.05. General Provisions Regarding the Collateral Accounts . . . . . . . . . . . . . . . . 11
SECTION 3.06. Distributions from the Debt Service Reserve Account . . . . . . . . . . . . . . . . . 12
SECTION 3.07. Distribution from the Special Proceeds Account. . . . . . . . . . . . . . . . . . . . 12
ARTICLE 4
COVENANTS OF THE COMPANY
SECTION 4.01. Preservation of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.02. Opinions as to Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.04. Waiver of Stay or Extension Laws; Marshaling of Assets . . . . . . . . . . . . . . . 14
SECTION 4.05. Noninterference, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.06. Company Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 5
REMEDIES ON OCCURRENCE OF AN INDENTURE DEFAULT
SECTION 5.01. Liquidation and Sale of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 5.02. Waiver of an Indenture Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.03. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.04. No Remedy Exclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 6
THE SECURED PARTY
SECTION 6.01. Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6.02. Secured Party's Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6.03. Degree of Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 7
THE COLLATERAL AGENT
SECTION 7.01. Appointment and Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 7.02. Performance of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 7.03. Limitation on Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 7.04. Reliance upon Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 7.05. Successor Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.06. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7.07. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7.08. Representations and Warranties of the Collateral Agent . . . . . . . . . . . . . . . 22
SECTION 7.09. Waiver of Set-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 8
MISCELLANEOUS
SECTION 8.01. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 8.02. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 8.03. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 8.04. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 8.05. Notices; Payments and Transfers of Funds . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 8.06. Terms of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 8.07. Assignment; Third-Party Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 8.08. Consent of Secured Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 8.09. Trial by Jury Waived . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 8.10. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 8.11. Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 8.12. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 8.13. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
ii
<PAGE> 4
SECURITY AGREEMENT, dated as of December __, 1996, among AES China
Generating Co. Ltd., a corporation organized under the laws of Bermuda (the
"Company"), Bankers Trust Company, a New York banking corporation, in its
capacity as Trustee (as defined below) under the Indenture (as defined below),
and Bankers Trust Company, a New York banking corporation, in its capacity as
collateral agent (the "Collateral Agent").
R E C I T A L S
WHEREAS, the Company proposes to issue U.S.$180,000,000 aggregate
principal amount of its ___% Notes due 2006 (the "Notes");
WHEREAS, the Notes are being issued pursuant to an Indenture, dated as
of the date hereof (as amended or supplemented from time to time in accordance
with the terms thereof, the "Indenture"), among the Company and Bankers Trust
Company, as trustee (together with its permitted successors thereunder and any
successor trustee appointed pursuant to the provisions thereof, the "Trustee");
WHEREAS, as security for the payment and performance of all of the
obligations of the Company now or hereafter existing under this Agreement, the
Notes and the Indenture, the Company has agreed to grant a security interest in
all of its right, title and interest in and to the Collateral (as defined
herein) on the terms and conditions set forth herein.
A G R E E M E N T S
NOW THEREFORE, in consideration of the premises, and for other good
and valuable consideration, the adequacy, receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree for the benefit of the Trustee on
behalf of the Noteholders as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. Capitalized terms used herein without
definition are used as defined in the Indenture. In addition, the following
terms shall have the following meanings:
"APPROVED DEPOSITARY" means The Depository Trust Company and its
successors.
1
<PAGE> 5
"AUTHORIZED OFFICERS" means (i) with respect to the Company,
Authorized Officers as defined in the Indenture and (ii) with respect to the
Trustee or the Collateral Agent, Trust Officers as defined in the Indenture.
"CLOSING DATE" means December __, 1996.
"COLLATERAL ACCOUNTS" means the Debt Service Reserve Account and the
Special Proceeds Account.
"COLLATERAL AGENT" means Bankers Trust Company in its capacity as
collateral agent on behalf of the Secured Party, including its successors in
interest, until a successor Person shall have become the Collateral Agent
pursuant to Section 7.05, and thereafter "Collateral Agent" shall mean such
successor Person.
"COLLATERAL MANAGEMENT RIGHTS" means the powers and rights granted to
the Secured Party in Section 6.02.
"DEBT PAYMENT RESERVE" means, on any date, an amount equal to the
aggregate amount of interest due and payable on the Notes on the next
succeeding Interest Payment Date.
"DOLLAR," "DOLLAR" and "$" means the lawful currency of the United
States.
"ELIGIBLE ACCOUNT" means a Dollar denominated demand deposit account
that (i) is maintained with a depository institution or trust company, the
principal offices of which are located in the Borough of Manhattan, The City
and State of New York, and which is organized and existing under the laws of
the United States or the State of New York and subject to supervision and
examination by U.S. federal or New York State banking authorities and the
long-term unsecured debt obligations of which are assigned a rating of "A-" or
higher by S&P and "A3" or higher by Moody's or the short-term unsecured debt
obligations of which are assigned a rating of "A-1" by S&P and "P-1" by
Moody's or (ii) is a segregated Dollar denominated trust account with the
Collateral Agent.
"ENFORCEMENT EXPENSES" means all reasonable costs, expenses,
attorneys' fees and disbursements, accountants' fees and disbursements, fees
and disbursements of financial and technical advisors and all other sums
expended or incurred by the Collateral Agent in connection with the exercise of
any duty, obligation, right, power, option, privilege or remedy under this
Agreement, including, without limitation, in connection with (i) the protection
or preservation of any Collateral, (ii) any action, litigation or proceeding
relating to any of the Collateral, and (iii) the foreclosure on, and
acquisition or sale of, the Collateral or any portion thereof.
2
<PAGE> 6
"INDENTURE DEFAULT" means "EVENT OF DEFAULT" as defined in the
Indenture.
"INTERIM RESERVE" means an amount equal to all scheduled payments of
interest on the Notes due and payable on or prior to July __, 1998.
"LIQUIDATION PROCEEDS" means all cash or other property received by
the Collateral Agent (without making any deduction for Enforcement Expenses)
which represents proceeds from the sale or other disposition of any of the
Collateral.
"NOTEHOLDER" means the registered holder of any Note pursuant to the
terms thereof and the Indenture.
"PAYMENT DATE" means any date on which interest on the Notes is due
and payable.
"PRC" means the Peoples's Republic of China.
"SECURED PARTY" means the Trustee, acting for the benefit of the
Noteholders, the Trustee in its individual capacity and the Collateral Agent,
as their respective interests may appear.
"SECURITY INTEREST" means the Lien on and security interest in the
Collateral granted pursuant to Section 2.01(a).
"TERMINATION DATE" means the earlier of (i) the date on which all
amounts payable on the Notes and pursuant to the Indenture and this Agreement
have been paid in full and (ii) the date on which the Company shall have
satisfied the provisions of Section 7.03 or 7.04 of the Indenture.
"U.S." or "UNITED STATES" means the United States of America.
"UNCERTIFICATED U.S. GOVERNMENT SECURITY" means any Dollar Permitted
Investment which is issued in the form of an entry made on the records of a
Federal Reserve Bank.
3
<PAGE> 7
SECTION 1.02. Other Definitions.
<TABLE>
<CAPTION>
Terms Defined in Section
----- ------------------
<S> <C>
Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Debt Service Reserve Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.01
Dollar Permitted Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.04
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Maturing Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.04
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.05
Secured Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
Secured Party's Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
Special Proceeds Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.01
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
</TABLE>
SECTION 1.03. Generic Terms. The terms "hereof," "herein" or
"hereunder," unless otherwise modified by more specific reference, shall refer
to this Agreement in its entirety. Unless otherwise indicated in context, the
terms "Article" or "Section" shall refer to an Article or Section of this
Agreement. The definition of a term shall include the singular, the plural,
the past, the present, the future, the active and the passive forms of such
term.
ARTICLE 2
THE COLLATERAL
SECTION 2.01. Grant of Security Interest in the Collateral.
(a) In order to secure the full and punctual payment of, and the
performance of all of the Secured Obligations owing from time to time to the
Secured Party in accordance with the terms thereof, the Company hereby assigns,
grants, pledges, transfers and conveys to the Collateral Agent, on behalf of
and for the benefit of the Secured Party, all of its right, title and interest,
including, to the fullest extent permitted by law, all rights, powers and
options (but none of the obligations, except to the extent required by law) in
and to, and hereby grants to the Collateral Agent, on behalf of and for the
benefit of the Secured Party a lien on, and security interest in, all of such
party's right, title and interest in and to the following assets (all being
collectively referred to as the "Collateral"):
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(i) the Collateral Accounts and all amounts on
deposit therein at any time, including all amounts deposited therein
on the Closing Date;
(ii) all of the Company's right, title and
interest in and to investments (including Dollar Permitted
Investments) made with proceeds of the property described in clause
(i) above or made with amounts on deposit in the Collateral Accounts;
and
(iii) all distributions, revenues, products,
substitutions, benefits, profits and proceeds, in whatever form, of
any of the foregoing including, without limitation, any monies,
agreements or securities received by the Collateral Agent in
accordance with Section 7.02 or 7.03 of the Indenture.
(b) In order to effectuate the provisions and purposes of this
Agreement, including the perfection of the Security Interest in the Collateral
granted pursuant to Section 2.01(a), the Company shall take such steps as are
necessary or reasonably requested by the Collateral Agent or the Secured Party
for the preservation, protection, perfection, maintenance or continuation of
such Security Interest, including, but not limited to, the execution and filing
of appropriate financing statements or notices regarding the granting of a Lien
on the Collateral in the United States, Hong Kong, the PRC or Bermuda.
SECTION 2.02. Priority. The Company intends the Security Interest in
favor of the Secured Party to be prior to all other Liens in respect of the
Collateral and will take all actions necessary to obtain and maintain, in favor
of the Collateral Agent, for the benefit of the Secured Party, a first priority
lien on, and a first priority perfected security interest in, the Collateral.
Subject to the provisions hereof specifying the rights and powers of the
Secured Party from time to time to control certain specified matters relating
to the Collateral, the Secured Party shall have all of the rights, remedies and
resources with respect to the Collateral afforded a secured party under the
Uniform Commercial Code of the State of New York and all other applicable law
in addition to, and not in limitation of, the other rights, remedies and
recourse granted to the Secured Party by this Agreement or any other law
relating to the creation and perfection of liens on, and security interests in,
the Collateral.
SECTION 2.03. The Secured Party's Interest. The "Secured Party's
Interest" shall mean the interest of the Trustee in the Collateral, to secure
the full and punctual payment of all amounts from time to time owing by the
Company to the Noteholders, the Trustee and the Collateral Agent, and the
performance by the Company of all of its other obligations from time to time
owing to the Noteholders, the Trustee, and the Collateral Agent under this
Agreement, the Notes and the Indenture (collectively, the "Secured
Obligations") including, without duplication, the following:
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(a) the payment of the principal of the Notes, together with all
interest and Additional Amounts, if any, thereon and any other amounts payable
with respect thereto as provided therein or in the Indenture;
(b) the payment of all other amounts payable to, and the performance
of all other obligations owing to, the Noteholders, the Trustee and the
Collateral Agent pursuant to the terms of this Agreement, the Notes and the
Indenture, including, without limitation, all reasonable costs, expenses,
attorneys' fees and disbursements, accountants' fees and disbursements and
other sums, fees and disbursements expended or incurred by the Trustee or any
of its officers, directors, employees or agents (including the Collateral
Agent) in connection with the exercise by the Trustee or any such officers,
directors, employees or agents, pursuant to this Agreement, the Notes or the
Indenture, of any duty, obligation, right, power, option, privilege or remedy
as collateral assignee of the Collateral, hereunder or under the Notes, to the
extent not previously recovered by the Trustee, including, without limitation,
all reasonable attorneys' fees and expenses and all other reasonable and
necessary amounts paid or advanced from time to time by the Trustee or any of
its agents (A) in connection with (1) the protection or preservation of the
Security Interest, (2) the enforcement of any rights or remedies hereunder or
under the Notes and (3) any action, litigation or proceeding relating to this
Agreement or the Notes, or the Collateral or any portion thereof; and (B) by
reason of or in connection with the acquisition, ownership or sale of the
Collateral or any portion thereof.
The Secured Party's Interest, and all right, title and interest of the
Secured Party in, to and under the Collateral and this Agreement shall continue
until terminated pursuant to Section 2.07.
SECTION 2.04. No Transfer of Duties. The Security Interest is granted
as security only and shall not impose any obligation on the Secured Party or
the Collateral Agent to perform or observe any term, covenant, condition or
agreement of the Company herein or with respect to any of the Collateral or
impose any liability on the Secured Party or the Collateral Agent for any act
or omission on the part of the Company relating hereto or thereto or for any
breach of any representation or warranty on the part of the Company contained
herein or therein or made in connection herewith or therewith.
SECTION 2.05. Perfection of Security Interest.
(a) Upon each investment of funds in the Collateral Accounts in
Dollar Permitted Investments which consist of Uncertificated U.S. Government
Securities, the Collateral Agent shall cause such Uncertificated U.S.
Government Securities to be held by the Collateral Agent as Collateral under
this Agreement.
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(b) Upon each investment of funds in the Collateral Accounts in
Dollar Permitted Investments other than Uncertificated U.S. Government
Securities or securities which have been deposited with an Approved Depositary,
the Collateral Agent shall (i) cause the securities or other instruments
evidencing such Dollar Permitted Investments (A) in the case of instruments, to
be issued in the name of the Collateral Agent or its nominee and (B) to be
delivered to the Collateral Agent either in suitable form for transfer by
delivery or accompanied by duly executed instruments of transfer or assignment
in blank, with signatures appropriately guaranteed, to be held by the
Collateral Agent as Collateral under this Agreement, and (ii) in the case of
any Dollar Permitted Investment described in clause (c) of the definition
thereof, (A) cause the securities underlying such obligation to be delivered to
the Collateral Agent either in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or assignment in blank,
with signatures appropriately guaranteed, to be held by the Collateral Agent as
Collateral under this Agreement, and (B) notify the counterparty to such
obligation that such obligation is subject to the Lien of this Agreement.
(c) Upon each investment of funds in the Collateral Accounts in
Dollar Permitted Investments which have been deposited with an Approved
Depositary, the Collateral Agent shall cause the Approved Depositary to make
appropriate entries to the account of the Collateral Agent on the books of such
Approved Depositary to reflect the transfer of all securities which have been
deposited with such Approved Depositary to the Collateral Agent and to deliver
to the Collateral Agent a written confirmation of the book-entry transfer of
such securities into such account, to be held by the Collateral Agent as
Collateral under this Agreement.
(d) If required for the validity or perfection of the Security
Interest herein, on or prior to the Closing Date, the Company shall file in
Bermuda any registration statements that are necessary in connection with the
execution and delivery of this Agreement and the granting and perfection of the
Security Interest hereunder. The Company shall promptly notify the Collateral
Agent of any filings made pursuant to this Section 2.05(d) and deliver to the
Collateral Agent copies of such filings pursuant to the notice provisions set
forth in Section 8.05.
SECTION 2.06. Maintenance of Collateral.
(a) Safekeeping by the Collateral Agent. The Collateral Agent
agrees to maintain all Collateral received by it and all records and documents
relating thereto at the office of the Collateral Agent specified in Section
8.05. The Collateral Agent shall keep all Collateral and documentation related
thereto in its possession separate and apart from all other property that it is
holding in its possession and from its own
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general assets and shall maintain accurate records pertaining to the Dollar
Permitted Investments, the Collateral Accounts and all other Collateral in such
a manner as shall enable the Secured Party and the Company to verify the
accuracy of such record keeping. The Collateral Agent's books and records
shall at all times show that the Collateral in its possession is held by the
Collateral Agent as agent of the Secured Party and is not the property of the
Collateral Agent. The Collateral Agent will promptly report to the Trustee and
the Company any failure on its part to hold the Collateral as provided in this
subsection 2.06(a) and will promptly take appropriate action to remedy any such
failure.
(b) Access. The Collateral Agent shall permit each of the Company
and the Trustee, or its duly authorized representatives, attorneys, auditors or
designees, to inspect the Collateral in the possession of or otherwise under
the control of the Collateral Agent pursuant hereto at such reasonable times
during normal business hours as the Company or the Trustee may reasonably
request with prior written notice.
SECTION 2.07. Termination Date and Release of Rights. On the
Termination Date, the rights, remedies, powers, duties, authority and
obligations conferred on the Collateral Agent and the Secured Party pursuant to
this Agreement shall terminate and be of no further force and effect, and all
rights, remedies, powers, duties, authority and obligations of the Collateral
Agent and the Secured Party with respect to the Collateral shall be
automatically released. On the Termination Date, the Collateral Agent and the
Trustee will, at the expense of the Company, (i) execute such instruments of
transfer and release, in recordable form if necessary, in favor of the Company
as the Company may reasonably request, (ii) deliver any Collateral in its
possession to the Company or its designee, and (iii) otherwise transfer and
release the lien of this Agreement and transfer and release and deliver to the
Company or its designee the Collateral.
ARTICLE 3
THE COLLATERAL ACCOUNTS
SECTION 3.01. Establishment of the Collateral Accounts.
(a) Debt Service Reserve Account. The Collateral Agent shall, on or
prior to the Closing Date, establish, in the Borough of Manhattan, The City and
State of New York, a segregated account, which shall be an Eligible Account,
designated "Debt Service Reserve Account - Bankers Trust Company, as Collateral
Agent under the Security Agreement dated as of December __, 1996 with AES China
Generating Co. Ltd., et al." (the "Debt Service Reserve Account"). The
Collateral Agent shall not commingle funds in the Debt Service Reserve Account
with any other moneys and
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shall hold all moneys deposited from time to time in the Debt Service Reserve
Account and all investments made with such moneys as part of the Collateral.
(b) Special Proceeds Account. Prior to the delivery to it by the
Company of any Special Proceeds, the Collateral Agent shall establish, in the
Borough of Manhattan, The City and State of New York, a segregated account,
which shall be an Eligible Account, designated "Special Proceeds Account
- -Bankers Trust Company, as Collateral Agent under the Security Agreement dated
as of December __, 1996 with AES China Generating Co. Ltd., et al." (the
"Special Proceeds Account"). The Collateral Agent shall not commingle funds in
the Special Proceeds Account with any other moneys and shall hold all moneys
deposited in the Special Proceeds Account and all investments made with such
moneys as part of the Collateral.
SECTION 3.02. Deposits in the Collateral Accounts.
(a) On the Closing Date, the Company shall transfer to the
Collateral Agent from the net proceeds of the sale of the Notes for deposit by
the Collateral Agent in the Debt Service Reserve Account an amount equal to the
Interim Reserve and the Debt Payment Reserve. Thereafter, the Collateral Agent
shall deposit in the Debt Service Reserve Account all interest, principal and
premium payments from Dollar Permitted Investments made by the Collateral Agent
with respect to the Collateral held in the Debt Service Reserve Account.
(b) The Company shall transfer an amount equal to Special Proceeds
to the Collateral Agent for deposit in the Special Proceeds Account. If the
Company receives any Special Proceeds, such proceeds shall be deemed to have
been received in trust for the benefit of the Collateral Agent and shall be
transferred to the Collateral Agent for deposit in the Collateral Accounts as
soon as practicable. Thereafter, the Collateral Agent shall deposit in the
Special Proceeds Account all interest, principal and premium payments from
Dollar Permitted Investments made by the Collateral Agent with respect to the
Collateral held in the Special Proceeds Account.
SECTION 3.03. Maintenance of the Debt Service Reserve Account. From
the Closing Date until July __, 1998, the Company shall maintain on deposit
with the Collateral Agent an amount in the Debt Service Reserve Account in
Dollars at least equal to the sum of (i) the Interim Reserve, less the
aggregate amount of interest paid to Holders on all prior Interest Payment
Dates, and (ii) the Debt Payment Reserve. After July__, 1998, and on or prior
to the Stated Maturity of the Notes, the Company shall be required to maintain
on deposit in the Debt Service Reserve Account an amount in Dollars at least
equal to the Debt Payment Reserve except that if funds in the Debt Service
Reserve Account have been withdrawn by the Collateral Agent and paid to the
Trustee to pay interest due on any Interest Payment Date, the Company
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shall have a period of 90 days after any Interest Payment Date to make
additional deposit into the Debt Service Reserve Account such that the balance
on deposit therein is at least equal to the Debt Payment Reserve.
SECTION 3.04. Investment of Funds in the Collateral Accounts.
(a) So long as no Indenture Default shall have occurred and be
continuing, all funds in the Collateral Accounts shall be invested and
reinvested by the Collateral Agent in Dollar Permitted Investments in
accordance with written instructions given to the Collateral Agent by the
Company or, in the absence of such instructions, in the types of obligations as
set forth in clause (a) of the definition of "Dollar Permitted Investments" in
the Indenture, provided, however, that if any Indenture Default shall have
occurred and be continuing, the Collateral Agent shall invest funds in the
Collateral Accounts in Dollar Permitted Investments only in accordance with the
written instructions of the Trustee. If no written direction with respect to
the Collateral Accounts is received by the Collateral Agent during any period
in which an Indenture Default has occurred and is continuing, investment of
funds in the Collateral Accounts shall be made in the types of Dollar Permitted
Investments that were held by the Collateral Agent immediately prior to the
occurrence of such Indenture Default. All income or other gain from the
investment of moneys deposited in each Collateral Account shall be deposited in
such Collateral Account immediately upon receipt, and any loss resulting from
the investment of moneys deposited in either Collateral Account shall be
charged to such Collateral Account. Each investment made in the Debt Service
Reserve Account pursuant to this Section 3.04(a) on any date shall mature not
later than the Payment Date next succeeding the day such investment is made;
provided, that if, on the date of any investment, the Collateral Agent holds in
the Debt Service Reserve Account Dollar Permitted Investments maturing not
later than the next succeeding Payment Date ("Maturing Securities") and the
aggregate principal and interest payable on such Maturing Securities would be
sufficient to pay all amounts due on the Secured Obligations on such Payment
Date, the Collateral Agent shall invest any remaining funds in the Debt Service
Reserve Account in Dollar Permitted Investments which mature not later than the
next succeeding Payment Date for which Maturing Securities are insufficient to
pay all amounts then due on the Secured Obligations.
(b) Prior to or contemporaneously with the making of any investment
pursuant to Section 3.01(a), the Collateral Agent shall take such steps as may
be necessary to comply with the applicable provisions of Section 2.05.
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SECTION 3.05. General Provisions Regarding the Collateral Accounts.
(a) Promptly upon the establishment (initially or upon any
relocation) of the Debt Service Reserve Account and the Special Proceeds
Account, the Collateral Agent shall advise the Company and the Trustee in
writing of the name of the officer of such depository institution who is
responsible for overseeing such Collateral Account, the Collateral Account
number and the individuals whose names appear on the signature cards for such
Collateral Account, if applicable.
(b) Prior to the deposit of any funds therein pursuant hereto, the
Company shall cause each depository institution with which a Collateral Account
is established (including the Collateral Agent) to execute and deliver to the
Trustee an irrevocable written agreement, in form and substance satisfactory to
the Trustee, waiving, to the extent permitted under applicable law, (i) any
banker's or other statutory or similar Lien and (ii) any right of set-off or
other similar right under applicable law with respect to the Collateral Account
held by it and agreeing to notify the Company, the Collateral Agent and the
Trustee of any charge or claim against or with respect to the Collateral
Account held by it. The Collateral Agent shall give the Company and the
Trustee prior written notice of any change in the depositary institution in
which any Collateral Account is established or in any related Collateral
Account information. Anything herein to the contrary notwithstanding, unless
consented to by the Trustee in advance and in writing, the Collateral Agent
shall not have any right to change the depositary institution in which any
Collateral Account is established.
(c) On or before each Payment Date, the Collateral Agent shall
prepare a collateral report containing a description of the Collateral and
setting forth in reasonable detail the principal balance, as of the last day of
the immediately preceding month, of the Dollar Permitted Investments and shall
furnish copies of such report to the Trustee and the Company.
(d) If at any time either Collateral Account ceases to be an
Eligible Account, the Collateral Agent shall establish, in accordance with the
requirements of Section 3.01(a), a successor Collateral Account thereto which
shall be an Eligible Account at a depository institution acceptable to the
Trustee.
(e) Any investment of funds in the Collateral Accounts shall be made
in accordance with Section 3.04 in the name of the Collateral Agent or in the
name of any nominee of the Collateral Agent. Subject to the other provisions
hereof, the Collateral Agent shall have sole control over each such investment
and the income thereon, and any certificate or other instrument evidencing any
such investment, if any, shall be delivered directly to the Collateral Agent,
together with each document
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of transfer, if any, necessary to transfer title to such investment to the
Collateral Agent in a manner which complies with Section 2.05 and this section
3.05
(f) All moneys on deposit in the Collateral Accounts, together with
any Dollar Permitted Investments in which such moneys may be invested or
reinvested, and any gains from such investments, shall constitute Collateral
hereunder subject to the Security Interest of the Collateral Agent for the
benefit of the Secured Party.
(g) Subject to Section 7.03, the Collateral Agent shall not be
liable for any loss on any Dollar Permitted Investment, except for losses
attributable to the failure of the Collateral Agent to comply with its
obligations hereunder or to make payments on Dollar Permitted Investments as to
which the Collateral Agent, in its commercial capacity, is obligated.
SECTION 3.06. Distributions from the Debt Service Reserve Account.
Unless an Indenture Default shall have occurred and be continuing, on each
Payment Date, the Collateral Agent shall withdraw and distribute funds from the
Debt Service Reserve Account in the following priorities:
FIRST, the Collateral Agent shall transfer to the Trustee in
accordance with Section 8.05 an amount equal to the amount of interest
due and payable on the Notes on such Payment Date; provided that on
each Payment Date on and after July __, 1998, the Collateral Agent
shall only transfer such amount if and to the extent it has received
notice from the Trustee that the Trustee has not received an amount
from the Company that is sufficient to pay the full amount of interest
payable on such Payment Date.
SECOND, the Collateral Agent shall transfer to the Trustee in
accordance with Section 8.05 for release to the Company any amounts
held by the Collateral Agent in excess of the amounts required to be
held by the Collateral Agent pursuant to Section 3.03.
SECTION 3.07. Distribution from the Special Proceeds Account. In the
event of a Special Proceeds Offer, the Collateral Agent shall transfer to the
Trustee in accordance with Section 8.05 all funds in the Special Proceeds
Account for application by the Trustee in accordance with and subject to the
provisions of Section 3.12 and Article 10 of the Indenture.
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ARTICLE 4
COVENANTS OF THE COMPANY
SECTION 4.01. Preservation of Collateral. Subject to the rights,
powers and authorities granted to the Collateral Agent and the Secured Party in
this Agreement, the Company shall take such action as is necessary with respect
to the Collateral in order to preserve, maintain and service such Collateral
and to permit (subject to the rights of the Secured Party) the Collateral Agent
to perform its obligations with respect to such Collateral as provided herein.
The Company will do, execute, acknowledge and deliver, or cause to be done,
executed, acknowledged and delivered, such instruments of transfer or take such
other steps or actions as may be necessary, or reasonably required by the
Trustee, to perfect the Security Interest granted hereunder in the Collateral,
to ensure that such Security Interest rank prior to all other Liens and to
preserve the priority of such Security Interest and the validity and
enforceability thereof. Upon a delivery or substitution of Collateral, the
Company shall, to the fullest extent possible, take such actions as are
necessary and appropriate and that may be taken by the Company to create for
the benefit of the Collateral Agent a valid first priority security interest in
the Collateral so delivered and to deliver such Collateral to the Collateral
Agent, free and clear of any other Lien, together with satisfactory assurances
thereof, and to pay any reasonable costs incurred by the Secured Party, the
Collateral Agent, the Company (including its agents) or otherwise in connection
with such delivery.
SECTION 4.02. Opinions as to Collateral. Not more than 90 days nor
less than 30 days prior to each date on which the Company proposes to take any
action contemplated by Section 4.06, the Company shall, at its own cost and
expense, furnish to the Trustee and the Collateral Agent an Opinion of Counsel
either (i) stating that, in the opinion of such counsel, such action has been
taken with respect to the recording, filing, rerecording, amendment and
refiling of this Agreement, any supplements and any other requisite documents
and with respect to the execution, filing, refiling or amendment of any
financing statements and continuation statements as are necessary to perfect,
maintain and protect the Security Interest of the Collateral Agent, on behalf
of the Secured Party, in the Collateral against all creditors of and purchasers
from the Company, and that such security Interest shall remain valid, effective
and of a first priority, and reciting the details of such action, or (ii)
stating that, in the opinion of such counsel, no such action is necessary to
maintain such perfected Security Interest. Such Opinion of Counsel shall
describe each recording, filing, rerecording, amendment and refiling of this
Agreement, any supplements and any other requisite documents and the execution
and filing or refiling as amended of any financing statements and continuation
statements that will, in the opinion of such counsel, be required to perfect,
maintain and protect the Security Interest of the Collateral Agent, on behalf
of the Secured Party for a period, if applicable, specified
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in the Opinion, continuing until a date not earlier than 18 months from the
date of such Opinion.
SECTION 4.03. Notices. In the event the Company acquires knowledge of
the occurrence and continuance of any Indenture Default or any event which,
with the giving of notice or lapse of time, or both, would become an Indenture
Default, the Company shall immediately give written notice thereof to the
Collateral Agent and the Trustee, setting forth the details thereof and the
action which the Company is taking or proposes to take with respect thereto.
SECTION 4.04. Waiver of Stay or Extension Laws; Marshaling of Assets.
The Company covenants, to the fullest extent permitted by applicable law, that
it will not at any time insist on, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any appraisement, valuation, stay, extension
or redemption law wherever enacted, now or at anytime hereafter in force, in
order to prevent or hinder the enforcement of this Agreement or any sale of the
Collateral or any part thereof, or the possession thereof by any purchaser at
any sale under Article 7; and the Company, to the fullest extent permitted by
applicable law, for itself and all who may claim under it, hereby waives the
benefit of all such laws, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Secured Party or the
Collateral Agent, but will suffer and permit the execution of every such power
as though no such law had been enacted. The Company, for itself and all who
may claim under it, waives, to the fullest extent permitted by applicable law,
all right to have the Collateral marshaled upon any foreclosure or other
disposition thereof.
SECTION 4.05. Noninterference, Etc. The Company shall not (i) waive or
alter any of its rights under the Collateral (or any agreement or instrument
relating thereto) without the prior written consent of the Trustee; or (ii)
fail to pay any tax, assessment, charge or fee levied or assessed against the
Collateral, or fail to defend any action, if such failure to pay or defend may
be reasonably likely to adversely affect the priority or enforceability of the
Company's right, title or interest in and to the Collateral or the Collateral
Agent's Security Interest in the Collateral.
SECTION 4.06. Company Changes.
(a) Change in Name, Structure, Etc. The Company shall not change its
name, identity, or corporate or legal structure in any manner unless, prior to
such change, such party shall have effected any necessary or appropriate
recordations of assignments or amendments thereto and filings of financing
statements or amendments thereto and shall have delivered to the Collateral
Agent and the Trustee an Opinion of Counsel of the type described in Section
4.02.
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(b) Relocation of Company. The Company shall give the Trustee and
the Collateral Agent at least 15 Business Days prior written notice of any
relocation of its principal executive office. If the Company relocates (i) its
principal executive office or principal place of business from Beijing, PRC, or
(ii) the locations where it keeps or holds any Collateral from New York, New
York or any records relating to any Collateral from Beijing, PRC, it shall give
prior notice thereof to the Trustee and the Collateral Agent in accordance with
Section 8.05 and shall effect whatever appropriate recordations and filings are
necessary and shall provide an Opinion of Counsel to the Trustee and the
Collateral Agent, to the effect described in Section 4.06.
ARTICLE 5
REMEDIES ON OCCURRENCE OF AN INDENTURE DEFAULT
SECTION 5.01. Liquidation and Sale of Collateral. If an Indenture
Default has occurred and is continuing:
(a) The Trustee may exercise any and all Collateral Management
Rights and, in connection therewith, in its sole discretion, may elect to
preserve all or part of the Collateral and direct the Collateral Agent to
collect and convert into cash all or any part of the Collateral. If the
Trustee directs the Collateral Agent to collect and convert into cash all or
any part of the Collateral, the Collateral Agent shall sell, assign and deliver
for cash the whole or any part of the Collateral for cash, at public or private
sale, in such manner and upon such terms and conditions as the Trustee shall
have directed in writing; provided that, prior to any such sale, the Collateral
Agent, on behalf of the Secured Party, shall have given notice to the Company
that it has been directed by the Trustee to liquidate all or any part of the
Collateral and shall have given such other notices and taken such other steps
as the Trustee has advised the Collateral Agent in writing or as are required
by law or regulation to be given or taken prior to the sale of such property.
Any sale shall be conducted in a commercially reasonable manner. To the extent
permitted by applicable law, the Collateral Agent shall be authorized at any
sale made under this Section 5.01 (if the Trustee deems it advisable and
directs the Collateral Agent to do so) to restrict the prospective bidders or
purchasers to Persons to whom such sale may be made without registration under
any applicable securities laws. The Trustee and the Collateral Agent shall be
entitled to obtain from the Company all records and documentation in the
possession of the Company pertaining to any Collateral. Upon consummation of
any such sale, the Trustee, or the Collateral Agent acting on behalf of and at
the direction of the Trustee, shall have the right to assign, transfer, endorse
and deliver to the purchaser or purchasers thereof, free and clear of any Lien,
the Collateral, or any portion thereof or any interest therein, so sold. To
facilitate the foregoing, the Company hereby irrevocably appoints and empowers
the Trustee and the Collateral
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Agent, or either one acting alone, as its agents and attorneys-in-fact, with
full power of substitution, for the purpose of executing, assigning and
delivering and doing all things necessary to transfer title to the Collateral,
or any part thereof, in connection with a sale thereof pursuant hereto. Each
purchaser at any such sale shall hold the property purchased by it absolutely
free from any claim or right on the part of the Company and the Secured Party;
and the Company hereby irrevocably waives, to the fullest extent permitted by
applicable law, all rights of redemption, stay, marshaling of assets or
appraisal that the Company now has or may at any time in the future have under
applicable law or statute now existing or hereafter enacted.
(b) In the event of any sale, collection, conversion or other
disposition into cash of the Collateral, or any part thereof, after deducting
any actual costs and expenses incurred in connection with any such disposition,
the Collateral Agent shall distribute the proceeds thereof to the Trustee for
distribution in accordance with the priorities set forth in the Indenture.
(c) The Collateral Agent and the Trustee, as the case may be, may
exercise the powers and rights granted by this Section 5.01, without notice or
demand to the Company, except as provided in Section 5.01(a).
SECTION 5.02. Waiver of an Indenture Default. The Trustee, as Secured
Party, shall have the sole right to give effect hereunder to any waiver of an
Indenture Default pursuant to Section 5.04 of the Indenture by means of a
writing setting forth the terms, conditions and extent of such waiver, signed
by such Secured Party and delivered to the Collateral Agent and the Company.
Any such writing shall be binding on the Collateral Agent. Unless such writing
expressly provides to the contrary, the effect of any such writing shall extend
only to the specified event or occurrence which gave rise to the Indenture
Default so waived and not to any other similar event or occurrence which occurs
subsequent to the date of such waiver.
SECTION 5.03. Restoration of Rights and Remedies. If the Collateral
Agent or the Secured Party has instituted a proceeding to enforce any right or
remedy under this Agreement, and such proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Collateral
Agent or the Secured Party, then and in every such case the Company, the
Collateral Agent and the Secured Party shall, subject to any determination in
such proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Collateral
Agent and the Secured Party hereunder shall, subject to any determination in
such proceeding, continue as though no such proceeding had been instituted.
16
<PAGE> 20
SECTION 5.04. No Remedy Exclusive. No right or remedy herein
conferred on or reserved to the Collateral Agent or the Secured Party hereunder
is intended to be exclusive of any other right or remedy, and every right or
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, in equity or otherwise; and each and every right, power and remedy, whether
specifically herein given or otherwise existing, may be exercised from time to
time and as often and in such order as may be deemed expedient by the Collateral
Agent or the Secured Party, and the exercise of any right, power or remedy shall
not be construed to be a waiver of the right to exercise at the same time or
thereafter any other right, power or remedy.
ARTICLE 6
THE SECURED PARTY
SECTION 6.01. Appointment. From and after the Closing Date until the
Termination Date, the Trustee shall be the Secured Party hereunder. No party
dealing with the Secured Party in connection with the exercise of its rights or
duties hereunder shall have any obligation to determine the right, power and
authority of the Secured Party to exercise such rights or the compliance of
such exercise with the provisions hereof, and each and every party may
conclusively rely on the existence of such right, power, authority and
compliance.
SECTION 6.02. Secured Party's Authority. The Company hereby
irrevocably appoints the Secured Party its true and lawful attorney, with full
power of substitution, in the name of the Company, the Secured Party or
otherwise, but at the expense of the Company, to the extent permitted by law to
exercise, at any time and from time to time while any Indenture Default has
occurred and is continuing, any and all of the following powers with respect to
all or any of the Collateral: (i) to demand, sue for, collect, receive and
give acquittance for any and all monies due or to become due upon or by virtue
thereof, (ii) to settle, compromise, compound, prosecute or defend any action
or proceeding with respect thereto, (iii) to sell, transfer, assign or
otherwise deal with the same or the proceeds thereof, and (iv) to extend the
time of payment of any or all thereof and to make any allowance or other
adjustments with respect thereto; provided that the foregoing powers and rights
shall be exercised in accordance with the provisions of Article 5 and Article
7.
SECTION 6.03. Degree of Care. Notwithstanding any term or provision
of this Agreement, the Secured Party shall incur no liability to the Company for
any action taken or omitted by the Secured Party in connection with the
Collateral, except for any gross negligence or wilfull misconduct on the part of
the Secured Party. The Secured Party shall be protected and shall incur no
liability to any such party in relying on the accuracy, acting in reliance on
the contents, and assuming the
17
<PAGE> 21
genuineness, of any notice, demand, certificate, signature, instrument or other
document believed by the Secured Party to be genuine and to have been duly
executed by the appropriate signatory, and (absent manifest error or actual
knowledge to the contrary) the Secured Party shall not be required to make any
independent investigation with respect thereto. The Secured Party shall, at
all times, be free independently to establish to its reasonable satisfaction
the existence or nonexistence, as the case may be, of any fact the existence or
nonexistence of which shall be a condition to the exercise or enforcement of
any right or remedy under this Agreement.
ARTICLE 7
THE COLLATERAL AGENT
SECTION 7.01. Appointment and Powers. Subject to the terms and
conditions hereof, the Secured Party hereby appoints Bankers Trust Company as
the Collateral Agent, and Bankers Trust Company hereby accepts such appointment
and agrees to act as Collateral Agent for the Secured Party, to maintain
custody and possession of the Collateral and to perform the other duties of the
Collateral Agent in accordance with the provisions of this Agreement. The
Secured Party hereby authorizes the Collateral Agent to take such action on its
behalf, and to exercise such rights, remedies, powers and privileges hereunder,
as the Secured Party may direct and as are specifically authorized to be
exercised by the Collateral Agent by the terms hereof, together with such
actions, rights, remedies, powers and privileges as are reasonably incidental
thereto. The Collateral Agent shall act on and in compliance with the
instructions of the Secured Party given in accordance with Section 8.05
promptly following receipt of such instructions. Receipt of such instructions
shall not be a condition to the exercise by the Collateral Agent of its express
duties hereunder, except where this Agreement provides that the Collateral
Agent is permitted to act only following and in accordance with such
instructions.
SECTION 7.02. Performance of Duties. Subject to the requirements of
this Agreement, the Collateral Agent may perform any of its duties hereunder by
or through agents, shall be entitled to consult with counsel and financial
advisors concerning matters pertaining to the agencies hereby created or its
duties hereunder and shall not be liable for actions taken, or omitted to be
taken, in good faith and in accordance with the advice of such counsel or
financial advisors. The Collateral Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement or as
directed by the Secured Party in accordance with Section 8.05. The Collateral
Agent shall not be required to take any discretionary actions hereunder, except
(i) at the direction and expense of the Secured Party given pursuant to Section
8.05 or (ii) as provided in Article 4 and Sections 3.05 and 3.06. The
relationship between the Collateral Agent and the Secured Party is that of
agent and principal only, and nothing herein shall be deemed to constitute the
Collateral Agent a trustee
18
<PAGE> 22
for the Secured Party or impose on the Collateral Agent any obligations other
than those for which express provision is made herein.
SECTION 7.03. Limitation on Liability. Neither the Collateral Agent
nor the Secured Party, nor any of their respective directors, officers or
employees, shall be liable for any action taken or omitted to be taken by it or
them hereunder, or in connection herewith, except that each of the Collateral
Agent and the Secured Party shall be liable for its own gross negligence or
wilfull misconduct; nor shall the Collateral Agent or the Secured Party be
responsible for the validity, effectiveness, value, sufficiency or
enforceability against the Company of this Agreement or the Collateral (or any
part thereof). Notwithstanding any term or provision of this Agreement, the
Collateral Agent shall incur no liability to the Company for any action taken
or omitted by the Collateral Agent in connection with the Collateral, except
for the negligence or wilfull misconduct on the part of the Collateral Agent,
and, further, shall incur no liability to the Secured Party except for a breach
of the terms of this Agreement or for gross negligence or wilfull misconduct in
carrying out its duties to the Secured Party. The Collateral Agent shall be
protected and shall incur no liability to any such party in relying upon the
written instructions of the Secured Party and in relying upon the accuracy,
acting in reliance upon the contents, and assuming the genuineness of any
notice, demand, certificate, signature, instrument or other document reasonably
believed by the Collateral Agent to be genuine and to have been duly executed
by the appropriate signatory, and (absent actual knowledge to the contrary) the
Collateral Agent shall not be required to make any independent investigation
with respect thereto. The Collateral Agent may consult with qualified counsel,
financial advisors or accountants and shall not be liable for any action taken
or omitted to be taken by it hereunder in good faith and in accordance with the
advice of such counsel, financial advisors or accountants. The Collateral
Agent shall not be under any obligation to exercise any of the remedial rights
or powers vested in it by this Agreement unless it shall have received
reasonable security or indemnity satisfactory to the Collateral Agent against
the costs, expenses and liabilities which might be incurred by it.
None of the provisions contained in this Agreement shall require the
Collateral Agent to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if there shall be reasonable ground for
believing that the repayment of such funds or adequate indemnity against such
liability is not reasonably assured to it.
SECTION 7.04. Reliance upon Documents. In the absence of bad faith or
gross negligence on its part, the Collateral Agent shall be entitled to rely on
any communication, instrument, paper or other document reasonably believed by
it to be genuine and correct and to have been signed or sent by the proper
Person or Persons
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<PAGE> 23
and shall have no liability in acting, or omitting to act, where such action or
omission to act is in reasonable reliance upon any statement or opinion
contained in any such document or instrument.
SECTION 7.05. Successor Collateral Agent.
(a) Merger. Any Person into which the Collateral Agent may be
converted or merged, or with which it may be consolidated, or to which it may
sell or transfer its trust business and assets as a whole or substantially as a
whole, or any Person resulting from any such conversion, merger, consolidation,
sale or transfer to which the Collateral Agent is a party, shall (provided it
is otherwise qualified to serve as the Collateral Agent hereunder) be and
become a successor Collateral Agent hereunder and be vested with all of the
title to and interest in the Collateral and all of the trusts, powers,
discretions, immunities, privileges and other matters as was its predecessor
without the execution or filing of any instrument or any further act, deed or
conveyance on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
(b) Resignation. The Collateral Agent and any successor Collateral
Agent may resign only with the prior written consent of the Trustee and shall
give not less than 60 days' prior written notice of any such permitted
resignation by registered or certified mail to the Trustee and the Company;
provided, that such resignation shall take effect only upon the date which is
the latest of (i) the effective date of the appointment of a successor
Collateral Agent and the acceptance in writing by such successor Collateral
Agent of such appointment and of its obligation to perform its duties hereunder
in accordance with the provisions hereof, (ii) delivery of the Collateral in
the possession of the Collateral Agent (or its New York agent) to such
successor to be held in accordance with the procedures specified in Article 2
and (iii) receipt by the Trustee and the Company of an Opinion of Counsel to
the effect described in Section 4.02. Notwithstanding the preceding sentence,
if by the contemplated date of resignation specified in the written notice of
resignation delivered as described above no successor Collateral Agent or
temporary successor Collateral Agent has been appointed Collateral Agent or
becomes the Collateral Agent pursuant to Section 7.05(d) below, the resigning
Collateral Agent may petition a court of competent jurisdiction in Borough of
Manhattan, The City of New York, for the appointment of a successor.
(c) Removal. The Collateral Agent may be removed by the Trustee at
any time upon 60 days' notice, with or without cause, by an instrument or
concurrent instruments in writing delivered to the Collateral Agent and the
Company. A temporary successor may be removed at any time to allow a successor
Collateral Agent to be appointed pursuant to Section 7.05(d). Any removal
pursuant to this
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<PAGE> 24
subsection 7.05(c) shall take effect only upon the date which is the latest of
(i) the effective date of the appointment of a successor Collateral Agent and
the acceptance in writing by such successor Collateral Agent of such
appointment and of its obligation to perform its duties hereunder in accordance
with the provisions hereof, (ii) delivery of the Collateral in the possession
of the Collateral Agent to such successor to be held in accordance with the
procedures specified in Article 2 and (iii) receipt by the Trustee and the
Company of an Opinion of Counsel to the effect described in Section 4.02.
(d) Acceptance by Successor. Any successor Collateral Agent shall
be a bank or trust company (i) having its principal office in the Borough of
Manhattan, The City of New York, or in such other jurisdiction as the Secured
Party may approve and (ii) having a combined capital and surplus of at least
US$500,000,000. If such bank or trust company publishes reports of condition
at least annually, pursuant to law or to the requirements of a Federal, State
or District of Columbia supervising or examining authority, then for the
purposes of this subsection 7.05(d) the combined capital and surplus of such
bank or trust company shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. The Secured
Party shall have the sole right to appoint a successor Collateral Agent,
subject only to the requirements set forth in the preceding sentence and to the
approval of the Company, which approval shall not be unreasonably withheld. If
the Company and the Secured Party shall not have agreed within ten days on the
selection of a successor Collateral Agent, the Secured Party shall have the
right to appoint a temporary successor to act as the Collateral Agent. If by
the 90th day after appointment of such temporary successor Collateral Agent,
the Secured Party and the Company shall have remained unable to agree on the
selection of a successor Collateral Agent, such temporary successor shall
automatically become the successor Collateral Agent hereunder. Every temporary
or permanent successor Collateral Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Trustee and the Company
an instrument in writing accepting such appointment hereunder; and the relevant
predecessor shall execute, acknowledge and deliver such other documents and
instruments as will effectuate the delivery of all Collateral in the possession
of the Collateral Agent to the successor Collateral Agent to be held in
accordance with the procedures specified in Articles 2 and 3, whereupon such
successor, without any further act, deed or conveyance, shall become fully
vested with all the estates, properties, rights, powers, duties and obligations
of its predecessor. Such predecessor shall, nevertheless, on the written
request of the Trustee or the Company, execute and deliver an instrument
transferring to such successor all the estates, properties, rights and powers
of such predecessor hereunder. Every predecessor Collateral Agent shall
assign, transfer and deliver all Collateral held by it as Collateral Agent
hereunder to its successor as Collateral Agent. Should any instrument in
writing from the Company be reasonably required by a successor
21
<PAGE> 25
Collateral Agent for more fully and certainly vesting in such successor the
estates properties, rights, powers, duties and obligations vested or intended
to be vested hereunder in the Collateral Agent, any and all such written
instruments shall, at the request of the temporary or permanent successor
Collateral Agent, be forthwith executed, acknowledged and delivered by the
Company. The designation of any successor Collateral Agent and the instrument
or instruments removing any Collateral Agent and appointing a successor
hereunder, together with all other instruments provided for herein, shall be
maintained with the records relating to the Collateral and, to the extent
required by applicable law, filed or recorded by the successor Collateral Agent
in each place where such filing or recording is necessary to effect the
transfer of the Collateral to the successor Collateral Agent or to protect the
Security Interest granted hereunder.
SECTION 7.06. Indemnification. The Company shall indemnify the
Collateral Agent, its officers, directors, employees and agents for, and hold
the Collateral Agent, its officers, directors, employees and agents harmless
against, any claim, loss, liability or reasonable expense (including all
reasonable costs, expenses, attorneys' fees and disbursements) arising out of
or in connection with the Collateral Agent's acting as Collateral Agent
hereunder, except such loss, liability or expense as shall result from the
[gross] negligence or wilfull misconduct of the Collateral Agent or its
officers, directors, employees or agents. The obligation of the Company under
this Section 7.06 shall survive the termination of this Agreement and the
resignation or removal of the Collateral Agent.
SECTION 7.07. Compensation and Reimbursement. The Company agrees (i)
to pay to the Collateral Agent, from time to time, such compensation as may be
agreed in writing by the Company and the Collateral Agent for all services
rendered by it hereunder and (ii) to reimburse the Collateral Agent on request
for all reasonable expenses, disbursements and advances incurred or made by the
Collateral Agent in accordance with any provision of, or carrying out its
duties and obligations under, this Agreement (including the reasonable
compensation and fees and the reasonable expenses and disbursements of its
agents, any independent certified public accountants and counsel retained by
it), except any expense, disbursement or advance resulting from the [gross]
negligence or wilfull misconduct of the Collateral Agent.
SECTION 7.08. Representations and Warranties of the Collateral Agent.
The Collateral Agent represents and warrants to the Company and to the Secured
Party as follows:
(a) Due Organization. The Collateral Agent is a New York banking
corporation, duly organized, validly existing and in good standing under the
laws of the United States, is duly authorized and licensed under applicable law
to conduct its
22
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business as presently conducted and meets the eligibility requirements set
forth in the first sentence of Section 7.05(d).
(b) Corporate Power. The Collateral Agent has all requisite right,
power and authority to execute and deliver this Agreement and to perform all of
its duties hereunder and thereunder.
(c) Due Authorization. The execution and delivery by the Collateral
Agent of this Agreement, and the performance by the Collateral Agent of its
duties hereunder and thereunder, have been duly authorized by all necessary
corporate proceedings; and no further approvals or filings, including any
governmental approvals, are required for the valid execution and delivery by
the Collateral Agent, or the performance by the Collateral Agent, of this
Agreement.
(d) Valid and Binding Agreement. The Collateral Agent has duly
executed and delivered this Agreement and this Agreement constitutes a valid
and binding obligation of the Collateral Agent, enforceable against the
Collateral Agent in accordance with its terms, except as (i) such
enforceability may be limited by bankruptcy, insolvency, reorganization and
similar laws relating to or affecting the enforcement of creditors' rights
generally and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability.
SECTION 7.09. Waiver of Set-offs. The Collateral Agent hereby
expressly waives any and all rights of set-off that the Collateral Agent may
otherwise at any time have under applicable law with respect to any Collateral
Account and agrees that amounts in the Collateral Accounts shall at all times
be held and applied solely in accordance with the provisions of Article 3 and
the other provisions of this Agreement.
ARTICLE 8
MISCELLANEOUS
SECTION 8.01. Further Assurances. Each party hereto shall take such
action and deliver such instruments to any other party hereto, in addition to
the actions and instruments specifically provided for herein, as may be
reasonably requested or required to effectuate the purpose or provisions of
this Agreement or to confirm or perfect any transaction described or
contemplated herein. Within 20 days after the date hereof, the Company shall
(i) take such actions and deliver, file and record such instruments as may be
necessary to amend any financing statements relating to the Collateral which do
not identify the Secured Party, so that such financing statements identify the
Secured Party as such and so that the benefits thereof inure to the Secured
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<PAGE> 27
Party and (ii) furnish to the Secured Party copies of such instruments and
evidence of the filing and recording thereof.
SECTION 8.02. Waiver. Any waiver by any party of any provision of
this Agreement or any right, remedy or option hereunder shall only prevent and
estop such party from thereafter enforcing such provision, right, remedy or
option if such waiver is given in writing and only as to the specific instance
and for the specific purpose for which such waiver was given. The failure or
refusal of any party hereto to insist in any one or more instances, or in a
course of dealing, on the strict performance of any of the terms or provisions
of this Agreement by any party hereto or the partial exercise of any right,
remedy or option hereunder shall not be construed as a waiver or relinquishment
of any such term or provision, but the same shall continue in full force and
effect.
SECTION 8.03. Amendments. No amendment of this Agreement shall be
effective unless the same shall have been made or consented to in writing by
each of the parties hereto.
SECTION 8.04. Severability. In the event that any provision of this
Agreement or the application thereof to any party hereto or to any circumstance
or in any jurisdiction governing this Agreement shall, to any extent, be
invalid or unenforceable under any applicable statute, regulation or rule of
law, then such provision shall be deemed inoperative to the extent that it is
invalid or unenforceable; and the remainder of this Agreement, and the
application of any such invalid or unenforceable provision to the parties,
jurisdictions or circumstances other than to whom or to which it is held
invalid or unenforceable, shall not be affected thereby, nor shall the same
affect the validity or enforceability of any other provision of this Agreement.
The parties hereto further agree that the holding by any court of competent
jurisdiction that any remedy pursued by the Collateral Agent or the Secured
Party hereunder is unavailable or unenforceable shall not affect in any way the
ability of the Collateral Agent or the Secured Party to pursue any other remedy
available to it.
SECTION 8.05. Notices; Payments and Transfers of Funds. (i) All
notices, demands, certificates, requests, instructions and communications
hereunder ("notices") shall be in writing and shall be effective (a) five
Business Days after delivery to an air courier, or (b) on the date personally
delivered to an Authorized Officer of the party to which sent, or (c) on the
date transmitted by legible facsimile transmission upon written confirmation of
receipt and (ii) all payments and transfers of funds made by or on behalf of
any party hereto to any other party hereto pursuant to the terms hereof shall
be made by delivery of an official bank check in, or wire transfer of,
immediately available funds, in all cases addressed and sent to the recipient
as follows:
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<PAGE> 28
If to the Company:
AES China Generating Co. Ltd.
9/F Allied Capital Resources Building
32-38 Ice House Street
Hong Kong
Attention: Chief Financial Officer
Telephone: (852) 2842-5111
Facsimile: (852) 2842-1673
Wire transfer instructions: [to come]
If to the Trustee:
Bankers Trust Company
Four Albany Street
New York, New York 10006
Attention: Corporate Trust and Agency Group/Debt Adminstration
Telephone: (212) 250-6573
Facsimile: (212) 250-0933
Wire transfer instructions: [to come]
If to the Collateral Agent:
Bankers Trust Company
Four Albany Street
New York, New York 10006
Attention: Corporate Trust and Agency Group/Debt Adminstration
Telephone: (212) 250-6573
Facsimile: (212) 250-0933
Wire transfer instructions: [to come]
Any notices or documents sent by facsimile to the Collateral Agent shall be
promptly followed by an original copy thereof sent by mail. A copy of each
notice given hereunder to any party hereto shall also be given to each of the
other parties hereto. Each party hereto may, by notice given in accordance
herewith to each of the other parties hereto, designate any further or
different address to which subsequent notices shall be sent.
25
<PAGE> 29
SECTION 8.06. Terms of this Agreement. This Agreement shall take
effect on the Closing Date and shall continue in effect until the Termination
Date. On the Termination Date, this Agreement shall terminate, all obligations
of the parties hereunder shall cease and terminate and, subject to Section
2.07, the Collateral, if any, held hereunder and not to be used or applied in
discharge of any obligations of the Company in respect of the Secured
Obligations or otherwise under this Agreement, shall be released to and in
favor of the Company, provided that the provisions of Sections 7.06 and 7.07
shall survive any termination of this Agreement and the release or transfer of
any Collateral upon such termination.
SECTION 8.07. Assignment; Third-Party Rights. This Agreement shall be
a continuing obligation of the Company and shall (i) be binding upon the
Company and its respective successors and assigns and (ii) be binding upon and
inure to the benefit of and be enforceable by the Secured Party and the
Collateral Agent, and by their respective successors, transferees and assigns.
The Company may not assign this Agreement, or delegate any of its duties
hereunder, without the prior written consent of the Trustee and the Collateral
Agent, provided that no such consent shall be required in the case of a merger,
consolidation, amalgamation or other transaction effected in accordance with
Article 4 of the Indenture.
SECTION 8.08. Consent of Secured Party. In the event that the Secured
Party's consent is required under the terms hereof, it is understood and agreed
that, except as otherwise provided expressly herein, the determination whether
to grant or withhold such consent shall be made solely by the Secured Party in
its sole discretion.
SECTION 8.09. Trial by Jury Waived. Each of the parties hereto
waives, to the fullest extent permitted by law, any right it may have to a trial
by jury in respect of any litigation arising directly or indirectly out of,
under or in connection with this Agreement, the Notes or the Indenture or any of
the transactions contemplated hereunder or thereunder. Each of the parties
hereto (a) certifies that no representative, agent or attorney of any other
party has represented, expressly or otherwise, that such other party would not,
in the event of litigation, seek to enforce the foregoing waiver and (b)
acknowledges that it has been induced to enter into this Agreement, the Notes
and the Indenture to which it is a party by, among other things, this waiver.
SECTION 8.10. Governing Law. This agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to the principles of conflicts of law thereof.
SECTION 8.11. Consent to Jurisdiction. The Company hereby irrevocably
submits to the non-exclusive jurisdiction of the United States District Court
for the Southern District of New York, any court in the State of New York
located in the city
26
<PAGE> 30
and county of New York, and any appellate court from any thereof, in any
action, suit or proceeding brought against it and related to or in connection
with this Agreement, the Notes or the Indenture or the transactions
contemplated hereunder or thereunder or for recognition or enforcement of any
judgment and each of the parties hereto irrevocably and unconditionally agrees
that all claims in respect of any such suit or action or proceeding may be
heard or determined in such New York State court or, to the extent permitted by
law, in such federal court. Each of the parties hereto agrees that a final
judgment in any such action, suit or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. To the extent permitted by applicable law, each of the
parties hereby waives and agrees not to assert by way of motion, as a defense
or otherwise in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such courts, that the suit, action or
proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that this Agreement or the subject matter
hereof may not be litigated in or by such courts. The Company hereby
irrevocably appoints and designates The Prentice-Hall Corporation System, Inc.
having an address at the date hereof at 375 Hudson Street, New York, New York
10014-3660 as its true and lawful attorney and duly authorized agent for
acceptance of service of legal process. The Company agrees that service of such
process on The Prentice-Hall Corporation System, Inc., shall constitute
personal service of such process upon the Company. Nothing contained in this
Agreement shall limit or affect the rights of any party hereto to serve process
in any other manner permitted by law or (other than the Company) to commence
legal proceedings relating to this Agreement against the Company or its
property in the courts of any jurisdiction.
SECTION 8.12. Counterparts. This Agreement may be executed in two or
more counterparts by the parties hereto, and each such counterpart shall be
considered an original and all such counterparts shall constitute one and the
same instrument.
SECTION 8.13. Headings. The headings of sections and paragraphs and
the Table of Contents contained in this Agreement are provided for convenience
only. They form no part of this Agreement and shall not affect its
construction or interpretation.
27
<PAGE> 31
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth on the first page hereof.
AES CHINA GENERATING CO. LTD.
By:
------------------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Trustee under the Indenture
By:
------------------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Collateral Agent
By:
------------------------------
Name:
Title:
28
<PAGE> 1
<TABLE>
<S> <C> <C> <C>
CONYERS DILL & PEARMAN
================================================================
B E R M U D A B A R R I S T E R S & A T T O R N E Y S
3408 Two Exchange Square, 8 Connaugh1 Place Central, Hong Kong
Telephone: (852) 2524 7106 Facsimile: (852) 2845 9268 E-mail: info@cdp,bm
RESIDENT PARTNER: BERMUDA RESIDENT PARTNERS: C.F. Alexander Cooper Lisa J. Marshall
Rosemarie P.Y. Chen The Hon. C. T.M. Collis, OBE, J.P. John C.R. Collis Michael J. McCabe
ASSOCIATES: Nicholas B. Dill, J.P. Narinder K. Hargun Robin J. Mayor
Lilian S.C. Woo Richard S.L. Pearman Nicholas G. Trollope Graham B.R. Collis
David W.J. Astwood John A. Ellison Donald H. Malcolm Anthony D. Whaley
Christopher W.H. Bickley Alec R. Anderson Nicholas P. Johnson
Our Ref. Your Ref.
CWHB/rn/15592-01 EXHIBIT 5.1
</TABLE>
9 December, 1996
AES China Generating Co. Ltd
3/F (w), Golden Bridge Plaza
No. 1 (A) Jianguomenwai Avenue
Beijing, 10020
People's Republic of China
Dear Sirs,
Re: AES China Generating Co. Ltd.
- Registration Statement on Form S-3 (Registration No. 333-5798)
We have acted as special legal counsel in Bermuda to AES China
Generating Co. Ltd (the "Company"), in connection with the preparation and
filing with the United States Securities and Exchange Commission (the "SEC")
under the United States Securities Act of 1933, as amended (the "Act"), of a
registration statement on Form S-3 (Registration No. 333-5798) (the
"Registration Statement"), relating to the proposed issue of Notes Due 2006
(the "Notes") in an aggregate principal amount not to exceed US$180,000,000
under an Indenture (the "Indenture") to be entered into by the Company and
Bankers Trust Company, as Trustee.
This opinion is being furnished to you in accordance with the
requirements of Item 601(B)(5) of Regulation S-K under the Act.
For the purposes of giving this opinion, we have examined the
following documents:
(i) a copy of the Registration Statement;
(ii) a copy of the prospectus (the "Prospectus") contained in the
Registration Statement;
<PAGE> 2
AES China Generating Co. Ltd.
9 December, 1996
Page 2.
(iii) the form of the Indenture (including the terms of the Notes
included therein): and
(iv) the form of the Underwriting Agreement to be entered into by
the Company, as issuer and Morgan Stanley & Co. Incorporated
and Donaldson, Lufkin & Jenrette Securities Corporation, as
underwriters (the "Underwriting Agreement");
The Underwriting Agreement and the Indenture are collectively referred
to as the "Documents".
We have also reviewed the memorandum of association and the bye-laws
of the Company and such other documents and made such enquiries as to questions
of Bermuda law as we have deemed necessary in order to render the opinion set
forth below.
We have assumed:-
(a) the genuineness and authenticity of all signatures, stamps and
seals and the conformity to the originals of all copies of
documents (whether or not certified) of all documents examined
by us and the authenticity and completeness of the originals
from which such copies were taken;
(b) the accuracy and completeness of all factual representations
and warranties made in the Documents and other documents
reviewed by us;
(c) that there is no provision of the law of any jurisdiction,
other than Bermuda, which would have any implication in
relation to the opinions expressed herein;
(d) that no party is aware of any improper purpose for the issue
of the Notes;
(e) that the Notes were issued to persons regarded as non resident
in Bermuda for exchange control purposes;
(f) that the Documents will be valid, binding and enforceable in
accordance with their respective terms.
(g) the validity under the laws of the United States of America of
the Registration Statement and the Prospectus and that the
Registration Statement has been or will be duly filed with or
declared effective by the SEC;
<PAGE> 3
AES China Generating Co. Ltd.
9 December, 1996
Page 3.
The obligations of the Company under the Documents:
(a) will be subject to the laws from time to time in effect
relating to bankruptcy, insolvency, liquidation, possessory
liens, rights of set off, reorganisation, amalgamation,
moratorium or any other laws or legal procedures, whether of a
similar nature or otherwise, generally affecting the rights of
creditors;
(b) will be subject to statutory limitation of the time within
which proceedings may be brought and the equitable principle
of laches;
(c) will be subject to general principles of equity and, as such,
specific performance and injunctive relief, being equitable
remedies, may not be available; and
(d) may not be given effect to by a Bermuda court if and to the
extent they constitute the payment of an amount which is in
the nature of a penalty and not in the nature of liquidated
damages.
Payment by the Company of a commission to any person in consideration
of his subscribing or agreeing to subscribe, whether absolutely or
conditionally, for the Notes or procuring or agreeing to procure subscriptions
whether absolute or conditional for the Notes is lawful where the said
commission is reasonable. We express no opinion on the reasonableness or
otherwise of any commission payable pursuant to the issue of the Notes.
We express no opinion on section 4.01 of the Indenture to the extent
that it fetters a statutory power of the Company.
The Prospectus must be filed with the Registrar of Companies in
Bermuda under The Companies Act 1981 (as amended) before the offer of the Notes
commences. Whenever any of the particulars in the Prospectus ceases in a
material respect to be accurate supplementary particulars must also be issued
and filed with the Registrar of Companies in Bermuda.
The issue of the Notes will require the prior approval of the Bermuda
Monetary Authority under the Exchange Control Act 1972 and the regulations
promulgated thereunder.
We have made no investigation of and express no opinion in relation to
the laws of any jurisdiction other than Bermuda. This opinion is to be
governed by and construed in accordance with the laws of Bermuda and is limited
to and is given on the basis of the law in effect on the date hereof in
Bermuda. This opinion is issued solely for your benefit with respect to the
matters
<PAGE> 4
AES China Generating Co. Ltd.
9 December, 1996
Page 4.
referred to herein and is not to be relied upon by any other person, firm or
entity or in respect of any other matter nor is it to be quoted or referred to
in any document registered or filed with any governmental authority or public
body without our prior express consent in writing save that this opinion may be
filed as an exhibit to the Registration Statement. We also consent to the
reference to our firm under the caption "Legal Matters" in the Registration
Statement.
On the basis of and subject to the foregoing, we are of the opinion
that:
1. The Company is duly incorporated and validly existing under the laws
of Bermuda.
2. The Notes to be sold pursuant to the Registration Statement and the
Prospectus have been duly authorized and, when executed,
authenticated, issued and delivered in accordance with the provisions
of the Indenture and as contemplated by the Registration Statement and
the Prospectus, will constitute valid and binding obligations of the
Company enforceable against the Company in accordance with their
terms.
Yours faithfully,
/s/ Conyers Dill & Pearman
--------------------------
CONYERS DILL & PEARMAN
<PAGE> 1
EXHIBIT 5.2
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
(INTERNATIONAL)
AMERICAN ATTORNEYS AT LAW
30/F PEREGRINE TOWER, LIPPO CENTRE
89 QUEENSWAY, CENTRAL, HONG KONG
---
TEL: 2820-0700
FAX: 2820-0727
December 9, 1996
AES China Generating Co. Ltd.
3/F (W), Golden Bridge Plaza
No. 1 (A) Jianguomenwai Avenue
Beijing, 100020
People's Republic of China
Re: AES China Generating Co. Ltd.
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as special United States counsel to AES China
Generating Co. Ltd., a Bermuda company (the "Company"), in connection with the
public offering of $180,000,000 aggregate principal amount of the Company's ___
% Notes due 2006 (the "Securities") to be issued under an indenture (the
"Indenture") to be entered into between the Company and Bankers Trust Company,
as Trustee (the "Trustee").
This opinion is being furnished in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Securities Act of
1933, as amended (the "Act").
In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of (i) the
Registration Statement on Form S-3 (File No. 333-5798) as filed with the
Securities and Exchange Commission (the "Commission") on October 16, 1996 under
the Act, Amendment No.1, filed on November 22, 1996 and Amendment No.2, filed
on November 27, 1996 (such Registration Statement, as so amended, being
hereinafter referred to as the
<PAGE> 2
AES China Generating Co. Ltd.
December 9, 1996
Page 2
"Registration Statement"); (ii) the form of the Underwriting Agreement (the
"Underwriting Agreement") proposed to be entered into between the Company, as
issuer, and Morgan Stanley & Co. Incorporated and Donaldson, Lufkin & Jenrette
Securities Corporation (the "Underwriters") filed as an exhibit to the
Registration Statement; (iii) the form of the Indenture filed as an exhibit to
the Registration Statement; (iv) the form of the Securities included in the
Indenture; and (v) certain resolutions of the Board of Directors of the Company
relating to the issuance and sale of the Securities and related matters. We
have also examined originals or copies, certified or otherwise identified to
our satisfaction, of such records of the Company and such agreements,
certificates of public officials, certificates of officers or other
representatives of the Company and others, and such other documents,
certificates and records as we have deemed necessary or appropriate as a basis
for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such latter documents. In making our
examination of documents executed or to be executed by parties other than the
Company, we have assumed that such parties had or will have the power,
corporate or other, to enter into and perform all obligations thereunder and
have also assumed the due authorization by all requisite action, corporate or
other, and execution and delivery by such parties of such documents and the
validity and binding effect thereof. As to any facts material to the opinion
expressed herein which we have not independently established or verified, we
have relied upon statements and representations of officers and other
representatives of the Company and others.
Members of our firm are admitted to the bar in the State of
New York, and we do not express any opinion as to the laws of any other
jurisdiction (or as to the effect of the laws of any such jurisdiction on the
opinions stated herein) other than the federal laws of the United States of
America to the extent referred to specifically herein. To the extent that the
opinions set forth herein relate to matters under the laws of Bermuda, such
matters have been addressed in the opinion of Conyers, Dill & Pearman, a copy
of which is filed as Exhibit 5.1 to the Registration Statement. We have
assumed that the choice of New York law to govern the Indenture and the
Securities is legal and valid under the laws of Bermuda and that the issuance
of the Securities and the compliance by the Company with the terms of
<PAGE> 3
AES China Generating Co. Ltd.
December 9, 1996
Page 3
the Indenture and the Securities will not violate or conflict with any
provision of Bermuda law.
Based upon and subject to the foregoing and the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
Assuming the due authorization by all requisite action,
corporate and other, and due execution and delivery under the laws of Bermuda
of the Indenture and the Securities by the Company, when (i) the Registration
Statement becomes effective and the Indenture has been qualified under the
Trust Indenture Act of 1939, as amended, and (ii) the Securities have been duly
executed and authenticated in accordance with the terms of the Indenture and
have been delivered and paid for by the Underwriters as contemplated by the
Underwriting Agreement, the Indenture will be a valid and binding agreement,
enforceable against the Company in accordance with its terms and the Securities
will be valid and binding obligations of the Company entitled to the benefits
of the Indenture and enforceable against the Company in accordance with their
terms, except to the extent that the enforcement thereof may be limited by (1)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (2) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
We hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement. We also consent to the
reference to our firm under the caption "Legal Matters" in the Registration
Statement. In giving this consent, we do not thereby admit that we are
included in the category of persons whose consent is required under Section 7
of the Act or the rules and regulations of the Commission.
Very truly yours,
/s/Skadden, Arps, Slate, Meagher & Flom
------------------------------------
Skadden, Arps, Slate, Meagher & Flom
(International)
<PAGE> 1
EXHIBIT 12.1
AES CHINA GENERTING CO. LTD.
STATEMENT RE: COMPUTATION OF RATIOS
(IN THOUSANDS, EXCEPT RATIO AMOUNTS)
<TABLE>
<CAPTION>
Fiscal Period Ended Nine Months Ended
November 30 August 31
------------------- ------------------
1994 1995 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges
Income/(loss) before income taxes and
minority interest $(368) $2,223 $1,662 $2,620
Add: Fixed charges 100 480 143 2,836
Less: Capitalized interest - (290) - (2,017)
Less: Minority interest (3) (85) (93) (97)
Less: Equity in earnings of affiliates - (206) (102) (441)
Add: Dividend from affiliates - - - 447
Add: Amortization of capitalized interest - - - 12
------ ------- ------- -------
Earnings (271) 2,122 1,610 3,360
------ ------- ------- -------
Fixed charges:
Capitalized interest - 290 - 2,017
Interest expense - - - 679
Rental expense 100 190 143 140
------ ------- ------- -------
Total fixed charges $100 $480 $143 2,830
------ ------- ------- -------
Ratio of earnings to fixed charges N/A 4.42x 11.26x 1.18x
------ ------- ------- -------
Coverage deficiency $371 $N/A $N/A $N/A
------ ------- ------- -------
Pro Forma Fixed Charge Coverage Ratio
[To be added]
</TABLE>
<PAGE> 1
EXHIBIT 25.1
================================================================================
UNITED STATES
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) ________
---------------------
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
<TABLE>
<S> <C>
NEW YORK 13-4941247
(Jurisdiction of Incorporation (I.R.S. Employer
if not a U.S. national bank) Identification no.)
FOUR ALBANY STREET 10006
NEW YORK, NEW YORK (Zip Code)
(Address of principal
executive offices)
</TABLE>
---------------------
AES CHINA GENERATING CO. LTD.
(Exact name of obligor as specified in the charter)
<TABLE>
<S> <C>
BERMUDA 98-0152612
(State or other jurisdiction of (I.R.S. employer
Incorporation or organization) Identification no.)
3/F(W), GOLDEN BRIDGE PLAZA N/A
NO. 1(A) JIANGUOMENWAI AVENUE (Zip Code)
BEIJING, 100020,
PEOPLES REPUBLIC OF CHINA
(Address of registrant's principal executive
offices)
</TABLE>
---------------------
% NOTES DUE 2006
(Title of the indenture securities)
================================================================================
<PAGE> 2
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.
<TABLE>
<CAPTION>
NAME ADDRESS
- --------------------------------------------------------------------------- -----------------
<S> <C>
Federal Reserve Bank (2nd District)........................................ New York, NY
Federal Deposit Insurance Corporation...................................... Washington, D.C.
New York State Banking Department.......................................... Albany, NY
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR
If the obligor is an affiliate of the Trustee, describe each such
affiliation.
None.
ITEM 3.-15. NOT APPLICABLE
ITEM 16. LIST OF EXHIBITS
<TABLE>
<S> <C> <C>
EXHIBIT 1 -- Restated Organization Certificate of Bankers Trust Company dated August 7,
1990 and Certificate of Amendment of the Organization Certificate of Bankers
Trust Company dated March 21, 1996 -- Incorporated herein by reference to
Exhibit 1 filed with Form 1 Statement, Registration No. 33-65171.
EXHIBIT 2 -- Certificate of Authority to commence business -- Incorporated herein by
reference to Exhibit 2 filed with Form T-1 Statement, Registration No.
33-21047.
EXHIBIT 3 -- Authorization of the Trustee to exercise corporate trust
powers -- Incorporated herein by reference to Exhibit 2 filed with Form T-1
Statement, Registration No. 33-21047.
EXHIBIT 4 -- Existing By-Laws of Bankers Trust Company, dated as amended on October 19,
1995 -- Incorporated herein by reference to Exhibit 4 filed with Form T-1
Statement, Registration No. 33-65171.
EXHIBIT 5 -- Not applicable.
EXHIBIT 6 -- Consent of Bankers Trust Company required by Section 321(b) of the Act --
Incorporated herein by reference by Exhibit 4 filed with Form T-1 Statement,
Registration No. 22-18864.
EXHIBIT 7 -- A copy of the latest report of condition of Bankers Trust Company dated as
of September 30, 1996 (copy attached).
EXHIBIT 8 -- Not Applicable.
EXHIBIT 9 -- Not Applicable.
</TABLE>
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
trustee, Bankers Trust Company, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
The City of New York, and State of New York, on the 3rd day of December, 1996.
BANKERS TRUST COMPANY
By: /s/ DOROTHY ROBINSON
------------------------------------
Dorothy Robinson
Assistant Secretary
<PAGE> 4
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 9/30/96 ST-RK: 36-4240 FFIEC 031
Address: 130 Liberty Street Vender ID: D CERT: 00623 Page RC-1
City, State, Zip: New York, NY 10006 11
FDIC Certificate No.: 0 0 6 2 3
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS
SEPTEMBER 30, 1996
ALL SCHEDULES ARE TO BE REPORTED IN THOUSANDS OF DOLLARS.
UNLESS OTHERWISE INDICATED, REPORTED THE AMOUNT OUTSTANDING AS OF THE LAST
BUSINESS DAY OF THE QUARTER.
SCHEDULE RC -- BALANCE SHEET
<TABLE>
<CAPTION>
C400
------------
DOLLAR AMOUNTS IN THOUSANDS RCFD BIT MIL THOU
--------------------------- ---- ------------
<C> <S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from
Schedule RC-A):
a. Noninterest-bearing balances and currency and
coin(1)............................................. 0021 509,000
b. Interest-bearing balances(2)........................ 0071 4,453,000
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B,
column A)........................................... 1754 0
b. Available-for-sale securities (from Schedule RC-B,
column D)........................................... 1773 4,133,000
3. Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds sold.................................. 0276 5,933,000
b. Securities purchased under agreements to resell..... 0277 413,000
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from
Schedule RC-C)...................................... RCFD 2122 27,239,000
b. LESS: Allowance for loan and lease losses........... RCFD 3123 917,000
c. LESS: Allocated transfer risk reserve............... RCFD 3128 0
d. Loans and leases, net of unearned income,
allowances, and reserve (item 4.a minus 4.b and
4.c)................................................ 2125 26,322,000
5. Assets held in trading accounts.......................... 3545 36,669,000
6. Premises and fixed assets (including capitalized
leases).................................................. 2145 570,000
7. Other real estate owned (from Schedule RC-M)............. 2150 215,000
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)........................... 2130 212,000
9. Customers' liability to this bank on acceptances
outstanding.............................................. 2155 577,000
10. Intangible assets (from Schedule RC-M)................... 2143 18,000
11. Other assets (from Schedule RC-F)........................ 2160 8,808,000
12. Total assets (sum of items 1 through 11)................. 2170 89,432,000
</TABLE>
- ---------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE> 5
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 9/30/96 ST-RK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vender ID: D CERT: 00623 Page RC-2
City, State ZIP: New York, NY 10006 12
FDIC Certificate No.: 0 0 6 2 3
</TABLE>
SCHEDULE RC -- CONTINUED
<TABLE>
<CAPTION>
C400
------------
DOLLAR AMOUNTS IN THOUSANDS RCFD BIT MIL THOU
--------------------------- --------- ------------
<C> <S> <C> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part I)........................... RCON 2200 9,391,000
(1) Noninterest-bearing(1)........................... RCON 6631 2,734,000
(2) Interest-bearing................................. RCON 6636 6,657,000
b. In foreign offices, Edge and Agreement subsidiaries,
and IRFs (from Schedule RC-E part II)................. RCFN 2200 23,385,000
(1) Noninterest-bearing.............................. RCFN 6631 654,000
(2) Interest-bearing................................. RCFN 6636 22,731,000
14. Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the
bank and of its Edge and Agreement subsidiaries, and
in IBFs:
a. Federal funds purchased............................... RCFD 0278 3,090,000
b. Securities sold under agreements to repurchase........ RCFD 0279 99,000
15. a. Demand notes issued to the U.S. Treasury.............. RCON 2840 0
b. Trading liabilities................................... RCFD 3543 18,326,000
16. Other borrowed money:
a. With original maturity of one year or less............ RCFD 2332 17,476,000
b. With original maturity of more than one year.......... RCFD 2333 2,771,000
17. Mortgage indebtedness and obligations under capitalized
leases..................................................... RCFD 2910 31,000
18. Bank's liability on acceptances executed and outstanding... RCFD 2920 577,000
19. Subordinated notes and debentures.......................... RCFD 3200 1,228,000
20. Other liabilities (from Schedule RC-G)..................... RCFD 2930 8,398,000
21. Total liabilities (sum of items 13 through 20)............. RCFD 2948 84,772,000
22. Limited-life preferred stock and related surplus........... RCFD 3282 0
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.............. RCFD 3838 500,000
24. Common stock............................................... RCFD 3230 1,002,000
25. Surplus (exclude all surplus related to preferred stock)... RCFD 3839 527,000
26. a. Undivided profits and capital reserves................ RCFD 3632 3,017,000
b. Net unrealized holding gains (losses) on
available-for-sale securities......................... RCFD 8434 (16,000)
27. Cumulative foreign currency translation adjustments........ RCFD 3284 (370,000)
28. Total equity capital (sum of items 23 through 27).......... RCFD 3210 4,660,000
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)...................... RCFD 3300 89,432,000
MEMORANDUM
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes
the most comprehensive level of auditing work performed for the bank by independent NUMBER
------------
external auditors as of any date during 1995............................................. RCFD 6724 N/A
1 = Independent audit of the bank conducted in accordance with generally accepted auditing standards
by a certified public accounting firm which submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which submits a report on the
consolidated holding company (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally accepted auditing
standards by a certified public accounting firm (may be required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors (may be required by state
chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
</TABLE>
- ---------------
(1) Including total demand deposits and noninterest-bearing time and savings
deposits.
