EXHIBIT 99.1
EXECUTION COPY
$850,000,000
CREDIT AGREEMENT
dated as of
March 31, 2000
among
THE AES CORPORATION
The Banks Listed Herein,
The Fronting Banks Listed Herein,
BANK OF AMERICA, N.A.,
as Documentation Agent,
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK,
as Syndication Agent
and
CITIBANK, N.A.,
as Agent
TABLE OF CONTENTS
PAGE
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ARTICLE 1
DEFINITIONS
Section 1.01 DEFINITIONS...............................................................................1
Section 1.02 ACCOUNTING TERMS AND DETERMINATIONS......................................................16
Section 1.03 TYPES OF BORROWING.......................................................................16
Section 1.04 CURRENCY EQUIVALENTS GENERALLY...........................................................16
ARTICLE 2
THE CREDITS
Section 2.01 COMMITMENTS TO LEND......................................................................16
Section 2.02 NOTICE OF BORROWING......................................................................17
Section 2.03 LETTERS OF CREDIT........................................................................18
Section 2.04 NOTES....................................................................................24
Section 2.05 MATURITY OF LOANS........................................................................24
Section 2.06 INTEREST RATES...........................................................................24
Section 2.07 METHOD OF ELECTING INTEREST RATES........................................................26
Section 2.08 COMMITMENT FEES..........................................................................27
Section 2.09 TERMINATION OR REDUCTION OF COMMITMENTS..................................................27
Section 2.10 MANDATORY REPAYMENTS OF THE LOANS AND CASH COLLATERALIZATION
OF LETTERS OF CREDIT..................................................................27
Section 2.11 OPTIONAL PREPAYMENT OF THE LOANS.........................................................28
Section 2.12 GENERAL PROVISIONS AS TO PAYMENTS........................................................28
Section 2.13 FUNDING LOSSES...........................................................................28
Section 2.14 COMPUTATION OF INTEREST AND FEES.........................................................29
Section 2.15 CASH COLLATERAL ACCOUNT..................................................................29
Section 2.16 COMPUTATIONS OF OUTSTANDINGS; DETERMINATION OF AVAILABLE
AMOUNT OF ALTERNATIVE CURRENCY LETTERS OF CREDIT......................................30
Section 2.17 ALTERNATIVE CURRENCY LETTER OF CREDIT ISSUANCES.......................................31
ARTICLE 3
CONDITIONS
Section 3.01 CLOSING...............................................................................31
Section 3.02 AES FINANCE SUBSIDIARY ADDITION DATE..................................................33
Section 3.03 EXTENSION OF CREDIT...................................................................33
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.01 CORPORATE EXISTENCE AND POWER.........................................................34
Section 4.02 CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO CONTRAVENTION............................34
Section 4.03 COMPLIANCE WITH LAWS..................................................................35
Section 4.04 BINDING EFFECT........................................................................35
Section 4.05 FINANCIAL INFORMATION.................................................................35
Section 4.06 LITIGATION............................................................................35
Section 4.07 COMPLIANCE WITH ERISA.................................................................35
Section 4.08 ENVIRONMENTAL MATTERS.................................................................35
Section 4.09 TAXES.................................................................................36
Section 4.10 MATERIAL AES ENTITIES.................................................................36
Section 4.11 NOT AN INVESTMENT COMPANY.............................................................36
Section 4.12 PUBLIC UTILITY HOLDING COMPANY ACT....................................................36
Section 4.13 REPRESENTATIONS IN SUBSIDIARY GUARANTY TRUE AND CORRECT...............................37
Section 4.14 FULL DISCLOSURE.......................................................................37
Section 4.15 EXISTING LETTERS OF CREDIT............................................................37
ARTICLE 5
COVENANTS
Section 5.01 INFORMATION...........................................................................37
Section 5.02 PAYMENT OF OBLIGATIONS................................................................39
Section 5.03 MAINTENANCE OF PROPERTY; INSURANCE....................................................39
Section 5.04 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE......................................40
Section 5.05 COMPLIANCE WITH LAWS..................................................................40
Section 5.06 INSPECTION OF PROPERTY, BOOKS AND RECORDS.............................................40
Section 5.07 LIMITATION ON SUBSIDIARY DEBT.........................................................40
Section 5.08 MINIMUM CONSOLIDATED NET WORTH........................................................42
Section 5.09 RESTRICTED PAYMENTS...................................................................42
Section 5.10 NEGATIVE PLEDGE.......................................................................42
Section 5.11 CONSOLIDATIONS, MERGERS AND SALES OF ASSETS...........................................43
Section 5.12 USE OF PROCEEDS.......................................................................44
Section 5.13 CASH FLOW COVERAGE....................................................................44
Section 5.14 RECOURSE DEBT TO RECOURSE CAPITAL RATIO...............................................44
Section 5.15 TRANSACTION WITH AFFILIATES...........................................................44
Section 5.16 LIMITATION ON INVESTMENTS.............................................................45
ARTICLE 6
DEFAULTS
Section 6.01 EVENTS OF DEFAULT.....................................................................46
Section 6.02 NOTICE OF DEFAULT.....................................................................48
Section 6.03 CASH COLLATERAL.......................................................................48
ARTICLE 7
THE AGENT
Section 7.01 APPOINTMENT AND AUTHORIZATION.........................................................48
Section 7.02 AGENT AND AFFILIATES..................................................................48
Section 7.03 ACTION BY AGENT.......................................................................48
Section 7.04 CONSULTATION WITH EXPERTS.............................................................48
Section 7.05 LIABILITY OF AGENT....................................................................48
Section 7.06 INDEMNIFICATION.......................................................................49
Section 7.07 CREDIT DECISION.......................................................................49
Section 7.08 SUCCESSOR AGENT.......................................................................49
Section 7.09 AGENT'S FEE...........................................................................49
ARTICLE 8
CHANGE IN CIRCUMSTANCES
Section 8.01 BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR..............................49
Section 8.02 ILLEGALITY............................................................................50
Section 8.03 INCREASED COST AND REDUCED RETURN.....................................................50
Section 8.04 TAXES.................................................................................51
Section 8.05 BASE RATE LOANS SUBSTITUTED FOR AFFECTED EURO-DOLLAR LOANS............................53
ARTICLE 9
GUARANTY
Section 9.01 THE GUARANTY..........................................................................53
Section 9.02 GUARANTY UNCONDITIONAL................................................................54
Section 9.03 DISCHARGE ONLY UPON PAYMENT IN FULL, REINSTATEMENT IN
CERTAIN CIRCUMSTANCES..............................................................55
Section 9.04 WAIVER BY THE GUARANTORS..............................................................55
Section 9.05 SUBROGATION...........................................................................55
Section 9.06 STAY OF ACCELERATION..................................................................55
Section 9.07 LIMITATION OF LIABILITY...............................................................55
ARTICLE 10
MISCELLANEOUS
Section 10.01 NOTICES...............................................................................55
Section 10.02 NO WAIVERS............................................................................55
Section 10.03 EXPENSES; INDEMNIFICATION.............................................................56
Section 10.04 SHARING OF SET-OFFS...................................................................56
Section 10.05 AMENDMENTS AND WAIVERS................................................................56
Section 10.06 SUCCESSORS AND ASSIGNS................................................................57
Section 10.07 COLLATERAL............................................................................58
Section 10.08 GOVERNING LAW; SUBMISSION TO JURISDICTION.............................................58
Section 10.09 COUNTERPARTS; INTEGRATION; EFFECTIVENESS..............................................58
Section 10.10 CONFIDENTIALITY.......................................................................59
Section 10.11 WAIVER OF JURY TRIAL..................................................................59
Section 10.12 SEVERABILITY; MODIFICATION TO CONFORM TO LAW..........................................59
Section 10.13 APPOINTMENT OF AGENT FOR SERVICE OF PROCESS...........................................59
Section 10.14 JUDGMENT CURRENCY.....................................................................60
Appendix
Pricing Schedule
Schedule I - Existing Agreements with Affiliates
Schedule II - Existing Letters of Credit
Schedule III - Non-Conforming Letter of Credit
Exhibit A - Note
Exhibit B - Subsidiary Guaranty
Exhibit C-1 - Closing Date Opinion of the General Counsel of AES
Exhibit C-2 - Opinion of Xxxxx Xxxx & Xxxxxxxx, Special Counsel for AES
Exhibit D - Opinion of Cravath, Swaine & Xxxxx, Special Counsel for the Agent
Exhibit E - AES Finance Subsidiary Addition Date Opinion of the General Counsel of
AES
Exhibit F - Opinion of Counsel to an AES Finance Subsidiary in such AES Finance
Subsidiary's Jurisdiction of Incorporation
Exhibit G - Assignment and Assumption Agreement
Exhibit H - Form of Extension Agreement
CREDIT AGREEMENT
AGREEMENT dated as of March 31, 2000 among THE AES
CORPORATION, the BANKS listed on the signature pages hereof,
the FRONTING BANKS listed herein, BANK OF AMERICA, N.A., as
Documentation Agent, XXXXXX GUARANTY TRUST COMPANY OF NEW
YORK, as Syndication Agent and CITIBANK, N.A., as Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS. The following terms, as used herein, have
the following meanings:
"ADJUSTED LONDON INTERBANK OFFERED RATE" has the meaning set forth in
Section 2.06(b).
"ADJUSTED PARENT OPERATING CASH FLOW" means, for any period, (i) Parent
Operating Cash Flow for such period LESS (ii) the sum of the following expenses
(determined without duplication), in each case to the extent paid by a Borrower
during such period and regardless of whether any such amount was accrued during
such period:
(A) income tax expenses of AES and its Subsidiaries; and
(B) corporate overhead expenses.
"ADMINISTRATIVE QUESTIONNAIRE" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Agent and submitted to
the Agent (with a copy to AES) duly completed by such Bank.
"AES" means The AES Corporation, a Delaware corporation, and its
successors.
"AES BUSINESS" shall have the meaning set forth in Section 5.07(b)(i).
"AES ELECTRIC" means Applied Energy Services Electric Limited, an
English corporation, and its successors.
"AES FINANCE SUBSIDIARY" means any Wholly-Owned Consolidated Subsidiary
of AES organized under the laws of England, The British Virgin Islands, the
Netherlands, the Netherland Antilles or The Cayman Islands and designated by AES
in a writing delivered to the Agent as an AES Finance Subsidiary, and the
successors of each such Subsidiary.
"AES FINANCE SUBSIDIARY ADDITION DATE" means, with respect to any AES
Finance Subsidiary, the date on or after the Closing Date on which the Agent
shall have received the documents specified in or pursuant to Section 3.02 with
respect to such AES Finance Subsidiary.
"AES HAWAII MANAGEMENT" means AES Hawaii Management Company, Inc., a
Delaware corporation and a Subsidiary of AES, and its successors.
"AES MANAGEMENT GROUP" means (i) individuals who are members of the
board of directors or officers of AES or the president of any Material AES
Entity, (ii) their respective spouses, children, grandchildren, siblings and
parents, (iii) trusts established for the sole or principal benefit of Persons
described in clauses (i) and (ii) above, (iv) heirs, executors, administrators
and personal or legal representatives of Persons described in clauses (i) and
(ii) above, and (v) any corporation or other Person that is controlled by, and a
majority of the equity interests in which are directly owned by, Persons
described in clauses (i) and (ii) above.
"AES 1999 FORM 10-K" means AES's annual report on Form 10-K for the
year ended December 31, 1999, as filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934.
"AES OKLAHOMA" means AES Oklahoma Management Co., Inc., a Delaware
corporation and a Subsidiary of AES, and its successors.
"AES PLACERITA" means AES Placerita, Inc., a Delaware corporation and
an indirect Subsidiary of AES, and its successors.
"AES SOUTHLAND" means AES Southland Funding LLC, a Delaware limited
liability company and a Wholly-Owned Consolidated Subsidiary of AES, and its
successors.
"AES WARRIOR RUN" means AES Warrior Run Funding LLC, a Delaware limited
liability company and a Wholly-Owned Consolidated Subsidiary of AES, and its
successors.
"AFFILIATE" means (i) any Person that directly, or indirectly through
one or more intermediaries, controls AES (a "Controlling Person") or (ii) any
Person (other than AES or a Subsidiary) which is controlled by or is under
common control with a Controlling Person. As used herein, the term "control"
means possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"AGENT" means Citibank, N.A. in its capacity as agent for the Banks
hereunder, and its successors in such capacity.
"ALTERNATIVE CURRENCY" means (i) any lawful currency (other than
Dollars) that is freely transferable and convertible into Dollars or (ii) with
respect to any Letter of Credit issued by a Fronting Bank, any other lawful
currency (other than Dollars) that such Fronting Bank agrees may be used as the
designated currency of such Letter of Credit; PROVIDED that such Fronting Bank
is able to provide, and continues to provide, to the Agent the information
required pursuant to Section 2.16(b) with respect to such Letter of Credit.
"ALTERNATIVE CURRENCY LETTER OF CREDIT" means any Letter of Credit
having a stated amount denominated in an Alternative Currency.
"APPLICABLE LENDING OFFICE" means, with respect to any Bank, (i) in the
case of its Base Rate Loans, its Domestic Lending Office and (ii) in the case of
its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"ASSET DISPOSITION" has the meaning set forth in the Existing
Subordinated Note Indentures.
"ASSIGNEE" has the meaning set forth in Section 10.06(c).
"AUTOMATIC ACCELERATION EVENT" means the occurrence, with respect to
any Borrower, of any of the Events of Default listed in clauses (g) and (h) of
Section 6.01.
"AVAILABLE AMOUNT" means, for any Letter of Credit on any date of
determination, the maximum aggregate amount (which, in the case of an
Alternative Currency Letter of Credit, shall be the Dollar Equivalent of such
amount) available to be drawn under such Letter of Credit at any time on or
after such date, the determination of such maximum amount to assume the
compliance with and satisfaction of all conditions for drawing enumerated
therein.
"BANK" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 10.06(c), and their respective
successors.
"BASE RATE" means, for any day, a rate per annum equal to the higher of
(i) the rate of interest publicly announced by Citibank, N.A. from time to time
as its Base Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal
Funds Rate for such day.
"BASE RATE LOAN" means a Loan which bears interest at the Base Rate
pursuant to the applicable Notice of Borrowing or Notice of Interest Rate
Election or the provisions of Section 2.07(a) or Article 8.
"BENEFIT ARRANGEMENT" means, at any time, an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"BORROWER" means (i) prior to the first AES Finance Subsidiary Addition
Date, AES and (ii) from and after the first AES Finance Subsidiary Addition
Date, AES or an AES Finance Subsidiary, as the context may require; prior to the
first AES Finance Subsidiary Addition Date, "Borrowers" means AES and from and
after the first AES Finance Subsidiary Addition Date, "Borrowers" means AES and
each AES Finance Subsidiary.
"BORROWING" means a borrowing hereunder consisting of Loans made to a
single Borrower at the same time by the Banks pursuant to Article 2. A Borrowing
is a "Base Rate Borrowing" if such Loans are Base Rate Loans or a "Euro-Dollar
Borrowing" if such Loans are Euro-Dollar Loans.
"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participants or other equivalents (however designated, whether voting
or non-voting) of, or interests in (however designated), the equity of such
Person, including, without limitation, all common stock and preferred stock and
partnership and joint venture interests of such Person.
"CASH COLLATERAL ACCOUNT" has the meaning set forth in Section 2.15.
"CASH FLOW COVERAGE RATIO" means, for any period, the ratio of (i)
Adjusted Parent Operating Cash Flow for such period to (ii) Corporate Charges
for such period.
"CLOSING DATE" means the date on or after the Effective Date on which
the Agent shall have received the fees and documents specified in or pursuant to
Section 3.01.
"COMMITMENT" means, with respect to each Bank, the amount set forth
opposite the name of such Bank in the Appendix hereto, as such amount may be
reduced from time to time pursuant to Section 2.09.
"CONDUIT LENDER" means any special purpose corporation organized and
administered by any Bank for the purpose of making Loans hereunder otherwise
required to be made by such Bank and designated by such Bank in a written
instrument, subject to the consent of the Agent and AES (which, in each case,
shall not be unreasonably withheld or delayed); PROVIDED, that the designation
by any Bank of a Conduit Lender shall not relieve the designating Bank of any of
its obligations to fund a Loan under the Agreement if, for any reason, its
Conduit Lender fails to fund any such Loan, and the designating Bank (and not
the Conduit Lender) shall have the sole right and responsibility to deliver all
consents and waivers required or requested under this Agreement with respect to
its Conduit Lender, and provided, further, that no Conduit Lender shall (a) be
entitled to receive any greater amount pursuant to Section 8.03, 8.04 or 10.03
than the designating Lender would have been entitled to receive in respect of
the extensions of credit made by such Conduit Lender or (b) be deemed to have
any Commitment hereunder.
"CONSOLIDATED NET INCOME" means, for any period, the consolidated net
income (or loss) of AES and its Consolidated Subsidiaries for such period.
"CONSOLIDATED NET WORTH" means, at any date, the consolidated
stockholders' equity of AES and its Consolidated Subsidiaries determined as of
such date without giving effect to any accumulated other comprehensive gain or
loss after December 31,
1999 plus, to the extent not otherwise included therein, the liquidation
preference at such date of non-redeemable preferred stock of AES.
"CONSOLIDATED SUBSIDIARY" means, at any date with respect to any
Person, any Subsidiary of such Person or other entity the accounts of which
would be consolidated with those of such Person in its consolidated financial
statements if such statements were prepared as of such date.
"CORPORATE CHARGES" means, for any period, the sum of the following
amounts (determined without duplication), in each case to the extent paid by a
Borrower during such period and regardless of whether any such amount was
accrued during such period:
(A) interest expense of any Borrower for such period:
(i) including, without limitation, interest expense
attributable to (x) the accretion of original issue discount on Debt
issued at less than face value thereof and (y) any interest added to
the principal amount of Debt but;
(ii) excluding any interest expense to the extent that (x) AES
has the option or obligation to pay or satisfy such interest expense by
the issuance of Capital Stock of AES or other securities of AES which
would not constitute Recourse Debt and (y) AES has not paid or
satisfied such interest expense during such period with cash or by the
issuance of Recourse Debt; and
(B) rental expense of any Borrower for such period; and
(C) dividends paid on AES's Redeemable Stock during such period.
"DEBT" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee which are capitalized in
accordance with generally accepted accounting principles, (v) all obligations
(whether contingent or non-contingent) of such Person to reimburse any bank or
other Person in respect of amounts paid under a letter of credit, surety or
performance bond or similar instrument, (vi) all Debt secured by a Lien on any
asset of such Person,
whether or not such Debt is otherwise an obligation of such Person, (vii) all
Debt of others Guaranteed by such Person and (viii) all Redeemable Stock of such
Person valued at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends. For purposes hereof, contingent
obligations of the type described in clause (v) of this definition with respect
to letters of credit not issued hereunder shall not be treated as "Debt"
hereunder to the extent that such obligations are cash collateralized or to the
extent that the issuer of any such letter of credit is entitled to draw under a
Letter of Credit issued hereunder which by its terms requires that drawings
under such Letter of Credit be applied only to reimburse such issuer for amounts
paid by such issuer under such letter of credit. The obligations of AES under
any agreement, in the form of indemnity or contingent equity contribution
agreement or otherwise, pursuant to which AES agrees to protect any Person, in
whole or in part, from tax liabilities, environmental liabilities, political
risks, including currency convertibility and transferability risk and changes in
law, or construction cost overruns shall not constitute Debt.
"DEFAULT" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"DERIVATIVES OBLIGATIONS" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
For purposes of determining the Recourse Debt to Recourse Capital Ratio on any
date, the Derivatives Obligations of AES shall be determined on a "xxxx to
market" basis on such date.
"DESIGNATED SUBSIDIARY" means each of AES Connecticut Management Co.,
Inc., AES Oklahoma, AES Hawaii Management, AES Thames, Inc., AES Hawaii, Inc.,
AES Shady Point, Inc., AES Southland and AES Warrior Run.
"DOLLAR EQUIVALENT" means, on any date of determination with respect to
any Alternative Currency Letter of Credit, (i) in calculating the maximum
aggregate amount available to be drawn under such Alternative Currency Letter of
Credit at any time on or after such date, the amount thereof in Dollars most
recently reported to the Agent pursuant to Section 2.16(b) and (ii) in
calculating the amount of any Drawing under such
Alternative Currency Letter of Credit, the aggregate amount of Dollars paid by
the relevant Fronting Bank to purchase the Alternative Currency paid by such
Fronting Bank in respect of such Drawing.
"DOMESTIC BUSINESS DAY" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized by law to
close.
"DOMESTIC LENDING OFFICE" means, as to each Bank, its office located at
its address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to AES and the Agent.
"DRAWING" means a drawing effected under any Letter of Credit.
"EFFECTIVE DATE" means the date this Agreement becomes effective in
accordance with Section 10.09.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
the environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment, including, without limitation, ambient air, surface
water, ground water or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.
"EQUITY CREDIT PREFERRED SECURITIES" means, at any date:
(i) Debt of AES (A) that is owed to a Special Purpose
Financing Subsidiary of AES, (B) that is issued in connection with the
issuance by such Special Purpose Financing Subsidiary of Trust
Preferred Securities, (C) that is subordinated in right of payment to
other Debt of AES of at least the types and to at least the extent as
was, on the date of issuance thereof, the Junior Subordinated
Debentures issued by AES in connection with the issuance by AES Trust
II of its $2.75 Term Convertible Securities, Series B, on October 29,
1996 (or otherwise
satisfactory to the Agent), (D) as to which, at such date, AES has the
right to defer the payment of all interest for the period of at least
19 consecutive quarters beginning at such date and (E) that does not
mature, in whole or in part, and is not subject to any required
repayment or prepayment, any required sinking fund or similar payment
or any repayment or prepayment or sinking fund or similar payment at
the option of the holder thereof, prior to the fifth anniversary of the
Termination Date; and
(ii) Guarantees by AES of the obligations of the issuer of any
Trust Preferred Securities in respect of such Trust Preferred
Securities; and
(iii) Mandatorily convertible securities (such as those known
as "DECS" (including tax deductible DECS)) consisting of Debt of AES
that is subordinated in right of payment to other Debt of AES of at
least the types and to at least the extent as was, on the date of
issuance thereof, the Junior Subordinated Debentures issued by AES in
connection with the issuance by AES Trust II of its $2.75 Term
Convertible Securities, Series B, on October 29, 1996, (or otherwise
satisfactory to the Agent) and which is mandatorily convertible into,
or redeemable with the proceeds of, Capital Stock of AES (other than
Redeemable Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA GROUP" means AES, its Subsidiaries and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with AES or any of its
Subsidiaries, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"EURO-DOLLAR BUSINESS DAY" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"EURO-DOLLAR LENDING OFFICE" means, as to each Bank, its office, branch
or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to AES and the Agent.
"EURO-DOLLAR LOAN" means a Loan which bears interest at a Euro-Dollar
Rate
pursuant to the applicable Notice of Borrowing or Notice of Interest Rate
Election.
"EURO-DOLLAR MARGIN" has the meaning set forth in Section 2.06(b).
"EURO-DOLLAR RESERVE PERCENTAGE" has the meaning set forth in Section
2.06(b).
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01.
"EXISTING CREDIT FACILITY" means the Credit Agreement, dated as of
December 19, 1997, as amended and restated as of March 31, 1999 and as amended
pursuant to Amendment No. 1 thereto dated as of May 21, 1999, Amendment No. 2
thereto dated as of July 27, 1999, and Amendment No. 3 thereto dated as of
September 28, 1999, among the Account Party, the banks listed therein, the
Fronting Banks listed therein, and Xxxxxx Guaranty Trust Company of New York, as
Agent, as the same may be amended, modified, supplemented, extended, renewed,
refinanced or replaced and in effect from time to time.
"EXISTING LOC FACILITY" means the Letter of Credit and Reimbursement
Agreement among AES as Account Party, the several banks and financial
institutions parties hereto from time to time as Participating Banks, the Letter
of Credit issuing banks parties hereto from time to time as Issuing Banks, Union
Bank of California, N.A., as Administrative Agent, Xxxxxx Guaranty Trust Company
of New York, as Syndication Agent and Bank of America, N.A., as Documentation
Agent, dated as of October 19, 1999.
"EXISTING LETTER OF CREDIT" means a Letter of Credit (as defined in the
Existing Credit Facility or the Existing LOC Facility) issued under the Existing
Credit Facility or the Existing LOC Facility that is outstanding on the
Effective Date and listed on Schedule II.
"EXISTING TRUST PREFERRED SECURITIES" means (i) the $3.375 Trust
Preferred Securities, Series C issued by AES Trust III on October 7, 1999, (ii)
the $2.75 Term Convertible Securities, Series B issued by AES Trust II on
October 29, 1996, (iii) the $2.6875 Term Convertible Securities, Series A issued
by AES Trust I on March 24, 1997 and (iv) the Trust Preferred Securities issued
by AES Rhinos Trust I, II and III on November 15, 1999.
"EXTENSION DATE" has the meaning set forth in Section 2.01(b).
"EXTENSION OF CREDIT" means (i) a Borrowing pursuant to Section 2.01 or
(ii) the issuance of a Letter of Credit pursuant to Section 2.03.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day; PROVIDED that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to Citibank, N.A. on such day on such
transactions as determined by the Agent.
"FINANCING DOCUMENTS" means this Agreement, the Notes and each
Subsidiary Guaranty.
"FRONTING BANK" means (i) with respect to each Existing Letter of
Credit deemed to have been issued pursuant to the second sentence of Section
2.03(a), each Bank listed as issuer thereof on Schedule II hereto, as the case
may be, and (ii) with respect to all other Letters of Credit, Citibank, N.A.,
any other Bank, any affiliate of any Bank (A) a majority of whose common equity
is owned, directly or indirectly, by such Bank, (B) that owns, directly or
indirectly, a majority of the common equity of such Bank or (C) a majority of
whose common equity is owned, directly or indirectly, by a Person that owns,
directly or indirectly, a majority of the common equity of such Bank and any
Subsidiary of any Bank a majority of whose common equity is owned directly or
indirectly, by such Bank, that shall, in the case of any such Bank, affiliate or
Subsidiary agree to issue letters of credit hereunder with the consent of the
Agent (which consent will be deemed to have been given unless the Agent shall
have notified AES to the contrary within one day of the Agent's receipt of
notice that such Bank, affiliate or Subsidiary is to be a Fronting Bank).
"GROUP OF LOANS" means, at any time, a group of Loans consisting of (i)
all Loans which are Base Rate Loans at such time or (ii) all Euro-Dollar Loans
having the same Interest Period at such time; PROVIDED that, if a Loan of any
particular Bank is converted to or made as a Base Rate Loan pursuant to Article
8, such Loan shall be included in the same Group or Groups of Loans from time to
time as it would have been
in if it had not been so converted or made.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in whole or in
part); PROVIDED that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"GUARANTOR" means, with respect to any Borrower, all other Borrowers.
"HAZARDOUS SUBSTANCES" means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives, by-products
and other hydrocarbons, or any substance having any constituent elements
displaying any of the foregoing characteristics.
"INDEMNITEE" has the meaning set forth in Section 10.03(b).
"INTEREST PERIOD" means, with respect to each Euro-Dollar Loan, the
period commencing on the date of borrowing specified in the applicable Notice of
Borrowing or on the date specified in an applicable Notice of Interest Rate
Election and ending one, two, three or six months thereafter, as the applicable
Borrower may elect in such notice; PROVIDED that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to
clause (c) below, end on the last Euro-Dollar Business Day of a
calendar month; and
(c) any Interest Period that would otherwise end after the
Termination Date shall end on the Termination Date.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"INVESTMENT" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, Guarantee, time deposit or otherwise
(but not including any demand deposit).
"LETTER OF CREDIT" means a letter of credit issued by a Fronting Bank
pursuant to Section 2.03(a).
"LETTER OF CREDIT COMMISSION RATE" means a rate per annum determined in
accordance with the annexed Pricing Schedule.
"LETTER OF CREDIT LIABILITIES" means, at any time and in respect of any
Letter of Credit, the sum, without duplication, of (i) the Available Amount of
such Letter of Credit plus (ii) the aggregate unpaid amount of all Reimbursement
Obligations in respect of previous Drawings made under such Letter of Credit.
"LEVEL I STATUS" has the meaning set forth in the annexed Pricing
Schedule.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, AES or
any of its Subsidiaries shall be deemed to own subject to a Lien any asset which
it has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such asset.
"LOAN" means a Base Rate Loan or a Euro-Dollar Loan and "Loans" means
Base Rate Loans or Euro-Dollar Loans or any combination of the foregoing.
"LONDON INTERBANK OFFERED RATE" has the meaning set forth in Section
2.06(b).
"MATERIAL AES ENTITY" means (i) any Subsidiary Guarantor, (ii) any
Specified Subsidiary and (iii) any other Person in which AES has a direct or
indirect equity Investment if such Person's contribution to Parent Operating
Cash Flow for the four most recently completed fiscal quarters of AES
constitutes 15% or more of Parent Operating Cash Flow for such period.
"MATERIAL DEBT" means, with respect to any Person, Debt (other than the
Loans and the Reimbursement Obligations) of such Person arising in one or more
related or unrelated transactions, in an aggregate principal amount exceeding
$50,000,000.
"MATERIAL PLAN" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $50,000,000.
"MINIMUM CP RATING" means (i) A-1 for Standard & Poor's Ratings
Services, (ii) P-1 for Xxxxx'x Investors Service, Inc., (iii) F-1 for Fitch
IBCA, Inc. and (iv) D-1 for Duff & Xxxxxx Credit Rating Co.
"MULTIEMPLOYER PLAN" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
"NET CASH PROCEEDS" has the meaning set forth in (i) the Indenture
dated as of July 17, 1997 between AES and The Bank of New York, as Trustee,
relating to AES's 8-3/8% Senior Subordinated Notes due 2007, (ii) the Indenture
dated as of July 1, 1996 between AES and First National Bank of Chicago, as
Trustee, relating to AES's 10-1/4% Senior Subordinated Notes due 2006 and (iii)
the Indenture dated as of October 29, 1997 between AES and The First National
Bank of Chicago, as Trustee, relating to AES's 8.50% Senior Subordinated Notes
due 2007 and AES's 8.875% Senior Subordinated Debentures due 2027, as such
Indentures, to the extent permitted by the terms of this Agreement, may be
amended, modified or supplemented and in effect from time to time.
"NOTES" means promissory notes of each Borrower, substantially in the
form of Exhibit A hereto, evidencing the obligation of such Borrower to repay
the Loans made to it, and "Note" means any one of such promissory notes issued
hereunder.
"NOTICE OF BORROWING" has the meaning set forth in Section 2.02.
"NOTICE OF INTEREST RATE ELECTION" has the meaning set forth in Section
2.07(a).
"NOTICE OF ISSUANCE" has the meaning set forth in Section 2.03(d).
"OBLIGORS" means the Borrowers and the Subsidiary Guarantors.
"PARENT" means, with respect to any Bank or Fronting Bank, any Person
controlling such Bank or Fronting Bank, as the case may be.
"PARENT OPERATING CASH FLOW" means, for any period, the sum of the
following amounts (determined without duplication), but only to the extent
received in cash by a Borrower from a Person other than a Borrower during such
period:
(A) dividends paid to a Borrower by its Subsidiaries during such
period;
(B) consulting and management fees paid to a Borrower for such period;
(C) tax sharing payments made to a Borrower during such period;
(D) interest and other distributions paid during such period with
respect to cash and other Temporary Cash Investments of a Borrower (other than
with respect to amounts on deposit in the Cash Collateral Account); and
(E) other cash payments made to a Borrower by its Subsidiaries other
than (i) returns of invested capital, (ii) payments of the principal of Debt of
any such Subsidiary to such Borrower, and (iii) payments in an amount equal to
the aggregate amount released from debt service reserve accounts upon the
issuance of Letters of Credit for the benefit of the beneficiaries of such
accounts.
For purposes of determining Parent Operating Cash Flow:
(1) net cash payments received by a Qualified Holding Company during
any period which could have been (without regard for any cash held by such
Qualified Holding Company at the beginning of such period), but were not, paid
as a dividend to AES during such period due to tax or other cash management
considerations may be
included in Parent Operating Cash Flow for such period; PROVIDED that any
amounts so included will not be included in Parent Operating Cash Flow if and
when paid to a Borrower in any subsequent period;
(2) if at any time there shall exist an event or condition which
permits any holder to accelerate the maturity date of any Debt of, or terminate
its commitment to extend credit to, any Subsidiary, then the contributions of
such Subsidiary to Parent Operating Cash Flow for any period ending at or prior
to such time shall be eliminated and Parent Operating Cash Flow shall be
calculated after giving effect to such elimination;
(3) if any Subsidiary of a Borrower is sold or otherwise disposed of
(by way of merger, sale of Capital Stock, sale of assets or otherwise), (x) the
Net Cash Proceeds from such sale or other disposition shall not be included in
Parent Operating Cash Flow for any period and (y) the contributions of such
Subsidiary to Parent Operating Cash Flow for any period shall be eliminated and
Parent Operating Cash Flow shall be calculated after giving effect to such
elimination;
(4) no dividends, fees or payments made to the Borrowers with the
proceeds of any amounts paid to AES or any of its Subsidiaries in connection
with the $525,000,000 additional prepayment made by Connecticut Light & Power
("CL&P") pursuant to the First Amendment to the Electricity Purchase Agreement
between CL&P and AES Thames, Inc., or any amounts paid to AES or any of its
Subsidiaries in connection with any monetization, sale or securitization of any
right to receive any such prepayment, shall be included in Parent Operating Cash
Flow, except to the extent that such proceeds (x) have been received by AES in
cash in such period or an earlier period and (y) are included in Consolidated
Net Income for such period; and
(5) no development fees paid to the Borrowers by the electric
generating facility owned by AES in Puerto Rico shall be included in Parent
Operating Cash Flow.
"PARTICIPANT" has the meaning set forth in Section 10.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"`PERSON" means an individual, a corporation, a partnership, an
association, a
trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"PLAN" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"POWER PROJECT" means an electric power or thermal energy generation or
cogeneration facility or related facilities, or an electric distribution or
transmission company, and its or their related electric power transmission,
distribution, fuel supply and fuel transportation facilities, together with its
or their related power supply, thermal energy and fuel contracts as well as
other contractual arrangements with customers, suppliers and contractors.
"QUALIFIED HOLDING COMPANY" means any Wholly-Owned Consolidated
Subsidiary of AES that satisfies, and all of whose direct or indirect holding
companies (other than AES) are Wholly-Owned Consolidated Subsidiaries of AES
that satisfy, the following conditions:
(i) its direct and indirect interest in any AES Business shall
be limited to the ownership of Capital Stock or Debt obligations of a
Person with a direct or indirect interest in such AES Business;
(ii) no consensual encumbrance or restriction of any kind
shall exist on its ability to make payments, distributions, loans,
advances or transfers to AES;
(iii) it shall not have outstanding any Debt other than
Guarantees of Debt under the Financing Documents and Debt to other
Qualified Holding Companies; and
(iv) it shall engage in no business or other activity, shall
enter into no binding agreements and shall incur no obligations other
than (A) the holding of the Capital Stock and Debt obligations
permitted under clause (i) above, (B) the holding of cash received from
its Subsidiaries and the investment thereof in
Temporary Cash Investments, (C) the payment of dividends to AES, (D)
ordinary business development activities, (E) the making (but not the
entering into binding obligations to make) of Investments in AES
Businesses owned by its Subsidiaries and (F) in the case of AES
Electric, the making of Investments in Power Projects owned by NIGEN
Limited and Medway Power Limited as of the date of this Agreement under
any agreement by which it is bound as of the date of this Agreement.
"QUARTERLY PAYMENT DATE" means each March 31, June 30, September 31 and
December 31.
"RECOURSE DEBT" means, on any date, the sum of (A) Debt of AES (other
than Equity Credit Preferred Securities) plus (B) Derivative Obligations of AES.
"RECOURSE DEBT TO RECOURSE CAPITAL RATIO" means, on any date, the ratio
of: (i) the sum on such date Recourse Debt to;
(ii) the sum on such date of (A) Consolidated Net Worth on such date
PLUS (B) Recourse Debt.
"REDEEMABLE STOCK" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the first anniversary of the Termination Date, (ii) redeemable at the option of
the holder of such class or series of Capital Stock at any time prior to the
first anniversary of the Termination Date or (iii) convertible into or
exchangeable for (unless solely at the option of such person) Capital Stock
referred to in clause (i) or (ii) above or Debt having a scheduled maturity
prior to the first anniversary of the Termination Date; provided that any
Capital Stock that would not constitute Redeemable Stock but for provisions
thereof giving holders thereof the right to require such person to repurchase or
redeem such Capital Stock upon the occurrence of an "asset sale" or a "change of
control" occurring prior to the first anniversary of the Termination Date shall
not constitute Redeemable Stock if such Capital Stock specifically provides that
such person will not repurchase or redeem any such Capital Stock pursuant to
such provisions unless such repurchase or redemption is permitted under the
terms of this Agreement.
"REFERENCE BANKS" means the respective principal London offices of
Citibank, N.A., Xxxxxx Guaranty Trust Company of New York and Bank of America,
N.A., and "
REFERENCE BANK" means any one of such Reference Banks.
"REFUNDING BORROWING" means a Borrowing which, after application of the
proceeds thereof, results in no net increase in the Total Outstandings of any
Bank.
"REGULATION G" means Regulation G of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT OBLIGATIONS" means at any date the obligations then
outstanding of the Borrowers under Section 2.03(f) to reimburse the Fronting
Banks for amounts drawn under Letters of Credit.
"REQUIRED BANKS" means at any time Banks having at least a majority of
the aggregate Total Exposures at such time.
"RESTRICTED PAYMENT" means (i) any dividend or other distribution on
any shares of AES's Capital Stock (other than Redeemable Stock) (except
dividends payable solely in shares of its Capital Stock (other than Redeemable
Stock) or (ii) any payment (except any payment payable solely in shares of
Capital Stock (other than Redeemable Stock)) on account of the purchase,
redemption, retirement or acquisition of (a) any shares of AES's Capital Stock
(other than Redeemable Stock) or (b) any option, warrant or other right to
acquire shares of AES's Capital Stock (other than Redeemable Stock).
"REVOLVING CREDIT PERIOD" means the period from and including the
Effective Date to but excluding the Termination Date.
"SIGNIFICANT AES ENTITY" means (i) any Material AES Entity and (ii) any
other Person in which AES has a direct or indirect equity Investment if (A) such
Person's contribution to Parent Operating Cash Flow for the four most recently
completed fiscal quarters of AES constitutes 10% or more of Parent Operating
Cash Flow for such period, or (B) AES's direct or indirect interest in the total
assets of such Person if such Person is a Consolidated Subsidiary or in the net
assets of such Person in all other cases is at least equal to 10% of the
consolidated assets of AES and its Consolidated Subsidiaries, taken as a whole,
or AES's direct or indirect interest in the total net income of such Person (for
the preceding fiscal quarter) is at least equal to 10% of the net income of AES
and its Consolidated Subsidiaries (for the preceding fiscal quarter) taken as a
whole.
"SOUTHLAND" means AES Southland Holdings, LLC.
"SPECIAL PURPOSE FINANCING SUBSIDIARY" means a Consolidated Subsidiary
that has no direct or indirect interest in a Power Project or other AES Business
and was formed solely for the purpose of issuing Equity Credit Preferred
Securities.
"SPECIFIED SUBSIDIARY" means each Designated Subsidiary and each other
Subsidiary of AES that holds, directly or indirectly, any interest in any
Designated Subsidiary.
"SUBSIDIARY" means, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly owned by
such Person.
"SUBSIDIARY GUARANTORS" means AES Oklahoma, AES Hawaii Management, AES
Southland and AES Warrior Run.
"SUBSIDIARY GUARANTY" means a Subsidiary Guaranty, substantially in the
form of Exhibit B hereto, given by one or more Subsidiary Guarantors for the
benefit of the Banks, the Fronting Banks and the Agent, as the same may be
amended from time to time.
"TEMPORARY CASH INVESTMENT" means any Investment in (A)(i) direct
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, (ii) commercial paper
rated at least the Minimum CP Rating by any two of Standard & Poor's Ratings
Services, Xxxxx'x Investors Service, Inc., Fitch IBCA, Inc. and Duff & Xxxxxx
Credit Rating Co., PROVIDED that one of such two Minimum CP Ratings is by
Standard & Poor's Ratings Services of Xxxxx'x Investors Service, Inc., (iii)
time deposits with, including certificates of deposit issued by, any office
located in the United States of any bank or trust company which is organized or
licensed under the laws of the United States or any state thereof and has
capital, surplus and undivided profits aggregating at least $500,000,000, (iv)
medium term notes, asset backed securities, bonds, notes and letter of credit
supported instruments, issued by any entity organized under the laws of the
United States, or any state or municipality of the United States and rated in
any of the three highest rated categories by Standard & Poor's Ratings Services
or Xxxxx'x Investors Service, Inc., (v) repurchase agreements with respect to
securities described in clause (i) above entered into with an office of a
bank or trust company meeting the criteria specified in clause (iii) above, (vi)
Euro-Dollar certificates of deposit issued by any bank or trust company which
has capital and unimpaired surplus of not less than $500,000,000 or (vii) with
respect to a Subsidiary, any category of investment designated as permissible
investments under such Subsidiary's project loan documentation; PROVIDED in each
case (except clause (vii)) that such Investment matures within fifteen months
from the date of acquisition thereof by AES or a Subsidiary and (B) registered
investment companies that are "money market funds" within the meaning of Rule
2a-7 under the Investment Company Act of 1940.
"TERMINATION DATE" means March 31, 2003, or such later date to which
the Termination Date shall have been extended pursuant to Section 2.01(b), or,
if such day is not a Euro-Dollar Business Day, the next succeeding Euro-Dollar
Business Day unless such Euro-Dollar Business Day falls in another calendar
month, in which case the Termination Date shall be the next preceding
Euro-Dollar Business Day.
"TOTAL EXPOSURE" means at any time with respect to each Bank, its
Commitment or, if the Commitments shall have terminated, its Total Outstandings.
"TOTAL OUTSTANDINGS" means at any time, as to any Bank, the sum of the
aggregate outstanding principal amount of such Bank's Loans and its
participation in the aggregate outstanding Letter of Credit Liabilities.
"TRUST PREFERRED SECURITIES" means, at any date:
(i) any Existing Trust Preferred Securities, and
(ii) any other equity interests in a Special Purpose Financing
Subsidiary of AES (such as those known as "TECONS", "MIPS" or
"RHINOS"): (I) that are not (A) required to be redeemed or redeemable
at the option of the holder thereof prior to the fifth anniversary of
the Termination Date or (B) convertible into or exchangeable for
(unless solely at the option of AES) equity interests referred to in
clause (A) above or Debt having a scheduled maturity, or requiring any
repayments or prepayments of principal or any sinking fund or similar
payments in respect of principal or providing for any such repayment,
prepayment, sinking fund or other payment at the option of the holder
thereof prior to the fifth anniversary of the Termination Date and (II)
as to which, at such date, AES has the right to defer the payment of
all dividends and other distributions in respect thereof for the period
of at least 19 consecutive quarters beginning at such date.
"UNFUNDED LIABILITIES" means, with respect to any Plan at any time, the
amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"UNITED STATES" means the United States of America, including the
States and the District of Columbia, but excluding its territories and
possessions.
"WHOLLY-OWNED CONSOLIDATED SUBSIDIARY" means any Consolidated
Subsidiary all of the shares of Capital Stock or other ownership interests of
which (except directors' qualifying shares) are at the time directly or
indirectly owned by AES.
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time, applied
on a basis consistent (except for changes concurred in by AES's independent
public accountants) with the most recent audited consolidated financial
statements of AES and its Consolidated Subsidiaries delivered to the Banks;
PROVIDED that, if AES notifies the Agent that AES wishes to amend any covenant
in Article 5 to eliminate the effect of any change in generally accepted
accounting principles on the operation of such covenant (or if the Agent
notifies AES that the Required Banks wish to amend Article 5 for such purpose),
then AES's compliance with such covenant shall be determined on the basis of
generally accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to AES and the Required Banks.
SECTION 1.03. TYPES OF BORROWING. The term "BORROWING" denotes (i) the
aggregation of Loans made or to be made to a Borrower by one or more Banks
pursuant to Article 2 on the same day, all of which Loans are of the same type
(subject to Article 8) and, except in the case of Base Rate Loans, have the same
initial Interest Period or (ii) if the context so requires, the borrowing of
such Loans. Borrowings are classified for purposes hereof by reference to the
pricing of Loans comprising such Borrowing (E.G., a "EURO-DOLLAR BORROWING" is a
Borrowing comprised of Euro-Dollar Loans).
SECTION 1.04. CURRENCY EQUIVALENTS GENERALLY. For all purposes of this
Agreement, the equivalent in any Alternative Currency of an amount in Dollars
shall be determined at the rate of exchange quoted by the Agent in New York, at
11:00 A.M. (New York time) on the date of determination, to prime banks in New
York for the spot purchase in the New York foreign exchange market of such
amount of Dollars with such Alternative Currency.
ARTICLE 2
THE CREDITS
SECTION 2.01. COMMITMENTS TO LEND.
(a) Each Bank severally agrees, on the terms and conditions set forth
in this Agreement, to make loans to the Borrowers pursuant to this
Section 2.01 (a) from time to time during the Revolving Credit Period in
amounts such that the Total Outstandings of such Bank at any time shall not
exceed the amount of its Commitment at such time. Each Borrowing under this
subsection (a) shall be in an aggregate principal amount of $5,000,000 or any
larger multiple of $1,000,000 (except that any such Borrowing may be in the
aggregate amount available in accordance with Section 3.03(c)) and shall be
made from the several Banks ratably in proportion to their respective
Commitments. Within the foregoing limits, a Borrower may borrow under this
Section 2.01 (a), repay, or, to the extent permitted by Section 2.11, prepay
Loans and reborrow at any time during the Revolving Credit Period.
(b) EXTENSION OF TERMINATION DATE. The Termination Date may be
extended, in the manner set forth in this subsection (b), on March 31, 2002 and
on March 31, 2003 (each, an "EXTENSION DATE"), in each case for a period of one
year after the Termination Date theretofore in effect. If AES wishes to request
an extension of the Termination Date on any Extension Date, it shall give
written notice to that effect to the Agent not less than 45 nor more than 60
days prior to such Extension Date, whereupon the Agent shall notify each of the
Banks of such notice. Each Bank will use its best efforts to respond to such
request, whether affirmatively or negatively, within 30 days. If all Banks
respond affirmatively (any Bank which does not respond being deemed to have
responded negatively), then, subject to receipt by the Agent prior to such
Extension Date of
counterparts of an Extension Agreement in substantially the form of Exhibit H
duly completed and signed by all of the parties hereto, the Termination Date
shall be extended, effective on such Extension Date, for a period of one year to
the date stated in such Extension Agreement.
SECTION 2.02. NOTICE OF BORROWING. (a) The relevant Borrower shall give
the Agent notice (a "NOTICE OF BORROWING") not later than 11:00 A.M. (New York
City time) on (x) the date of each Base Rate Borrowing and (y) the third
Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing are to bear
interest initially at the Base Rate or a Euro-Dollar Rate, and
(iv) in the case of a Euro-Dollar Borrowing, the duration of
the initial Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing, the Agent shall promptly
notify each Bank of the contents thereof and of such Bank's ratable share of
such Borrowing and such Notice of Borrowing shall not thereafter be revocable by
any Borrower.
(c) Not later than 2:00 P.M. (New York City time) on the date of each
Borrowing, each Bank shall (except as provided in subsection (d) of this
Section) make available its ratable share of such Borrowing, in Federal or other
funds immediately available in New York City, to the Agent at its address
referred to in Section 10.01. Unless the Agent determines that any applicable
condition specified in Article 3 has not been satisfied, the Agent will make the
funds so received from the Banks available to the Borrower requesting such
Borrowing at the Agent's aforesaid address.
(d) If any Bank makes a new Loan hereunder to any Borrower on a day on
which such Borrower is to repay all or any part of an outstanding Loan from such
Bank, such Bank shall apply the proceeds of its new Loan to make such repayment
and only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such Bank to the
Agent as provided in
subsection (c), or remitted by such Borrower to the Agent as provided in Section
2.12, as the case may be.
(e) Unless the Agent shall have received notice from a Bank prior to
the date of any Borrowing that such Bank will not make available to the Agent
such Bank's share of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such Borrowing in
accordance with subsections (c) and (d) of this Section 2.02 and the Agent may,
in reliance upon such assumption, make available to the Borrower requesting such
Borrowing on such date a corresponding amount. If and to the extent that such
Bank shall not have so made such share available to the Agent, such Bank and
such Borrower severally agree to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to such Borrower until the date such amount is
repaid to the Agent, at (i) in the case of such Borrower, a rate per annum equal
to the higher of the Federal Funds Rate and the interest rate applicable thereto
pursuant to Section 2.06 and (ii) in the case of such Bank, the Federal Funds
Rate. If such Bank shall repay to the Agent such corresponding amount, such
amount so repaid shall constitute such Bank's Loan included in such Borrowing
for purposes of this Agreement.
SECTION 2.03. LETTERS OF CREDIT. (a) ISSUANCE OF LETTERS OF CREDIT.
Subject to the terms and conditions hereof, each Fronting Bank referred to in
clause (ii) of the definition of "FRONTING BANK" in Section 1.01 agrees to issue
letters of credit under this Section 2.03(a), upon any Borrower's request and
for such requesting Borrower's account or the account of any of AES's other
Subsidiaries, from time to time during the Revolving Credit Period. In addition,
and notwithstanding any reference in any Existing Letter of Credit to the
Existing Credit Facility, on and as of the Effective Date, each Existing Letter
of Credit shall be deemed to be a Letter of Credit and to have been issued on
the Effective Date (by the Fronting Bank that issued or was deemed to have
issued such Existing Letter of Credit under the Existing Credit Facility)
pursuant to this Section 2.03(a); PROVIDED, HOWEVER, that nothing in this
Section 2.03(a) shall extend, modify or otherwise affect the existing expiry
date under any such Existing Letter of Credit.
(b) PARTICIPATIONS IN LETTERS OF CREDIT. Upon the issuance (or deemed
issuance) of each Letter of Credit by a Fronting Bank under Section 2.03(a),
such Fronting Bank shall be deemed, without further action by any party hereto,
to have sold to each Bank (other than such Fronting Bank) and each such Bank
shall be deemed, without further action by
any party hereto, to have purchased from such Fronting Bank, a participation in
such Letter of Credit and the related Letter of Credit Liabilities, in the
amount required so that the participations of the Banks (including such Fronting
Bank's retained participation) therein shall be in proportion to their
respective Commitments.
(c) REQUIRED TERMS. Each Letter of Credit (other than the Letter of
Credit identified on Schedule III) issued hereunder shall:
(i) by its terms expire no later than the earlier of (i) five
Domestic Business Days prior to the Termination Date and (2) two years
after its date of issue;
(ii) be in a face amount of (x) not less than $300,000 (or the
equivalent thereof in an Alternative Currency); PROVIDED that up to
five Letters of Credit may be issued with stated amounts less than
$300,000 (or the equivalent thereof in an Alternative Currency) and (y)
not more than the amount that would, after giving effect to the
issuance thereof (and the related purchase and sale of participations
therein pursuant to Section 2.03(b)) cause the Total Outstandings of
any Bank to equal its Commitment; and
(iii) be in a form acceptable to the Fronting Bank.
(d) NOTICE OF ISSUANCE. Except in the case of Existing Letters of
Credit, a Borrower may request that a Letter of Credit be issued by giving the
Agent and the Fronting Bank for such Letter of Credit a notice (a "NOTICE OF
ISSUANCE") at least two Domestic Business Days before such Letter of Credit is
to be issued (or such shorter period of time as shall be acceptable to the Agent
and the relevant Fronting Bank), specifying:
(i) the date of issuance of such Letter of Credit;
(ii) the expiry date of such Letter of Credit (which shall
comply with the requirements of Section 2.03(c)(1));
(iii) the proposed terms of such Letter of Credit (or the
proposed form thereof shall be attached to such Notice of Issuance),
including the face amount thereof (which shall comply with the
requirements of Section 2.03(c)(ii));
(iv) the transaction that is to be supported or financed with
such Letter of Credit, including identification of the Power Project,
if any, to which such
transaction relates and the name of the proposed account party for such
Letter of Credit (which may be a Borrower and any subsidiary of AES)
and,
(v) the identity of the Fronting Bank for such Letter of
Credit, which shall comply with the definition of Fronting Bank.
Upon the receipt of a Notice of Issuance, the Agent shall promptly
notify each Bank of the contents thereof and of the amount of such Bank's
participation in such Letter of Credit and such Notice of Issuance shall not
thereafter be revocable by the Borrower giving such Notice.
(e) DRAWINGS UNDER LETTERS OF CREDIT.
(i) Upon receipt from the beneficiary of any Letter of Credit
of demand for payment under such Letter of Credit, the Fronting Bank
shall determine in accordance with the terms of such Letter of Credit
whether such request for payment should be honored.
(ii) If the Fronting Bank determines that a demand for payment
by the beneficiary of a Letter of Credit should be honored, the
Fronting Bank shall make available to the beneficiary in accordance
with the terms of such Letter of Credit the amount of the Drawing under
such Letter of Credit. The Fronting Bank shall thereupon promptly
notify the relevant Borrower, the Agent and each Bank of the amount of
such Drawing paid by it and the amount of each Bank's participation
therein (which, in the case of any Drawing under an Alternative
Currency Letter of Credit shall be the Dollar Equivalent thereof).
(f) REIMBURSEMENT AND OTHER PAYMENTS BY THE BORROWERS.
(i) If any amount is drawn under any Letter of Credit issued
at the request of or for the account of a Borrower, such Borrower
irrevocably and unconditionally agrees to reimburse the applicable
Fronting Bank in Dollars for all amounts paid by such Fronting Bank
upon such Drawing (which, in the case of any Drawing under an
Alternative Currency Letter of Credit shall be the Dollar Equivalent
thereof), together with any and all reasonable charges and expenses
which any Bank or Fronting Bank may pay or incur relative to such
Drawing and all such amounts due from such Borrower shall bear
interest, payable on the date upon which such amounts shall be due and
payable, on the amount drawn for each
day from and including the date such amount is drawn to but excluding
the date such reimbursement payment is due and payable at a rate per
annum equal to the rate applicable to Base Rate Loans for such day. If
a Fronting Bank makes any payment under a Letter of Credit, the
Borrower shall reimburse such Fronting Bank by paying such amount to
the Agent not later than 12:00 noon, New York City time, on the day
that such payment is made, if the Borrower receives notice of such
payment before 10:00 A.M., New York City time, on such day, or if such
notice has not been received by the Borrower before such time on such
day, then not later than 12:00 noon, New York City time, on (i) the
Business Day that the Borrower receives such notice, if such notice is
received before 10:00 A.M., New York City time, on the day of receipt,
or (ii) the next Business Day, if such notice is not received before
such time on the day of receipt; PROVIDED that, if such payment is at
least $1,000,000, the Borrower may, subject to the conditions to
borrowing set forth herein, request in accordance with Section 2.02,
that such payment be made with the proceeds of a Base Rate Borrowing in
an equivalent amount and, to the extent so financed, the Borrower's
obligation to make such payment shall be discharged and replaced by the
resulting Base Rate Borrowing. Any overdue reimbursement payment, or
overdue interest thereon, shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the sum of the rate
applicable to Base Rate Loans for such day plus 2%.
(ii) Each payment to be made by a Borrower pursuant to this
Section shall be made, in Federal or other funds immediately available,
to the applicable Fronting Bank at its address referred to in Section
10.01.
(iii) The obligations of each Borrower to reimburse the
Fronting Banks under this Section 2.03(f) shall be absolute,
unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, under all circumstances
whatsoever, including without limitation the following circumstances:
(1) any lack of validity or enforceability of any
Financing Document;
(2) any amendment or waiver of or any consent to
departure from any Financing Document (except, in the case of
an effective amendment to, waiver of or consent to a departure
from any provision of this Agreement, to the extent specified
herein);
(3) the existence of any claim, set-off, defense or
other right which
any Borrower may have at any time against the beneficiary of
any Letter of Credit (or any Person or entity for whom such
beneficiary may be acting), the Agent, any Fronting Bank or
any Bank or any other Person or entity, whether in connection
with this Agreement, any other Financing Document or any
unrelated transaction;
(4) any statement or any other document presented
under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect whatsoever;
(5) payment by a Fronting Bank under any Letter of
Credit against presentation of a draft or document which does
not comply with the terms of such Letter of Credit; or
(6) to the extent permitted under applicable law, any
other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
(g) PAYMENTS BY BANKS WITH RESPECT TO LETTERS OF CREDIT.
(i) Each Bank shall make available an amount equal to its
ratable share of any Drawing under a Letter of Credit, in Federal or
other funds immediately available in New York City, to the applicable
Fronting Bank by 3:00 P.M. (New York City time) on the date on which
the relevant Borrower is required to reimburse such Fronting Bank with
respect to such Drawing pursuant to Section 2.03(f)(i), together with
interest on such amount for the period from and including the date of
such Drawing to but excluding the date upon which such amount is to be
made available at the Federal Funds Rate on the date of such drawing,
at such Fronting Bank's address referred to in Section 10.01; PROVIDED
that each Bank's obligation shall be reduced by its pro rata share of
any reimbursement theretofore paid by the relevant Borrower in respect
of such Drawing pursuant to Section 2.03(f)(i). The applicable Fronting
Bank shall notify each Bank of the amount of such Bank's obligation
(which, in the case of any payment under an Alternative Currency Letter
of Credit, shall be the Dollar Equivalent thereof) in respect of any
drawing under a Letter of Credit not later than 1:30 P.M. (New York
City time) on the day such payment by such Bank is due. Each Bank shall
be subrogated to the rights of the applicable Fronting Bank against the
applicable Borrower to the extent such payment due from such Bank to
such Fronting Bank is paid, plus interest thereon, from and including
the day such amount is due from such Bank to such Fronting Bank to but
excluding the day such Borrower makes payment to such Fronting Bank
pursuant to Section 2.03(f)(i), whether before or after judgment, at a
rate per annum equal to the sum of 2% plus the rate applicable to Base
Rate Loans for such day. In the event that, on the date of any Drawing,
(x) Total Outstandings exceeds the Maximum Outstanding Exposure (as
defined in Section 2.16(a) below), (y) the applicable Fronting Bank is
not reimbursed by the Borrowers on such date for the entire amount of
such Drawing, and (z) the Banks, pursuant to the last sentence of
subsection (iv) below, are not obligated to reimburse such Fronting
Bank for the entire amount of such Drawing, the Agent shall, solely for
purposes of determining the portion of such Drawing to be reimbursed by
each Bank, (A) allocate the respective Commitments of the Banks to the
Letter of Credit Liabilities of each Letter of Credit on such date on a
pro rata basis (based upon (1) the proportion of the Commitments to the
aggregate amount of the Letter of Credit Liabilities of all outstanding
Letters of Credit and (2) each Bank's pro rata share of the
Commitments), (B) based on such allocation, determine the reimbursement
obligation of each Bank with respect to such Drawing and (C) promptly
notify each Bank of the amount of its reimbursement obligation with
respect to such Drawing.
(ii) If any Bank fails to pay any amount required pursuant to
subsection (i) of this Section 2.03(g) on the date on which such
payment is due, interest, payable on demand, shall accrue on such
Bank's obligation to make such payment, for each day from and including
the date such payment becomes due to but excluding the date such Bank
makes such payment at a rate per annum equal to the Federal Funds Rate.
Any payment made by any Bank after 3:00 P.M. (New York City time) on
any Domestic Business Day shall be deemed for purposes of the preceding
sentence to have been made on the next succeeding Domestic Business
Day.
(iii) If the relevant Borrower shall reimburse a Fronting Bank
for any drawing under a Letter of Credit after the Banks shall have
made funds available to such Fronting Bank with respect to such drawing
in accordance with subsection (i) of this Section 2.03(g), such
Fronting Bank shall promptly upon receipt of such reimbursement
distribute to each Bank its pro rata share thereof, including interest,
to the extent received by such Fronting Bank.
(iv) The several obligations of the Banks to the Fronting
Banks hereunder
shall be absolute, irrevocable and unconditional under any and all
circumstances whatsoever and shall not be affected by any circumstance,
including, without limitation, (1) any set-off, counterclaim,
recoupment, defense or other right which any such Bank or any other
Person may have against the Agent, any Fronting Bank or any other
Person for any reason whatsoever; (2) the occurrence or continuance of
a Default or an Event of Default or the termination of the Commitments
or any Letter of Credit; (3) any adverse change in the condition
(financial or otherwise) of any Obligor or any other Person; (4) any
breach of any Financing Document by any party thereto; (5) the fact
that any condition precedent to the issuance of, or the making of any
payment under, any Letter of Credit was not in fact met; (6) any
violation or asserted violation of law by any Bank or any affiliate
thereof; or (7) to the extent permitted under applicable law, any other
circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing. Each payment by each Bank to a Fronting Bank for
its own account shall be made without any offset, abatement,
withholding or reduction whatsoever. If a Fronting Bank is required at
any time (whether before or after the Termination Date) to return to a
Borrower or to a trustee, receiver, liquidator, custodian or other
similar official any portion of the payments made by such Borrower to
such Fronting Bank in payment of any Reimbursement Obligation or
interest thereon upon the insolvency of such Borrower, or the
commencement of any case or proceeding under any bankruptcy, insolvency
or other similar law with respect to such Borrower, each Bank shall, on
demand of such Fronting Bank, forthwith return to such Fronting Bank
any amounts transferred to such Bank by such Fronting Bank in respect
thereof pursuant to this subsection PLUS such Bank's pro rata share of
any interest on such payments required to be paid to the Person
recovering such payments PLUS interest on the amount so demanded from
the day such demand is made, if such demand is made by 2:00 p.m. (New
York City time), or from the next following Domestic Business Day, if
such demand is made after 2:00 p.m., to but not including the day such
amounts are returned by such Bank to such Fronting Bank at a rate per
annum for each day equal to (A) the Federal Funds Rate for the day of
such demand and (B) the Base Rate plus 1% for each day thereafter.
Notwithstanding the foregoing or any other provision contained herein,
in no event shall any Bank be obligated to make any payment to a
Fronting Bank to the extent that such payment would cause such Bank's
pro rata share of the Total Outstandings hereunder to exceed such
Bank's Commitment; PROVIDED that the foregoing shall not affect the
obligation of the Borrowers (which is absolute, unconditional and
irrevocable) to reimburse each Fronting Bank for the entire amount of
each payment made by such Fronting Bank under a Letter of Credit,
including any amount thereof that is not paid by any Bank to such
Fronting Bank (pursuant to this sentence or otherwise).
(h) LETTER OF CREDIT COMMISSION; ISSUANCE FEE.
(i) LETTER OF CREDIT COMMISSION. Each Borrower agrees to pay
to the Agent a letter of credit commission with respect to each Letter
of Credit issued at its request or for its account, computed for each
day from and including the date of issuance of such Letter of Credit to
but excluding the last day a drawing is available under such Letter of
Credit (the "LETTER OF CREDIT TERMINATION DATE"), at the Letter of
Credit Commission Rate on the aggregate amount available for drawing
under such Letter of Credit from time to time (whether or not any
conditions to drawing can then be met), such fee to be for the account
of the Banks ratably in proportion to their Total Exposures. Such fee
shall be payable quarterly in arrears on the last Domestic Business Day
of each January, April, July and October and upon the Termination Date.
(ii) ISSUANCE FEE. Each Borrower shall pay to each Fronting
Bank for its own account such fees with respect to each Letter of
Credit issued by such Fronting Bank for the account of such Borrower as
shall have been agreed between such Borrower and such Fronting Bank.
(iii) LIMITED LIABILITY OF THE FRONTING BANK. As between a
Fronting Bank, on the one hand, and a Borrower, on the other, such
Borrower assumes all risks of any acts or omissions of the beneficiary
and any transferee of any Letter of Credit with respect to its use of
such Letter of Credit. Neither Fronting Bank nor any of their
respective employees, officers or directors shall be liable or
responsible for: (a) the use which may be made of any Letter of Credit
or for any acts or omissions of any beneficiary or transferee in
connection therewith, (b) the validity, sufficiency or genuineness of
documents, or of any endorsement(s) thereon, even if such documents
should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged, (c) payment by the Fronting Bank
against presentation of documents which do not comply with the terms of
any Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit, or (d) any
other circumstance whatsoever in making or failing to make payment
under any Letter of Credit; PROVIDED that such Borrower shall have a
claim against the applicable Fronting Bank, and such Fronting Bank
shall be liable to such Borrower, to the extent, but only to the
extent, of any direct, as opposed to consequential or special, damages
suffered by
such Borrower which are found in a final, unappealable judgment of a
court of competent jurisdiction to have been caused by (i) such
Fronting Bank's willful misconduct or gross negligence in determining
whether documents presented under any Letter of Credit comply with the
terms thereof or (ii) such Fronting Bank's willful failure to pay, or
gross negligence resulting in a failure to pay, any drawing after the
presentation to it by the beneficiary (or any transferee of the Letter
of Credit) of a draft and other required documentation strictly
complying with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, a Fronting Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation.
(iv) FRONTING BANKS AND AFFILIATES. Each Fronting Bank shall
have the same rights and powers under the Financing Documents as any
other Bank and may exercise or refrain from exercising the same as
though they were not Fronting Banks (in each case to the extent such
Fronting Bank is also a Bank), and the Fronting Banks and their
respective affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with AES or any Subsidiary or
affiliate of AES as if they were not Fronting Banks hereunder.
SECTION 2.04. NOTES. (a) Each Bank may, by notice to a Borrower and the
Agent, request that its Loans to each Borrower be evidenced by a single Note
payable to the order of such Bank for the account of its Applicable Lending
Office in an amount equal to the aggregate unpaid principal amount of such
Bank's Loans to such Borrower.
(b) Each Bank may, by notice to a Borrower and the Agent, request that
its Loans to such Borrower of a particular type be evidenced by a separate Note
of such Borrower in an amount equal to the aggregate unpaid principal amount of
such Loans. Each such Note shall be in substantially the form of Exhibit A
hereto with appropriate modifications to reflect the fact that it evidences
solely Loans of the relevant type. Each reference in this Agreement to a "Note"
or the "Notes" of such Bank shall be deemed to refer to and include any or all
of such Notes, as the context may require.
(c) Upon receipt of a Bank's Note pursuant to Section 3.01(b) and
3.02(a), the Agent shall forward such Note to such Bank. Each Bank shall record
the date, amount, type and maturity of each Loan made by it to each Borrower and
the date and amount of each payment of principal made with respect thereto, and
may, if such Bank so elects in connection with any transfer or enforcement of
its Note of any Borrower, endorse on the schedule forming a part thereof
appropriate notations to evidence the foregoing information with respect to each
such Loan to such Borrower then outstanding; PROVIDED that the failure of any
Bank to make any such recordation or endorsement shall not affect
the obligations of any Obligor under the Financing Documents. Each Bank is
hereby irrevocably authorized by each Borrower so to endorse its Notes and to
attach to and make a part of any Note a continuation of any such schedule as and
when required.
SECTION 2.05. MATURITY OF LOANS. Each Loan shall mature, and the
principal amount thereof shall be due and payable (together with interest
accrued thereon), on the Termination Date.
SECTION 2.06. INTEREST RATES. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the date
such Loan is made until it becomes due, at a rate per annum equal to the Base
Rate for such day. Such interest shall be payable quarterly in arrears on each
Quarterly Payment Date. Any overdue principal of or interest on any Base Rate
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the sum of 2% plus the rate otherwise applicable to Base Rate
Loans for such day.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for such
day plus the Adjusted London Interbank Offered Rate applicable to such Interest
Period. Such interest shall be payable for each Interest Period on the last day
thereof and, if such Interest Period is longer than three months, at intervals
of three months after the first day thereof.
"EURO-DOLLAR MARGIN" means a rate per annum determined in accordance
with the annexed Pricing Schedule.
The "ADJUSTED LONDON INTERBANK OFFERED RATE" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upward, if
necessary, to the next higher 1/100th of 1%) by dividing (i) the applicable
London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve
Percentage.
The "LONDON INTERBANK OFFERED RATE" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher 1/16th of
1%) of the respective rates per annum at which deposits in dollars are offered
to each of the Reference Banks in the London interbank market at approximately
11:00 A.M. (London time) two Business Days before the first day of such Interest
Period in an amount approximately equal to the principal amount of the
Euro-Dollar Loan of such Reference Bank to which such Interest Period is to
apply and for a period of time comparable to
such Interest Period.
"EURO-DOLLAR RESERVE PERCENTAGE" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.
(c) Any overdue principal of or interest on any Euro-Dollar Loan shall
bear interest, payable on demand, for each day from and including the date
payment thereof was due to but excluding the date of actual payment, at a rate
per annum equal to the higher of (i) the sum of 2% plus the Euro-Dollar Margin
for such day plus the Adjusted London Interbank Offered Rate applicable to such
Loan and (ii) the sum of 2% plus the Euro-Dollar Margin for such day plus the
quotient obtained (rounded upward, if necessary, to the next higher 1/100th of
1%) by dividing (x) the average (rounded upward, if necessary, to the next
higher 1/16th of 1%) of the respective rates per annum at which one day (or, if
such amount due remains unpaid more than three Euro-Dollar Business Days, then
for such other period of time not longer than three months as the Agent may
select) deposits in dollars in an amount approximately equal to such overdue
payment due to each of the Reference Banks are offered to such Reference Bank in
the London interbank market for the applicable period determined as provided
above by (y) 1.00 minus the Euro-Dollar Reserve Percentage (or, if the
circumstances described in clause (a) or (b) of Section 8.01 shall exist, at a
rate per annum equal to the sum of 2% plus the rate applicable to Base Rate
Loans for such day).
(d) The Agent shall determine each interest rate applicable to the
Loans hereunder. The Agent shall give prompt notice to the applicable Borrower
and the participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(e) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference Bank
does not furnish a timely quotation, the Agent shall determine the relevant
interest rate on the basis of the quotation
or quotations furnished by the remaining Reference Bank or Banks or, if none of
such quotations is available on a timely basis, the provisions of Section 8.01
shall apply.
SECTION 2.07. METHOD OF ELECTING INTEREST RATES. (a) The Loans included
in each Borrowing shall bear interest initially at the type of rate specified by
the applicable Borrower in the applicable Notice of Borrowing. Thereafter, the
applicable Borrower may from time to time elect to change or continue the type
of interest rate borne by each Group of Loans (subject to Section 2.07(d) and
the provisions of Article 8), as follows:
(i) if such Loans are Base Rate Loans, the applicable Borrower
may elect to convert such Loans to Euro-Dollar Loans as of any
Euro-Dollar Business Day;
(ii) if such Loans are Euro-Dollar Loans, the applicable
Borrower may elect to convert such Loans to Base Rate Loans as of any
Domestic Business Day or elect to continue such Loans as Euro-Dollar
Loans for an additional Interest Period, subject to Section 2.13 if any
such conversion is effective on any day other than the last day of an
Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a "NOTICE OF
INTEREST RATE ELECTION") to the Agent not later than 11:00 A.M. (New York City
time) on the third Euro-Dollar Business Day before the conversion or
continuation selected in such notice is to be effective (unless the relevant
Loans are to be converted from Euro-Dollar Loans to Base Rate Loans, in which
case such notice shall be delivered to the Agent not later than 11:00 A.M. (New
York City time) on the date such conversion is to be effective). A Notice of
Interest Rate Election may, if it so specifies, apply to only a portion of the
aggregate principal amount of the relevant Group of Loans; PROVIDED that (i)
such portion is allocated ratably among the Loans comprising such Group and (ii)
the portion to which such Notice applies, and the remaining portion to which it
does not apply, are each at least $5,000,000 (unless such portion is comprised
of Base Rate Loans). If no such notice is timely received before the end of an
Interest Period for any Group of Euro-Dollar Loans, the applicable Borrower
shall be deemed to have elected that such Group of Loans be converted to Base
Rate Loans at the end of such Interest Period.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such
notice applies;
(ii) the date on which the conversion or continuation selected
in such
notice is to be effective, which shall comply with the applicable
clause of Section 2.07(a) above;
(iii) if the Loans comprising such Group are to be converted,
the new type of Loans and, if the Loans resulting from such conversion
are to be Euro-Dollar Loans, the duration of the next succeeding
Interest Period applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans
for an additional Interest Period, the duration of such additional
Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election
shall comply with the provisions of the definition of Interest Period.
(c) Promptly after receiving a Notice of Interest Rate Election from a
Borrower pursuant to Section 2.07(a) above, the Agent shall notify each Bank of
the contents thereof and such notice shall not thereafter be revocable by any
Borrower.
(d) A Borrower shall not be entitled to elect to convert any Loans to,
or continue any Loans for an additional Interest Period as, Euro-Dollar Loans if
(i) the aggregate principal amount of any Group of Euro-Dollar Loans created or
continued as a result of such election would be less than $5,000,000 or (ii) a
Default shall have occurred and be continuing when the Borrower delivers notice
of such election to the Agent.
(e) If any Loan is converted to a different type of Loan, the
applicable Borrower shall pay, on the date of such conversion, the interest
accrued to such date on the principal amount being converted.
SECTION 2.08. COMMITMENT FEES. AES shall pay to the Agent, for the
account of the Banks ratably in proportion to their Commitments, a commitment
fee at the Commitment Fee Rate on the daily amount by which the aggregate amount
of the Commitments exceeds the aggregate Total Outstandings. Such commitment fee
shall accrue from and including the Effective Date to but excluding the
Termination Date (or earlier date of termination of the Commitments in their
entirety). Accrued commitment fees under this Section 2.08 shall be payable
quarterly in arrears on each March 31, June 30, September 30 and December 31 and
upon the date of termination of the Commitments in their entirety. For this
purpose, "COMMITMENT FEE RATE" means a rate per annum determined in accordance
with the annexed Pricing Schedule.
SECTION 2.09. TERMINATION OR REDUCTION OF COMMITMENTS.
(a) OPTIONAL. AES may, upon at least three Domestic Business Days'
notice to the Agent, (i) terminate the Commitments in their entirety at any
time, if no Loans or Letters of Credit are outstanding at such time or (ii)
ratably reduce from time to time by an aggregate amount of $5,000,000 or any
larger multiple thereof, the aggregate amount of the Commitments in excess of
the aggregate Total Outstandings.
(b) MANDATORY. (i) SCHEDULED TERMINATION. The Commitments shall
terminate on the Termination Date, and any Loans and Reimbursement Obligations
then outstanding (together with accrued interest thereon) shall be due and
payable on such date.
(ii) NET CASH PROCEEDS OF ASSET DISPOSITIONS. In the event that AES or
any of its Subsidiaries shall at any time, or from time to time, receive any Net
Cash Proceeds of any Asset Disposition, the Commitments of the Banks shall,
unless the Required Banks otherwise agree, be ratably reduced by such amounts
and at such times as may be required to avoid any requirement that all or any
portion of such Net Cash Proceeds be applied to repay, prepay, repurchase or
defease any Debt of AES that is subordinated in right of payment to the Debt of
AES under the Financing Documents.
(c) REDUCTIONS PERMANENT. All reductions of the Commitments pursuant to
this Section 2.09 shall be permanent.
SECTION 2.10. MANDATORY REPAYMENTS OF THE LOANS AND CASH
COLLATERALIZATION OF LETTERS OF CREDIT. If on any date, after giving effect to
the reductions in the Commitments pursuant to Section 2.09, the aggregate Total
Outstandings exceed the aggregate Commitments, the Borrowers shall be jointly
and severally obligated to apply an amount equal to such excess to prepay the
Loans or cash collateralize Letters of Credit, or both. Amounts to be applied
pursuant to the preceding sentence shall be applied first to repay the principal
amount of the Borrowings then outstanding until all such Borrowings shall have
been repaid in full, and if any excess then remains such excess shall be
deposited with the Agent in the Cash Collateral Account to be held, applied or
released for application as provided in Section 2.15 and Section 2.16. The
particular Borrowings to be repaid shall be as designated by AES (or, failing
such designation, as the Agent may determine). Each repayment shall be applied
to repay ratably the Loans of the several Banks included in such Borrowings.
Each payment of principal shall be made together with interest accrued on the
amount repaid to the date of payment.
SECTION 2.11. OPTIONAL PREPAYMENT OF THE LOANS. (a) Subject in the case
of any
Euro-Dollar Borrowing to Section 2.13, the Borrowers may, upon at least one
Domestic Business Day's notice to the Agent, prepay any Group of Base Rate Loans
or upon at least three Euro-Dollar Business Days' notice to the Agent, prepay
any Group of Euro-Dollar Loans, in each case in whole at any time, or from time
to time in part in amounts aggregating $5,000,000 or any larger multiple of
$1,000,000, by paying the principal amount to be prepaid together with accrued
interest thereon to the date of prepayment. Each such optional prepayment shall
be applied to prepay ratably the Loans of the several Banks included in such
Group of Loans.
(b) Upon receipt of a notice of prepayment pursuant to this Section,
the Agent shall promptly notify each Bank of the contents thereof and of such
Bank's ratable share of such prepayment and such notice shall not thereafter be
revocable by any Borrower.
SECTION 2.12. GENERAL PROVISIONS AS TO PAYMENTS. (a) The Borrowers
shall make each payment of principal of, and interest on, the Loans and
Reimbursement Obligations and of fees hereunder, not later than 12:00 Noon (New
York City time) on the date when due, in Federal or other funds immediately
available in New York City, without set-off, counterclaim or other deduction, to
the Agent at its address referred to in Section 10.01. The Agent will promptly
distribute to each Bank its ratable share of each such payment received by the
Agent for the account of the Banks. Whenever any payment of principal of, or
interest on, the Base Rate Loans or Reimbursement Obligations or of fees shall
be due on a day which is not a Domestic Business Day, the date for payment
thereof shall be extended to the next succeeding Domestic Business Day. Whenever
any payment of principal of, or interest on, the Euro-Dollar Loans shall be due
on a day which is not a Euro-Dollar Business Day, the date for payment thereof
shall be extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case the date
for payment thereof shall be the next preceding Euro-Dollar Business Day. If the
date for any payment of principal is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time.
(b) Unless the Agent shall have received notice from a Borrower prior
to the date on which any payment is due from such Borrower to the Banks
hereunder that such Borrower will not make such payment in full, the Agent may
assume that such Borrower has made such payment in full to the Agent on such
date and the Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to the amount then due
such Bank. If and to the extent that such Borrower shall not have so made such
payment, each Bank shall repay to the Agent forthwith on demand
such amount distributed to such Bank together with interest thereon, for each
day from the date such amount is distributed to such Bank until the date such
Bank repays such amount to the Agent, at the Federal Funds Rate.
SECTION 2.13. FUNDING LOSSES. If a Borrower makes any payment of
principal with respect to any Euro-Dollar Loan or any Euro-Dollar Loan is
converted to a Base Rate Loan (pursuant to Article 2, 6 or 8 or otherwise) on
any day other than the last day of an Interest Period applicable thereto, or the
last day of an applicable period fixed pursuant to Section 2.06(c), or if a
Borrower fails to borrow, prepay, convert or continue any Euro-Dollar Loans
after notice has been given to any Bank in accordance with Section 2.02(b),
2.07(c) or 2.11(b), such Borrower shall reimburse each Bank within 15 days after
demand for any resulting loss or expense incurred by it (or by an existing or
prospective Participant in the related Loan), including (without limitation) any
loss incurred in obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after such payment or
conversion or failure to borrow, prepay, convert or continue; PROVIDED that such
Bank shall have delivered to such Borrower a certificate as to the amount of
such loss or expense, which certificate shall be conclusive in the absence of
manifest error.
SECTION 2.14. COMPUTATION OF INTEREST AND FEES. Interest based on the
Base Rate hereunder shall be computed on the basis of a year of 365 days (or 366
days in a leap year) and paid for the actual number of days elapsed (including
the first day but excluding the last day). All other interest and fees shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed (including the first day but excluding the last day).
SECTION 2.15. CASH COLLATERAL ACCOUNT. (a) All amounts required to be
deposited as cash collateral with the Agent pursuant to Section 2.10, 2.16 or
Section 6.03 shall be deposited in a cash collateral account (the "CASH
COLLATERAL ACCOUNT") established by the Borrowers with the Agent, to be held,
applied or released for application as provided in this Section 2.15 and Section
2.16.
(b) If and when any portion of the Letter of Credit Liabilities on
which any deposit of cash collateral was based (the "RELEVANT CONTINGENT
EXPOSURE") shall become fixed (a "DIRECT EXPOSURE") as a result of the payment
by a Fronting Bank of a draft presented under any relevant Letter of Credit
(including any such payment under an Alternative Currency Letter of Credit for
which the relevant Fronting Bank, as a result of fluctuations in currency
exchange rates, is not reimbursed in full by the Banks), the amount of such
Direct Exposure (but not more than the amount in the Cash Collateral
Account at the time) shall be withdrawn by the Agent from the Cash Collateral
Account and shall be paid to the relevant Fronting Bank to be applied against
such Direct Exposure and the Relevant Contingent Exposure shall thereupon be
reduced by such amount.
(c) Interest and other payments and distributions made on or with
respect to the cash collateral held by the Agent shall be for the account of the
Borrowers and shall constitute cash collateral to be held by the Agent or
returned to the Borrowers in accordance with subsection (b) of this Section
2.15; PROVIDED that the Agent shall have no obligation to invest any cash
collateral on behalf of the Borrowers or any other Person. Beyond the exercise
of reasonable care in the custody thereof, the Agent shall have no duty as to
any cash collateral in its possession or control or in the possession or control
of any agent or bailee or any income thereon or as to the preservation of rights
against prior parties or any other rights pertaining thereto. The Agent shall be
deemed to have exercised reasonable care in the custody and preservation of the
cash collateral in its possession if the cash collateral is accorded treatment
substantially equal to that which it accords its own property, and shall not be
liable or responsible for any loss or damage to any of the cash collateral, or
for any diminution in the value thereof, by reason of the act or omission of any
agent or bailee selected by the Agent in good faith. All expenses and
liabilities incurred by the Agent in connection with taking, holding and
disposing of any cash collateral (including customary custody and similar fees
with respect to any cash collateral held directly by the Agent) shall be paid by
AES from time to time upon demand. Upon a Default, the Agent shall be entitled
to apply (and, at the request of the Required Banks but subject to applicable
law, shall apply) cash collateral or the proceeds thereof to payment of any such
expenses, liabilities and fees.
SECTION 2.16. COMPUTATIONS OF OUTSTANDINGS; DETERMINATION OF AVAILABLE
AMOUNT OF ALTERNATIVE CURRENCY LETTERS OF CREDIT. (a) Whenever reference is made
in this Agreement to the Total Outstandings on any date under this Agreement,
such reference shall refer to Total Outstandings on such date after giving
effect to all Extensions of Credit to be made on such date. For purposes of
calculating the Total Outstandings on any date of determination, the aggregate
Available Amount in respect of all Alternative Currency Letters of Credit shall
be deemed to equal the amount thereof most recently reported to the Agent
pursuant to subsection (b) below. At no time shall the Total Outstandings under
this Agreement exceed the sum of (i) the aggregate amount of the Commitments,
PLUS (ii) the Cash Collateral Account (such sum being referred to herein as the
"MAXIMUM OUTSTANDING EXPOSURE"). References to the unused portion of the
Commitments shall refer to the excess, if any, of the Commitments over the Total
Outstandings; and references to the unused portion of any Bank's Commitment
shall refer
to such Bank's pro rata share of the unused Commitments.
(b) Each Fronting Bank that issues an Alternative Currency Letter of
Credit shall (i) on the first Domestic Business Day of each calendar month,
deliver to the Agent a schedule listing (A) each outstanding Alternative
Currency Letter of Credit issued by such Fronting Bank, (B) the maximum
aggregate amount available to be drawn under each such Alternative Currency
Letter of Credit at any time on or after such date (denominated in the
applicable Alternative Currency, assuming the compliance with and satisfaction
of all conditions for Drawing enumerated therein) and (C) the equivalent in
Dollars of such amount (as determined by such Fronting Bank on the basis of
exchange rates available to or otherwise used by such Fronting Bank), together
with the applicable exchange rate utilized by such Fronting Bank and the source
thereof (it being agreed and understood that such applicable exchange rate may
be adjusted by a reasonable and customary volatility factor as agreed by AES and
such Fronting Bank), (ii) on the date of issuance of any Alternative Currency
Letter of Credit (including, if any Alternative Currency Letters of Credit are
issued or deemed issued on the Closing Date, on the Closing Date), deliver to
the Agent a schedule listing the information described in clauses (B) and (C)
above, (iii) on the date of any increase or decrease in the Available Amount of
any Alternative Currency Letter of Credit (other than any increase or decrease
attributable solely to currency exchange rate fluctuations), deliver to the
Agent a schedule listing the information described in clauses (B) and (C) above
after giving effect to such increase or decrease (as the case may be), and (iv)
not later than one Domestic Business Day after its receipt of a written request
therefor from the Agent or any Bank, deliver to the Agent a schedule listing the
information described in clauses (A), (B) and (C) above. The Agent shall
promptly after its receipt thereof deliver a copy of each such schedule to the
Borrowers and the Banks. For all purposes under this Agreement, unless otherwise
expressly set forth herein, the Available Amount in respect of each Alternative
Currency Letter of Credit shall be deemed to equal, on any date of
determination, the Dollar Equivalent thereof as most recently reported to the
Agent by the relevant Fronting Bank pursuant to this subsection (b).
(c) If, on (i) the date that any schedule is delivered by a Fronting
Bank to the Agent pursuant to subsection (b) above, (ii) any date, after giving
effect to reduction in the Commitments, or (iii) any other date, Total
Outstandings on such date (calculated pursuant to subsection (a) and (b) above)
exceeds the Maximum Outstanding Exposure, then within two Domestic Business Days
thereafter the Borrower shall be obligated to deposit cash collateral with the
Agent in the Cash Collateral Account in an amount equal
to such excess to be held, applied or released for application as provided in
Section 2.15.
(d) If at any time the Maximum Outstanding Exposure exceeds the Total
Outstandings hereunder, the Borrower may provide a written notice to the Agent
requesting the Agent to withdraw such excess amount from the Cash Collateral
Account and pay such amount to the Borrower, and, provided that no Default shall
have occurred and be continuing, the Agent shall promptly undertake such actions
in accordance with the instructions of the Borrower. If a Default shall have
occurred and be continuing, the Agent shall not take any of the foregoing
actions and, if and when requested by the Required Banks, the amounts held in
the Cash Collateral Account shall be withdrawn by the Agent, and the proceeds
thereof shall be applied by the Agent FIRST to repay the Total Outstandings and
other due and unpaid amounts required to be paid by the Borrower hereunder and
SECOND, so long as no Loans or Letters of Credit are then outstanding, any
remaining amounts shall be paid to the Borrower.
SECTION 2.17. ALTERNATIVE CURRENCY LETTER OF CREDIT ISSUANCES. It is
understood that, if Letters of Credit are issued in an Alternative Currency, a
circumstance may arise where the United States dollars ("dollars") needed to
reimburse a Fronting Bank may exceed the unused Commitments of the Banks and the
amounts on deposit in the Cash Collateral Account available for that purpose.
This situation could occur if an Alternative Currency exchange rate between the
currency of a Letter of Credit issuance and dollars changes between the date of
issuance of, and the date of funding a Drawing on, an Alternative Currency
Letter of Credit (or funding a deposit to the Cash Collateral Account to cover
issuances in excess of Commitments) so that more dollars are needed to purchase
the Alternative Currency on the date of funding of the Drawing on an Alternative
Currency Letter of Credit (or funding a deposit to the Cash Collateral Account)
than would have been needed to fund a Drawing made on the issuance date of such
Letter of Credit (I.E., the currency of issuance has appreciated against the
dollar between the date of issuance and the date of funding or cash collateral
deposit). In such a circumstance, the Fronting Banks agree as follows: (i) Any
shortfall of Commitments to purchase participations in Letter of Credit Drawings
shall be allocated PRO RATA among the Fronting Banks who have issued Alternative
Currency Letters of Credit for which the currency of issuance has appreciated
against the dollar ("ADVERSE ALTERNATIVE CURRENCY LETTERS OF CREDIT"). The
PRO RATA allocation shall be based on the Dollar Equivalent of the face amount
of each Adverse Alternative Currency Letter of Credit, measured at the issuance
date of each such Adverse Alternative Currency Letter of Credit. Commitments
shall not be used to purchase participations in Adverse Alternative Currency
Letters of Credit to the extent that use of those Commitments covers any
increase in the Dollar Equivalent of an Adverse Alternative Letter of Credit
since the date of issuance of the Letter of Credit if following such purchase
remaining unused Commitments are
insufficient to purchase participations in the remaining outstanding Letters of
Credit. (ii) Amounts deposited in the Cash Collateral Account shall be allocated
FIRST to cover shortfalls to the extent existing on the last date of actual
deposit to the Cash Collateral Account, or if later, the most recent date of
determination pursuant to Section 2.16(b), and SECOND to any additional
shortfalls (allocated PRO RATA among such shortfalls); PROVIDED, funds on
deposit in the Cash Collateral Account, if any, may not be applied to fund a
Drawing on an Adverse Alternative Currency Letter of Credit to the extent those
funds have been allocated to cover an exposure existing on the last date of
deposit to the Cash Collateral Account if following the application a previously
covered exposure is left without cash collateral.
ARTICLE 3
CONDITIONS
SECTION 3.01. CLOSING. The closing hereunder shall occur when all the
following conditions have been satisfied:
(a) The Agent shall have received the fees for the account of each Bank
in the amounts previously agreed to by AES and as set forth in the letter
agreement (the "ENGAGEMENT LETTER") between AES, Citibank, N.A. and Xxxxxxx
Xxxxx Xxxxxx, Inc. dated March 30, 2000;
(b) The Agent shall have received, if requested, duly executed Notes of
AES for the account of each Bank that has so requested, dated on or before the
Closing Date complying with the provisions of Section 2.04;
(c) The Agent shall have received the Subsidiary Guaranty dated the
Closing Date, duly executed by AES Oklahoma, AES Hawaii Management, AES
Southland and AES Warrior Run;
(d) The Agent shall have received an opinion of the General Counsel of
AES, substantially in the form of Exhibit C-1 hereto and an opinion of Xxxxx
Xxxx & Xxxxxxxx, substantially in the form of Exhibit C-2 hereto, each dated the
Closing Date and covering such additional matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request;
(e) The Agent shall have received an opinion of Cravath, Swaine &
Xxxxx, special counsel for the Agent, substantially in the form of Exhibit D
hereto, dated the Closing Date and covering such additional matters relating to
the transactions contemplated hereby as the Required Banks may reasonably
request;
(f) The Agent shall have received evidence satisfactory to it that (i)
all amounts outstanding under the Existing Credit Facility and the Existing LOC
Facility have been paid in full, (ii) all commitments thereunder have been
terminated and (iii) all principal, interest, fees, reimbursement obligations
and other amounts owing thereunder shall have been paid in full;
(g) The Agent shall have received evidence, satisfactory to it, in the
form of pro forma calculations, that the making of Borrowings and the issuance
of, and drawings under, Letters of Credit under this Agreement are permitted
under the terms of the Debt of AES outstanding on the Closing Date;
(h) The Agent shall have received copies of the resolutions of the
Board of Directors (or, in the case of any limited liability companies, Board of
Representatives or the equivalent) of each Obligor authorizing the execution,
delivery and performance by such Obligor of the Financing Documents to which it
is a party, certified by a duly authorized officer of such Obligor (which
certificate shall state that such resolutions are in full force and effect on
the Closing Date);
(i) The Agent shall have received certified copies of all approvals,
authorizations or consents of, or notices to or registrations with, any
governmental body or agency required for each Obligor, if necessary, to enter
into the Financing Documents to which it is a party;
(j) The Agent shall have received a certificate of a duly authorized
officer of each Obligor certifying the names and true signatures of the officers
of such Obligor authorized to sign the Financing Documents to which it is a
party and the other documents to be delivered by such Obligor hereunder;
(k) The Agent shall have received payment of all reasonable fees and
other amounts then payable (including, without limitation, all fees and expenses
of counsel to the Agent payable pursuant to Section 10.03);
(l) The Agent shall have received a certificate signed by a duly
authorized officer of AES dated the Closing Date, to the effect that: (i) the
representations and warranties contained in Article 4 hereof are true and
correct on and as of the Closing Date as though
made on and as of such date; and (ii) no Default has occurred and is continuing
or would result from the issuance of the Letters of Credit requested by AES to
be issued on such date (including, without limitation, the deemed issuance of
the initial Letters of Credit pursuant to the second sentence of Section
2.03(a)) and the Borrowings requested by AES to be made on such date; and
(m) The Agent shall have received all documents it may reasonably
request relating to the existence of the Obligors, the corporate or other
organizational authority for and the validity of this Agreement and the other
Financing Documents, and any other matters relevant hereto, all in form and
substance satisfactory to the Agent.
The Agent shall promptly notify the Borrowers and the Banks of the
Closing Date, and such notice shall be conclusive and binding on all parties
hereto.
SECTION 3.02. AES FINANCE SUBSIDIARY ADDITION DATE. An AES Finance
Subsidiary Addition Date shall occur with respect to any AES Finance Subsidiary
on the date upon which the Agent shall have received:
(a) if requested, duly executed Notes of such AES Finance Subsidiary
for the account of each Bank that has so requested, dated on or before such AES
Finance Subsidiary Addition Date complying with the provisions of Section 2.04;
(b) a counterpart hereof signed by such AES Finance Subsidiary;
(c) an opinion of the General Counsel of AES substantially in the form
of Exhibit E hereto with respect to such AES Finance Subsidiary and covering
such additional matters relating to the transactions contemplated hereby as the
Required Banks may reasonably request;
(d) an opinion of counsel to such AES Finance Subsidiary from the
jurisdiction of incorporation of such AES Finance Subsidiary, substantially in
the form of Exhibit F hereto and covering such additional matters relating to
the transactions contemplated hereby as the Required Banks may reasonably
request; and
(e) all documents that the Agent may reasonably request relating to the
existence of such AES Finance Subsidiary, the corporate authority for and the
validity of this Agreement and its Notes as agreements and obligations of such
AES Finance Subsidiary,
and any other matters relevant hereto, all in form and substance reasonably
satisfactory to the Agent.
The Agent shall promptly notify the Borrowers and the Banks of any AES
Finance Subsidiary Addition Date, and such notice shall be conclusive and
binding on all parties hereto.
SECTION 3.03. EXTENSION OF CREDIT. The obligation of each Bank to make
a Loan on the occasion of each Borrowing and the obligation of a Fronting Bank
to issue a Letter of Credit (including the deemed issuance of the initial
Letters of Credit pursuant to the second sentence of Section 2.03(a)) on the
occasion of each request therefor by a Borrower shall in each case be subject to
the satisfaction of the following conditions:
(a) the fact that the Closing Date shall have occurred on or prior
March 31, 2000;
(b) receipt by the Agent of a Notice of Borrowing or (except in the
case of the deemed issuance of the initial Letters of Credit pursuant to the
second sentence of Section 2.03(a)) a Notice of Issuance as required by Section
2.02 or 2.03, as the case may be;
(c) the fact that, immediately after such Extension of Credit, after
giving effect to all direct and indirect applications of the proceeds of such
Extension of Credit made substantially simultaneously with the extension
thereof, the aggregate Total Outstandings of any Bank will not exceed its
Commitment;
(d) the fact that, immediately before and after such Extension of
Credit, no Default shall have occurred and be continuing; and
(e) the fact that the representations and warranties of the Obligors
contained in the Financing Documents (except, in the case of a Refunding
Borrowing, the representations and warranties set forth in Sections 4.05(c) and
4.06 as to any matter which has theretofore been disclosed in writing by AES to
the Banks) shall be true on and as of the date of such Extension of Credit.
Each Extension of Credit hereunder shall be deemed to be a
representation and warranty by the Borrowers on the date of such Extension of
Credit as to the facts specified in clauses (c), (d) and (e) of this Section.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
AES represents and warrants that:
SECTION 4.01. CORPORATE EXISTENCE AND POWER. Each Obligor is a
corporation (or limited liability company, as applicable) duly incorporated (or
formed, as applicable), validly existing and in good standing under the laws of
the State of Delaware (or, in the case of any AES Finance Subsidiary, its
jurisdiction of incorporation), and has all corporate or other organizational
powers and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
SECTION 4.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO
CONTRAVENTION. The execution, delivery and performance by each Obligor of the
Financing Documents to which it is a party are within such Obligor's corporate
or other organizational powers, have been duly authorized by all necessary
corporate or other organizational action, require no action by or in respect of,
or filing with, any governmental body, agency or official and do not contravene,
or constitute a default under, any provision of applicable law or regulation or
of the certificate of incorporation (or certificate of formation, as applicable)
or by-laws (or other organizational documents, as applicable) of such Obligor or
of any agreement, judgment, injunction, order, decree or other instrument
binding upon AES or any of its Subsidiaries or result in the creation or
imposition of any Lien on any asset of AES or of any Material AES Entity.
SECTION 4.03. COMPLIANCE WITH LAWS. AES and each of its Subsidiaries
are in compliance, in all material respects, with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws and ERISA and the rules and
regulations thereunder).
SECTION 4.04. BINDING EFFECT. This Agreement constitutes a valid and
binding agreement of each Borrower and each other Financing Document, when
executed and delivered in accordance with this Agreement, will constitute a
valid and binding obligation of each Obligor that is a party thereto, in each
case enforceable in accordance with its terms.
SECTION 4.05. FINANCIAL INFORMATION.
(a) The consolidated balance sheet of AES and its Consolidated
Subsidiaries as of December 31, 1999 and the related consolidated statements of
operations and cash flows for the fiscal year then ended, reported on by
Deloitte & Touche and set forth in the AES 1999 Form 10-K, a copy of which has
been delivered to each of the Banks, fairly present, in conformity with
generally accepted accounting principles, the consolidated financial position of
AES and its Consolidated Subsidiaries as of such date and their consolidated
results of operations and cash flows for such fiscal year.
(b) Since December 31, 1999 there has been no material adverse change
in the business, financial position, results of operations or prospects of AES
and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.06. LITIGATION. Except as disclosed in the AES 1999 Form
10-K, there is no action, suit or proceeding pending against, or to the
knowledge of AES threatened against or affecting, AES or any of its Subsidiaries
before any court or arbitrator or any governmental body, agency or official in
which there is a reasonable possibility of an adverse decision which could
materially adversely affect the business, consolidated financial position or
consolidated results of operations of AES and its Consolidated Subsidiaries or
which in any manner draws into question the validity of any Financing Document.
SECTION 4.07. COMPLIANCE WITH ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the currently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the posting of
a bond or other security under ERISA or the Internal Revenue Code or (iii)
incurred any liability in excess of $100,000 under Title IV of ERISA other than
a liability to the PBGC for premiums under Section 4007 of ERISA.
SECTION 4.08. ENVIRONMENTAL MATTERS.
(a) In the ordinary course of its business, each of AES and its
Subsidiaries conducts an ongoing review of the effect of Environmental Laws on
the business, operations and properties of AES or such Subsidiary, in the course
of which it identifies and evaluates associated liabilities and costs
(including, without limitation, any capital or
operating expenditures required for clean-up or closure of properties presently
or previously owned, any capital or operating expenditures required for
investigation, to achieve or maintain compliance with environmental protection
standards imposed by Environmental Laws or as a condition of any license, permit
or contract, any related constraints on operating activities, including any
periodic or permanent shutdown of any facility or reduction in the level of or
change in the nature of operations conducted thereat, any costs or liabilities
in connection with off-site disposal of wastes or Hazardous Substances by AES or
its Subsidiaries, and any actual or potential liabilities to third parties,
including employees, and any related costs and expenses). On the basis of this
review, AES has reasonably concluded that such associated liabilities and costs,
including the costs of compliance with Environmental Laws, are unlikely to have
a material adverse effect on the business, financial condition, results of
operations or prospects of AES and its Consolidated Subsidiaries, considered as
a whole.
(b) There are no facts, circumstances or conditions that are reasonably
likely to result in liabilities arising under Environmental Laws that could have
a material adverse effect on the business, financial conditions, results of
operations or prospects of AES and its Consolidated Subsidiaries, considered as
a whole.
SECTION 4.09. TAXES. United States Federal income tax returns of AES
and its Subsidiaries have been examined and closed through the fiscal year ended
December 31, 1986. AES and its Subsidiaries have filed all United States Federal
income tax returns and AES and all Material AES Entities have filed all other
material tax returns which are required to be filed by them and have paid all
taxes due as indicated on such returns or pursuant to any assessment received by
AES or any Subsidiary or any Material AES Entity other than any such taxes that
are being diligently contested in good faith through appropriate proceedings and
for which adequate reserves have been established in accordance with generally
accepted accounting principals. The charges, accruals and reserves on the books
of AES, its Subsidiaries and all Material AES Entities in respect of taxes or
other governmental charges are, in the opinion of AES, adequate.
SECTION 4.10. MATERIAL AES ENTITIES. Each Material AES Entity is a
corporation (or limited liability company, as applicable) duly incorporated (or
formed, as applicable), validly existing and (other than any Material AES Entity
that is not incorporated under the laws of the United States or any political
subdivision thereof) in good standing under the laws of its jurisdiction of
incorporation (or jurisdiction of formation, as applicable). Each Material AES
Entity has all corporate or other organizational powers and all
material governmental licenses, authorization, consents and approvals required
to carry on its business as proposed to be conducted and has all governmental
licenses, authorizations, consents and approvals required to have been obtained
prior to the date hereof and which are material to the operation of its business
as proposed to be conducted, except to the extent that the failure to obtain any
such license, authorization, consent or approval, individually or in the
aggregate, could not reasonably be expected to have a material adverse effect
upon the business, financial condition, operations, property and prospects of
AES and its Consolidated Subsidiaries, taken as a whole.
SECTION 4.11. NOT AN INVESTMENT COMPANY. None of the Obligors is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.12. PUBLIC UTILITY HOLDING COMPANY ACT. Neither AES nor any
of its Subsidiaries is subject to regulation as a "holding company" or a
"subsidiary company" of a holding company or an "affiliate" of a subsidiary or
holding company or a "public utility company" under Section 2(a) of the Public
Utility Holding Company Act of 1935, as amended ("PUHCA"), except that AES and
certain of its subsidiaries are exempt holding companies under Section 3(a)(5)
of PUHCA by order of the Securities and Exchange Commission.
SECTION 4.13. REPRESENTATIONS IN SUBSIDIARY GUARANTY TRUE AND CORRECT.
Unless the Subsidiary Guaranty shall have ceased to be a Financing Document,
each of the representations and warranties of any Obligor contained in the
Subsidiary Guaranty is true and correct.
SECTION 4.14. FULL DISCLOSURE. All information heretofore furnished by
any Borrower to the Agent or any Bank for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all such information
hereafter furnished by any Borrower to the Agent or any Bank will be, true and
accurate in all material respects on the date as of which such information is
stated or certified. AES has disclosed to the Banks in writing any and all facts
which materially and adversely affect or may affect (to the extent any Borrower
can now reasonably foresee), the business, operations or financial condition of
AES and its Consolidated Subsidiaries, taken as a whole, or the ability of any
Obligor to perform its obligations under the Financing Documents.
SECTION 4.15. EXISTING LETTERS OF CREDIT. Schedule II hereto identifies
each Existing Letter of Credit outstanding as of the date hereof and as of the
Effective Date.
ARTICLE 5
COVENANTS
AES agrees that, so long as any Bank has any Commitment hereunder or
any amount payable under any Note remains unpaid or any Letter of Credit or
Reimbursement Obligation remains outstanding:
SECTION 5.01. INFORMATION. AES will deliver to each of the Banks:
(a) as soon as available and in any event within 120 days after the end
of each fiscal year of AES, a consolidated and consolidating balance sheet of
each Obligor as of the end of such fiscal year, an unconsolidated balance sheet
of AES as of the end of such fiscal year, the related consolidated,
consolidating and unconsolidated (as applicable) statements of operations for
such fiscal year, the related consolidated and unconsolidated statements of cash
flows for such fiscal year and a statement of the cash flow to AES of each
Subsidiary of AES for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, said consolidated
financial statements to be reported on, in a manner acceptable to the Securities
and Exchange Commission, by Deloitte & Touche or other independent public
accountants of nationally recognized standing and such consolidating and
unconsolidated financial statements to be certified as to fairness of
presentation, generally accepted accounting principles (other than failure to
consolidate) and consistency by the chief executive officer, president, chief
financial officer or chief accounting officer of AES;
(b) as soon as available and in any event within 60 days after the end
of each of the first three quarters of each fiscal year of AES, a consolidated
balance sheet of each Obligor as of the end of such quarter and an
unconsolidated balance sheet of AES as of the end of such fiscal quarter and the
related consolidated and unconsolidated statements of operations for such
quarter and for the portion of such Obligor's fiscal year ended at the end of
such quarter and the related consolidated and unconsolidated statements of cash
flows for the portion of such Obligor's fiscal year ended at the end of such
quarter, and a statement of the cash flow to AES of each Subsidiary of AES for
such quarter and for the portion of AES's fiscal year ended at the end of such
quarter, setting forth in the case of such consolidated statements of operations
and cash flows, in comparative form the figures for the corresponding quarter
and the corresponding portion of such Obligor's previous fiscal year, all
certified (subject to normal year-end adjustments) as to fairness of
presentation, generally accepted accounting principles and consistency by the
chief executive officer, president, chief financial officer or chief accounting
officer of AES;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the chief
executive officer, president, chief financial officer or chief accounting
officer of AES (i) setting forth in reasonable detail the calculations required
to establish whether AES was in compliance with the requirements of Sections
5.07, 5.08, 5.09, 5.11, 5.13, 5.14 and 5.16 on the date of such financial
statements, (ii) stating to the knowledge of AES whether any Default exists on
the date of such certificate and, if any Default then exists, setting forth the
details thereof and the action which AES is taking or proposes to take with
respect thereto and (iii) accompanied by a schedule setting forth in reasonable
detail a description, including, where applicable, the expected and maximum
dollar amounts thereof, of all material contingent liabilities not disclosed in
such financial statements;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i) whether
anything has come to their attention as a result of their audit (which was not
directed primarily toward obtaining knowledge of noncompliance) to cause them to
believe that AES has failed to comply with the terms, covenants, provisions or
conditions as they relate to accounting of financial matters addressed in
Sections 5.07 to 5.15, inclusive, and (ii) confirming the calculations set forth
in the officer's certificate delivered simultaneously therewith pursuant to
clause (c) above;
(e) within five days after any officer of AES obtains knowledge of any
Default, if such Default is then continuing, a certificate of the chief
executive officer, president, executive vice-president or chief financial
officer of AES setting forth the details thereof and the action which AES is
taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of AES
generally, copies of all financial statements, reports and proxy statements so
mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) which AES shall have filed with the Securities and Exchange
Commission;
(h) if and when any member of the ERISA Group (i) gives or is required
to give
notice to the PBGC of any "reportable event" (as defined in Section 4043 of
ERISA) with respect to any Plan which might constitute grounds for a termination
of such Plan under Title IV of ERISA, or knows that the plan administrator of
any Plan has given or is required to give notice of any such reportable event, a
copy of the notice of such reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial withdrawal liability under
Title IV of ERISA or notice that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, a copy of such notice; (iii) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or appoint a trustee to administer any Plan, a copy of such notice; (iv) applies
for a waiver of the minimum funding standard under Section 412 of the Internal
Revenue Code, a copy of such application; (v) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (vi) gives notice of withdrawal from any
Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to
make any payment or contribution to any Plan or Multiemployer Plan or in respect
of any Benefit Arrangement or makes any amendment to any Plan or Benefit
Arrangement which has resulted or could result in the imposition of a Lien or
the posting of a bond or other security, a certificate of the chief executive
officer, president, chief financial officer or chief accounting officer of AES
setting forth details as to such occurrence and the action, if any, which AES or
the applicable member of the ERISA Group is required or proposes to take;
(i) not less than 10 days prior to the anticipated receipt by AES or
any Subsidiary of AES of Net Cash Proceeds from any Asset Disposition, a
certificate of the chief executive officer, president, chief financial officer
or chief accounting officer of AES setting forth a description of the
transaction giving rise to such Net Cash Proceeds, the date or dates upon which
such Net Cash Proceeds are anticipated to be received by AES or such Subsidiary
and the amount of Net Cash Proceeds anticipated to be received on such date or
each of such dates;
(j) promptly after receipt by AES or any Subsidiary of AES or any
Material AES Entity, a copy of each complaint, order, citation, notice or other
written communication from any Person with respect to the existence or alleged
existence of a material violation of any applicable Environmental Law or the
incurrence of any liability, obligation, loss, damage, cost, expense, fine,
penalty or sanction or the requirement to commence any remedial action resulting
from or in connection with any air emission, water discharge, noise emission,
Hazardous Substance or any other environmental, health or safety matter at,
upon, under or within any of the properties now or previously owned, leased or
operated by AES, any of its Subsidiaries or any Material AES Entity, or due to
the operations or activities of AES, any Subsidiary of AES, any Material AES
Entity or any
other Person on or in connection with any such property or any part thereof, and
(k) from time to time such additional information regarding the
financial position or business of AES and its Subsidiaries as the Agent, at the
request of any Bank, may reasonably request.
SECTION 5.02. PAYMENT OF OBLIGATIONS. Each Borrower will pay and
discharge all its material obligations and liabilities, including, without
limitation, tax liabilities, except where the same may be contested in good
faith by appropriate proceedings, and will maintain, and will cause each
Subsidiary of AES to maintain, in accordance with generally accepted accounting
principles, appropriate reserves for the accrual of any of the same.
SECTION 5.03. MAINTENANCE OF PROPERTY; INSURANCE. (a) AES will keep,
and will cause each Subsidiary of AES to keep, all property useful and necessary
in its business in good working order and condition, ordinary wear and tear
excepted.
(b) AES will, and will cause each of its Subsidiaries to, maintain
(either in the name of AES or in such Subsidiary's own name) with financially
sound and responsible insurance companies, insurance of such types, in at least
such amounts and against at least such risks (and with such risk retention) as
are usually insured against in similar circumstances in the same general area by
companies of established repute engaged in the same or a similar business; and
will furnish to each Bank upon request information presented in reasonable
detail as to the insurance so carried.
SECTION 5.04. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. AES (a)
will continue, and will cause each Material AES Entity and each other Borrower,
if any, to continue, to engage in business of the same general type as now
conducted by AES and its Subsidiaries, (b) will continue, and will cause each
Material AES Entity and each other Borrower, if any, to continue, to operate
their respective businesses on a basis substantially consistent with the
policies and standards of AES, such Material AES Entity or such Borrower, if
any, as in effect on the date hereof and (c) will preserve, renew and keep in
full force and effect, and will cause each Material AES Entity and each other
Borrower, if any, to preserve, renew and keep in full force and effect their
respective corporate existence and their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business; PROVIDED
that nothing in this Section 5.04 shall prohibit (i) the merger of a Subsidiary
into AES or the merger or consolidation of a Subsidiary (other than a Borrower)
with or into another Person if the corporation
surviving such consolidation or merger is a Subsidiary and if, in each case,
after giving effect thereto, (x) no Default shall have occurred and be
continuing and (y) no Borrower or Subsidiary Guarantor shall be liable for any
Debt of such Subsidiary except to the extent that it was liable for such Debt
prior to giving effect to such merger or (ii) the termination of the corporate
existence of any Subsidiary (other than a Borrower or a Subsidiary Guarantor) if
AES in good faith determines that such termination is in the best interest of
AES and is not materially disadvantageous to the Banks.
SECTION 5.05. COMPLIANCE WITH LAWS. AES will comply, and cause each
Subsidiary of AES to comply, in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws and ERISA and the rules and
regulations thereunder) (a) except for such non-compliance as would result
solely in the payment of monetary compensation by AES or such Subsidiary in an
amount not to exceed $200,000 for each such non-compliance and (b) except where
the necessity of compliance therewith is contested in good faith by appropriate
proceedings (and the pendency of such proceedings themselves shall not have a
material adverse effect on AES and its Subsidiaries, taken as a whole).
SECTION 5.06. INSPECTION OF PROPERTY, BOOKS AND RECORDS. AES will keep,
and will cause each Subsidiary of AES to keep, proper books of record and
account in which full, true and correct entries shall be made of all dealings
and transactions in relation to its business and activities; and will permit,
and will cause each Significant AES Entity and each other Borrower, if any, to
permit, representatives of any Bank at such Bank's expense to visit and inspect
any of their respective properties, to examine and make abstracts from any of
their respective books and records and to discuss their respective affairs,
finances and accounts with their respective officers, employees and independent
public accountants, all at such reasonable times and as often as may reasonably
be desired.
SECTION 5.07. LIMITATION ON SUBSIDIARY DEBT. AES shall not permit any
Subsidiary of AES to, incur, assume, create or suffer to exist any Debt, except
for:
(a) Guarantees of Debt of AES under the Financing Documents;
(b) Debt incurred by a Subsidiary:
(i) to finance the development, acquisition, construction,
operation, maintenance or working capital requirements (including
letters of credit or guarantees to fund debt service reserve accounts
or similar accounts) of a Power
Project or other business operated or managed (including on a joint
basis with others), directly or indirectly, by AES (an "AES BUSINESS"),
and
(ii) that is not also the Debt of any other Subsidiary with an
interest in any other AES Business (except for Debt incurred or assumed
by Intermediate Holding Companies (as defined in Section 5.16(b) below)
(other than Specified Subsidiaries) which, at the time such Debt was
incurred or assumed, in the aggregate, contributed less than 50% of the
Parent Operating Cash Flow (other than Parent Operating Cash Flow
attributable to Specified Subsidiaries) for the immediately preceding
four fiscal quarters);
(c) Debt existing on the date hereof;
(d) Debt owing to AES or a Consolidated Subsidiary of AES;
(e) Debt representing a refinancing, replacement or refunding of Debt
permitted by clauses (b) and (c) above; PROVIDED that:
(i) the aggregate principal amount of such Debt outstanding or
available will not exceed the principal amount outstanding or available
at the time of such refinancing, replacement or refunding (plus fees
and expenses, including any premium and defeasance costs) relating to
such refinancing, replacement or refunding, UNLESS in the case of Debt
refinancing, replacing or refunding Debt of any Subsidiary permitted by
clause (b) above:
(x) both before and after giving effect to such
refinancing, replacing or refunding no Default shall have
occurred and be continuing; and
(y) any such excess is received by AES or a Qualified
Holding Company as a result of such excess being used to pay
dividends or make distributions on Capital Stock of, or repay
Debt owed by, such Subsidiary and any other Subsidiary in the
chain of ownership between AES and such Subsidiary; and
(z) on a pro forma basis after giving effect to such
refinancing, replacement or refunding and the application of
the proceeds thereof AES would have been in compliance with
Section 5.13 (Cash Flow Coverage) as of the last day of the
fiscal quarter ended on or most recently ended prior to, the
date of such refinancing, replacement or refunding (assuming
for this purpose that such refinancing, replacement or
refunding occurred and the proceeds were applied on the first
day of the period of four consecutive fiscal quarters ended on
such last day).
(ii) no obligor shall be liable for any such Debt except to
the extent that it was liable for the Debt so refinanced, replaced or
refunded (except that a Subsidiary of AES (the "REFINANCING
SUBSIDIARY") that either has a direct or indirect interest in an AES
Business may incur Debt the proceeds of which are used to refinance
Debt of another Subsidiary of AES (the "REFINANCED SUBSIDIARY") that
has a direct or indirect interest in such AES Business; PROVIDED that
the Refinancing Subsidiary has no direct or indirect interest in any
AES Business other than AES Business in which the Refinanced Subsidiary
has a direct or indirect interest); and
(iii) if any Debt being refinanced, replaced or refunded is
subordinated to the Debt of any Borrower hereunder or of any Subsidiary
under any Guarantee thereof, such Debt shall be subordinated at least
to the same extent; and
(f) other Debt not described in clauses (a) through (e) above in an
aggregate principal amount at any time outstanding not to exceed $10,000,000.
SECTION 5.08. MINIMUM CONSOLIDATED NET WORTH. Consolidated Net Worth
will at no time be less than the sum of (i) $2,950,000,000 PLUS (ii) for each
fiscal quarter of AES ended after the Closing Date and at or prior to such time
for which Consolidated Net Income is a positive number, an amount equal to 50%
of Consolidated Net Income for such fiscal quarter PLUS (iii) an amount equal to
75% of the cumulative net proceeds to AES from issuances of equity securities
made by AES from and after the Closing Date.
SECTION 5.09. RESTRICTED PAYMENTS. Neither AES nor any Subsidiary will
declare or make any Restricted Payment unless, after giving effect thereto, the
aggregate of all Restricted Payments declared or made subsequent to December 31,
1999 does not exceed the sum of $47 million PLUS 5% (or, if such amount is a
LOSS, MINUS 100%) of Consolidated Net Income of AES and its Consolidated
Subsidiaries for the period from December 31, 1999 through the last day of the
fiscal quarter of AES then most recently ended (treated for this purpose as a
single accounting period). Nothing in this Section shall prohibit the payment of
any dividend or distribution within 45 days after the declaration thereof if
such declaration was not prohibited by this Section.
SECTION 5.10. NEGATIVE PLEDGE. Neither AES nor any Subsidiary of AES
will create, assume or suffer to exist any Lien on any asset now owned or
hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement;
(b) any Lien existing on any asset of any corporation at the time such
corporation becomes a Subsidiary of AES and not created in contemplation of such
event;
(c) any Lien on any asset securing Debt incurred or assumed for the
purpose of financing all or any part of the cost of acquiring such asset;
PROVIDED that such Lien attaches to such asset concurrently with or within 90
days after the acquisition thereof;
(d) any Lien on any asset of any corporation existing at the time such
corporation is merged or consolidated with or into AES or a Subsidiary of AES
and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition thereof by
AES or a Subsidiary of AES and not created in contemplation of such acquisition;
(f) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses or clause (l) of this Section; PROVIDED that such Debt is not increased
and is not secured by any additional assets (other than, in the case of Debt
permitted under Section 5.07(e), Liens on assets of any Subsidiary permitted
under such Section 5.07(e) to be obligated on such Debt);
(g) Liens arising in the ordinary course of its business which (i) do
not secure Debt, (ii) do not secure any obligation in any amount exceeding
$25,000,000 and (iii) do not in the aggregate materially detract from the value
of its assets or materially impair the use thereof in the operation of its
business;
(h) Liens in connection with worker's compensation, social security
obligations, taxes, assessments, statutory obligations or other similar charges,
good faith deposits in connection with tenders, contracts or leases to which AES
or any of its Subsidiaries is a party or other deposits required to be made in
the ordinary course of business and not in connection with borrowing money or
obtaining advances or credit; PROVIDED in each case that the obligation or
liability arises in the ordinary course of business and if overdue is being
contested in good faith by appropriate proceedings;
(i) inchoate materialmen's, mechanics', workmen's, repairmen's,
employees', carriers', warehousemen's, or other like Liens arising in the
ordinary course of business of AES or its Subsidiaries;
(j) with respect to real property, easements, rights of way,
reservations and other minor defects or irregularities in title which do not
materially impair the use thereof for the purposes for which it is held by AES
or its Subsidiaries;
(k) Liens on cash collateral securing Investment and Guarantee
Commitments; and
(l) Liens securing Debt of Subsidiaries permitted by Section 5.07(b) or
5.07(e) or utility obligations or other customer, supplier or contractor
obligations associated with AES Businesses that are limited to the assets and
revenues of the related AES Businesses and the Capital Stock or other assets
(including contract rights) of Subsidiaries of AES having a direct or indirect
interest in such AES Businesses.
SECTION 5.11. CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. (a) No
Borrower will consolidate or merge with or into any other Person; PROVIDED that
a Borrower may merge with another Person if (i) such Borrower is the corporation
surviving such merger or the corporation surviving such merger assumes all
obligations of such Borrower under the Financing Documents and (ii) immediately
after giving effect to such merger, no Default shall have occurred and be
continuing.
(b) AES will not sell, lease or otherwise transfer, directly or
indirectly, all or any substantial part of the assets of AES and its
Subsidiaries, taken as a whole, to any other Person.
(c) AES will not sell or otherwise transfer, or permit to be sold or
otherwise transferred, directly or indirectly, any shares of Capital Stock of
any AES Finance Subsidiary or any Material AES Entity which are owned, directly
or indirectly, by AES; PROVIDED that AES may transfer, or permit the transfer
of, shares of Capital Stock of a Material AES Entity owned, directly or
indirectly, by AES if:
(i) after giving effect to such transfer, AES will continue to
own, directly or indirectly, at least 80% of the outstanding Capital
Stock of each Material AES
Entity;
(ii) the consideration received by AES or a Subsidiary of AES
for such transfer (A) has a value, as determined by AES, at least equal
to the fair market value of the shares of Capital Stock transferred and
(B) is in the form of cash or Capital Stock or partnership or other
similar equity interests of a Person the principal assets of which
consist of direct or indirect interests in one or more AES Businesses,
or a combination of the foregoing;
(iii) after giving effect to such transfer, no Default shall
have occurred and be continuing;
(iv) on a PRO FORMA basis after giving effect to such
transfer, the Cash Flow Coverage Ratio for the four consecutive fiscal
quarters then most recently ended is in compliance with Sections 5.13
and 5.14 (assuming for this purpose that such transfer occurred on the
first day of such period of four consecutive fiscal quarters);
(v) AES Hawaii, Inc. shall at all times remain a direct
Subsidiary of AES Hawaii Management and AES Shady Point, Inc. shall at
all times remain a direct Subsidiary of AES Oklahoma;
(vi) AES Western Maryland Management, Inc., AES Mexico Farms
Inc. and AES Warrior Run Limited Partnership shall at all times remain
Subsidiaries of AES Warrior Run and shall hold, directly or indirectly,
substantially all of the assets held by them on March 4, 1999; and
(vii) Southland and Subsidiaries of Southland holding
substantially all of the assets of Southland and its Subsidiaries as of
March 4, 1999 shall at all times remain Subsidiaries of AES Southland.
SECTION 5.12. USE OF PROCEEDS. The proceeds of the Loans made and
Letters of Credit issued under this Agreement will be used by the Borrowers for
working capital and other general corporate purposes. None of such proceeds will
be used, directly or indirectly, for the purpose, whether immediate, incidental
or ultimate, of buying or carrying any "margin stock" within the meaning of
Regulation U or Regulation G.
SECTION 5.13. CASH FLOW COVERAGE. The Cash Flow Coverage Ratio for any
period of four consecutive fiscal quarters of AES ending after the date hereof
shall not be less than 1.35 to 1.00 through December 31, 2001, 1.45 to 1.00 from
January 1, 2002 through
March 31, 2002, 1.50 to 1.00 from April 1, 2002 through June 30, 2002, 1.55 to
1.00 from July 1, 2002 through September 30, 2002, 1.60 to 1.00 from October 1,
2002 through December 31, 2002, and 1.75 to 1.00 from and after January 1, 2003.
SECTION 5.14. RECOURSE DEBT TO RECOURSE CAPITAL RATIO. The Recourse
Debt to Recourse Capital Ratio shall not be more than 0.52 to 1.00 at any time.
SECTION 5.15. TRANSACTION WITH AFFILIATES. Except pursuant to
agreements existing on the date hereof and listed on Schedule I attached hereto,
AES will not, and will not permit any Subsidiary of AES to, directly or
indirectly, in any transaction involving aggregate consideration in excess of
$1,000,000, pay any funds to or for the account of, make any investment (whether
by acquisition of stock or indebtedness, by loan, advance, transfer of property,
guarantee or other agreement to pay, purchase or service, directly or
indirectly, any Debt, or otherwise) in, lease, sell, transfer or otherwise
dispose of any assets, tangible or intangible, to, or participate in, or effect
any transaction in connection with any joint enterprise or other joint
arrangement with, any Affiliate; PROVIDED, HOWEVER, that the foregoing
provisions of this Section shall not prohibit (a) AES from declaring or paying
any lawful dividend so long as, after giving effect thereto, no Default shall
have occurred and be continuing, (b) AES or any Subsidiary of AES from making
sales to or purchases from any Affiliate and, in connection therewith, extending
credit or making payments, or from making payments for services rendered by any
Affiliate, if such sales or purchases are made or such services are rendered in
the ordinary course of business and on terms and conditions at least as
favorable to AES or such Subsidiary as the terms and conditions which would
apply in a similar transaction with a Person not an Affiliate, (c) AES or any
Subsidiary of AES from making payments of principal, interest and premium on any
Debt of AES or such Subsidiary held by an Affiliate if the terms of such Debt
are substantially as favorable to AES or such Subsidiary as the terms which
could have been obtained at the time of the creation of such Debt from a lender
which was not an Affiliate and (d) AES or any Subsidiary of AES from
participating in, or effecting any transaction in connection with, any joint
enterprise or other joint arrangement with any Affiliate if AES or such
Subsidiary participates in the ordinary course of its business and on a basis no
less advantageous than the basis on which such Affiliate participates. The
provisions of this Section 5.17 shall not apply to (i) transactions between AES
or any of its Subsidiaries, on the one hand, and any employee of AES or any of
its Subsidiaries, on the other hand, that are approved by the Board of Directors
of AES or any committee of the Board of Directors consisting of AES's
independent directors and (ii) the payment of reasonable and customary regular
fees to directors of AES or a Subsidiary of AES.
SECTION 5.16. LIMITATION ON INVESTMENTS. (a) AES will not permit any
Specified Subsidiary to make any Investment in, or to consolidate or merge with,
any other Person with a direct or indirect interest in any AES Business other
than the AES Business in which such Specified Subsidiary has a direct or
indirect interest prior to the making of such Investment or the consummation of
such consolidation or merger.
(b) AES will not permit any Subsidiary of AES with any direct or
indirect interest in (i) a Power Project to make any Investment in, or
consolidate or merge with, any other Person with a direct or indirect interest
in any other Power Project or any unrelated business or (ii) any unrelated
business to make any Investment in, or to consolidate or merge with, any other
Person with a direct or indirect interest in any Power Project; PROVIDED that
(A) one or more Subsidiaries of AES (each, an "INTERMEDIATE HOLDING COMPANY")
may serve as holding companies for any or all of AES's direct and indirect
interests in Power Projects and unrelated businesses, so long as:
(I) each such Intermediate Holding Company's direct and
indirect interest in any Power Project or unrelated business shall be
limited to the ownership of Capital Stock or Debt obligations of a
Person with a direct or indirect interest in such Power Project or
unrelated business;
(II) no Lien shall exist upon any asset of any Intermediate
Holding Company (other than Liens on the Capital Stock of, or loan to,
AES or a Subsidiary of an Intermediate Holding Company securing Debt of
such Intermediate Holding Company or such Subsidiary and Liens securing
Debt permitted by Sections 5.07(b) and 5.07(e)); and
(III) no Intermediate Holding Company shall incur, assume,
create or suffer to exist any Debt (including any Guarantee of Debt)
other than Debt owing to AES or any Intermediate Holding Company and
Debt permitted by Sections 5.07(a) and (b) or (to the extent that such
Debt represents a refinancing or replacement of Debt permitted by
Section 5.07(b)) Section 5.07(e); and
(B) AES Electric may make Investments in Power Projects owned by NIGEN
Limited and Medway Power Limited as of the date of this Agreement under any
agreement by which it is bound as of the date of this Agreement.
ARTICLE 6
DEFAULTS
SECTION 6.01. EVENTS OF DEFAULT.
If one or more of the following events ("EVENTS OF DEFAULT") shall have
occurred and be continuing:
(a) any Obligor shall fail to pay when due any principal of any Loan or
any Reimbursement Obligation, or shall fail to pay within three days of the date
when due any interest, fees or other amounts payable under any Financing
Document;
(b) AES shall fail to observe or perform any covenant contained in
Sections 5.07 to 5.16, inclusive, or except in accordance with the terms hereof
and thereof, the Subsidiary Guaranty or the guarantees in Article 9 shall cease
to be in full force and effect;
(c) any Obligor shall fail to observe or perform any covenant or
agreement contained in any Financing Document (other than those covered by
clause (a) or (b) above) for 20 days after written notice thereof has been given
to AES by the Agent at the request of any Bank;
(d) any representation, warranty, certification or statement made by
any Obligor in any Financing Document or in any certificate, financial statement
or other document delivered pursuant to any Financing Document shall prove to
have been incorrect in any material respect when made (or deemed made);
(e) any Borrower shall fail to make any payment in respect of any
Material Debt when due or within any applicable grace period;
(f) any event or condition shall occur which (i) results in the
acceleration of the maturity of any Material Debt of AES or of any Material Debt
of any Subsidiary or Subsidiaries of AES (except AES Placerita and Central
Termica San Nicolas S.A.) that, individually or in the aggregate (in each case
together with any Person in which such Subsidiary has a direct or indirect
equity Investment), contributed 15% or more to Parent Operating Cash Flow for
the four most recently completed fiscal quarters of AES, (ii) results in the
Termination of any commitment to provide financing in an amount in
excess of $50,000,000 to AES or any Material AES Entity or (iii) in the case of
any Borrower, enables (or, with the giving of notice or lapse of time or both,
would enable) the holder of any Material Debt of such Borrower or any Person
acting on such holder's behalf to accelerate the maturity thereof;
(g) a Borrower or any Significant AES Entity shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;
(h) an involuntary case or other proceeding shall be commenced against
a Borrower or any Significant AES Entity seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against a Borrower or any Significant AES Entity under
the federal bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an amount
or amounts aggregating in excess of $15,000,000 which it shall have become
liable to pay under Title IV of ERISA; or notice of intent to terminate a
Material Plan shall be filed under Title IV of ERISA by any member of the ERISA
Group, any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or to cause a trustee to be appointed to administer any Material Plan; or a
condition shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Material Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a default, within the meaning of
Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans
which could cause one or more members of the ERISA Group to incur a current
payment obligation in excess of $15,000,000;
(j) a judgment or order for the payment of money in excess of
$15,000,000 shall be rendered against AES or any Subsidiary of AES, and such
judgment or order shall continue unsatisfied and unstayed for a period of 10
days; or
(k) any person or group of persons (within the meaning of Section 13 or
14 of the Securities Exchange Act of 1934, as amended) other than a member of
the AES Management Group shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under said Act) of 20% or more of the outstanding shares of common stock of AES;
during any period of twelve consecutive calendar months, individuals who were
directors of AES on the first day of such period (or who were appointed or
nominated for election as directors of AES by at least a majority of the
individuals who were directors on the first day of such period) shall cease to
constitute a majority of the board of directors of AES; or any AES Finance
Subsidiary shall fail, at any time, to be a Wholly-Owned Consolidated Subsidiary
of AES;
then, and in every such event, the Agent shall (i) if requested by
Banks having more than 50% in aggregate amount of the Total Exposures, by notice
to the Borrowers terminate the Commitments and they shall thereupon terminate,
and (ii) if requested by Banks having more than 50% of the Total Exposures, by
notice to the Borrowers declare the Notes (together with accrued interest
thereon) to be, and the Notes shall thereupon become, immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrowers; PROVIDED that in the case of any
Automatic Acceleration Event, without any notice to the Borrowers or any other
act by the Agent or the Banks, the Commitments shall thereupon terminate and the
Notes (together with accrued interest thereon) shall become immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrowers.
SECTION 6.02. NOTICE OF DEFAULT. The Agent shall give notice to AES
under Section 6.01(c) promptly upon being requested to do so by any Bank and
shall thereupon notify all the Banks thereof.
SECTION 6.03. CASH COLLATERAL. If any Automatic Acceleration Event
shall occur or the Loans of the Banks shall have otherwise been accelerated or
the Commitments terminated pursuant to Section 6.01, then without any request or
the taking of any other action by the Agent or any of the Banks, the Borrowers
shall be jointly and severally obligated forthwith to pay to the Agent an amount
in immediately available funds equal to the then aggregate amount available for
drawings (regardless of whether any conditions to any such drawing can then be
met) under all Letters of Credit at the time
outstanding, to be held by the Agent as cash collateral as provided in Section
2.15 and Section 2.16.
ARTICLE 7
THE AGENT
SECTION 7.01. APPOINTMENT AND AUTHORIZATION. Each Bank irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under the Financing Documents as are delegated to the
Agent by the terms thereof, together with all such powers as are reasonably
incidental thereto.
SECTION 7.02. AGENT AND AFFILIATES. Citibank, N.A. shall have the same
rights and powers under the Financing Documents as any other Bank and may
exercise or refrain from exercising the same as though it were not the Agent,
and Citibank, N.A. and its affiliates may accept deposits from, lend money to,
and generally engage in any kind of business with AES or any Subsidiary or
affiliate of AES as if it were not the Agent under the Financing Documents.
SECTION 7.03. ACTION BY AGENT. The obligations of the Agent under the
Financing Documents are only those expressly set forth therein. Without limiting
the generality of the foregoing, the Agent shall not be required to take any
action with respect to any Default, except as expressly provided in Article 6.
SECTION 7.04. CONSULTATION WITH EXPERTS. The Agent may consult with
legal counsel (who may be counsel for any Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 7.05. LIABILITY OF AGENT. Neither the Agent nor any of its
affiliates nor any of their respective directors, officers, agents or employees
shall be liable for any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Banks or (ii) in the
absence of its own gross negligence or willful misconduct. Neither the Agent nor
any of its affiliates nor any of their respective directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire into
or verify (i) any statement, warranty or representation made in connection with
the Financing Documents or any Extension of Credit hereunder; (ii) the
performance or observance of any of the covenants or agreements of any Obligor;
(iii) the satisfaction of
any condition specified in Article 3, except receipt of items required to be
delivered to the Agent; or (iv) the validity, effectiveness or genuineness of
the Financing Documents or any other instrument or writing furnished in
connection therewith. The Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement or other writing
(which may be a bank wire, telex, facsimile transmission or similar writing)
believed by it to be genuine or to be signed by the proper party or parties.
SECTION 7.06. INDEMNIFICATION. Each Bank shall, ratably in accordance
with its Commitment, indemnify the Agent, and each Fronting Bank, each of their
respective affiliates and the respective directors, officers, agents and
employees of any of them (to the extent not reimbursed by the Obligors) against
any cost, expense (including counsel fees and disbursements), claim, demand,
action, loss or liability (except such as result from such indemnitees' gross
negligence or willful misconduct) that such indemnitees may suffer or incur in
connection with the Financing Documents or any action taken or omitted by such
indemnitees thereunder.
SECTION 7.07. CREDIT DECISION. Each Bank acknowledges that it has,
independently and without reliance upon the Agent, any Fronting Bank or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently and without
reliance upon the Agent, any Fronting Bank or any other Bank, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking any action under this
Agreement.
SECTION 7.08. SUCCESSOR AGENT. The Agent may resign at any time by
giving notice thereof to the Banks and the Borrowers. Upon any such resignation,
the Required Banks shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Required Banks, and shall
have accepted such appointment, within 30 days after the retiring Agent gives
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $ 100,000,000. Upon the
acceptance of its appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the rights
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of
this Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent.
SECTION 7.09. AGENT'S FEE. AES shall pay to the Agent for its own
account fees in the amounts and at the times previously agreed upon between AES
and the Agent.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR.
If on or prior to the first day of any Interest Period for any Euro-Dollar
Borrowing:
(a) the Agent is advised by the Reference Banks that deposits in
dollars (in the applicable amounts) are not being offered to the Reference Banks
in the relevant market for such Interest Period, or
(b) Banks having 50% or more of the aggregate amount of the Commitments
advise the Agent that the Adjusted London Interbank Offered Rate as determined
by the Agent will not adequately and fairly reflect the cost to such Banks of
funding their Euro-Dollar Loans for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrowers and the
Banks, whereupon until the Agent notifies the Borrowers that the circumstances
giving rise to such suspension no longer exist, (i) the obligations of the Banks
to make Euro-Dollar Loans, or to continue or convert outstanding Loans as or
into Euro-Dollar Loans, shall be suspended and (ii) each outstanding Euro-Dollar
Loan shall be converted into a Base Rate Loan on the last day of the then
current Interest Period applicable thereto. Unless a Borrower notifies the Agent
at least two Domestic Business Days before the date of any Euro-Dollar Borrowing
for which a Notice of Borrowing has previously been given that it elects not to
borrow on such date such Borrowing shall instead be made as a Base Rate
Borrowing.
SECTION 8.02. ILLEGALITY. If, on or after the date of this Agreement,
the adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Euro-Dollar Lending Office) with any request or directive
(whether or not having the force of law) of
any such authority, central bank or comparable agency shall make it unlawful or
impossible for any Bank (or its Euro-Dollar Lending Office) to make, maintain or
fund its Euro-Dollar Loans to any Borrower and such Bank shall so notify the
Agent, the Agent shall forthwith give notice thereof to the other Banks and AES,
whereupon until such Bank notifies AES and the Agent that the circumstances
giving rise to such suspension no longer exist, the obligation of such Bank to
make Euro-Dollar Loans to such Borrower, or to convert outstanding Loans into
Euro-Dollar Loans or continue outstanding Loans as Euro-Dollar Loans, shall be
suspended. Before giving any notice to the Agent pursuant to this Section, such
Bank shall designate a different Euro-Dollar Lending Office if such designation
will avoid the need for giving such notice and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. If such notice is given, each
Euro-Dollar Loan of such Bank then outstanding shall be converted to a Base Rate
Loan either (i) on the last day of the then current Interest Period applicable
to such Euro-Dollar Loan if such Bank may lawfully continue to maintain and fund
such Loan as a Euro-Dollar Loan to such day or (ii) immediately if such Bank
shall determine that it may not lawfully continue to maintain and fund such Loan
as a Euro-Dollar Loan to such day. Interest and principal on any such Base Rate
Loan shall be payable on the same dates as, and on a pro rata basis with, the
interest and principal payable on the related Euro-Dollar Loans of the other
Banks.
SECTION 8.03. INCREASED COST AND REDUCED RETURN. (a) If on or after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Applicable Lending Office) or any
Fronting Bank (any Bank (or its Applicable Lending Office) and any Fronting Bank
being referred to in this Section 8.03 as a "CREDIT PARTY") with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall impose, modify or deem applicable any
reserve (including, without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but excluding with respect to
any Euro-Dollar Loan any such requirement included in an applicable Euro-Dollar
Reserve Percentage), special deposit, insurance assessment or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Credit Party or shall impose on any Credit Party or on the
London interbank market any other condition affecting its Euro-Dollar Loans, its
Note or Notes, the Letters of Credit or its participation therein or its
obligation to make Euro-Dollar Loans or to issue Letters of Credit or to
participate therein and the
result of any of the foregoing is to increase the cost to such Credit Party of
making or maintaining any Euro-Dollar Loan or issuing any Letter of Credit or
participating therein, or to reduce the amount of any sum received or receivable
by such Credit Party under this Agreement or under its Note or Notes with
respect thereto, by an amount deemed by such Credit Party to be material, then,
within 15 days after demand by such Credit Party (with a copy to the Agent), AES
shall pay to such Credit Party such additional amount or amounts as will
compensate such Credit Party for such increased cost or reduction.
(b) If any Credit Party shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Credit Party (or its Parent) as a consequence of such Credit
Party's obligations hereunder to a level below that which such Credit Party (or
its Parent) could have achieved but for such adoption, change, request or
directive (taking into consideration its policies with respect to capital
adequacy) by an amount deemed by such Credit Party to be material, then from
time to time, within 15 days after demand by such Credit Party (with a copy to
the Agent), AES shall pay to such Credit Party such additional amount or amounts
as will compensate such Credit Party (or its Parent) for such reduction.
(c) Each Credit Party will promptly notify AES and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Credit Party to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Credit Party, be otherwise disadvantageous to such Credit
Party. A certificate of any Credit Party claiming compensation under this
Section and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error. In determining
such amount, such Credit Party may use any reasonable averaging and attribution
methods.
SECTION 8.04. TAXES. (a) Any and all payments by any Borrower to or for
the account of any Bank, any Fronting Bank or the Agent hereunder or under any
other Financing Document shall be made free and clear of and without deduction
for any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Bank, each Fronting
Bank and the Agent, taxes imposed on its income (including branch profit taxes),
franchise and similar taxes and other taxes imposed on it that, in any such
case, would not have been imposed but for a material connection between such
Bank, such Fronting Bank or the Agent (as the case may be) and the jurisdiction
imposing such taxes (other than a material connection arising by reason of this
Agreement or any other Financing Document or the receipt of payments made
hereunder or thereunder) (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "TAXES"). If any Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any other Financing Document
to any Bank, any Fronting Bank or the Agent, (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 8.04) such
Bank, such Fronting Bank or the Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
such Borrower shall make such deductions, (iii) such Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law and (iv) such Borrower shall furnish to the
Agent, at its address referred to in Section 10.01, the original or a certified
copy of a receipt evidencing payment thereof.
(b) In addition, each Borrower agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or charges or
similar levies which arise from any payment made by it hereunder or under any
Note or from the execution or delivery of, or otherwise with respect to, this
Agreement or any other Financing Document (hereinafter referred to as "OTHER
TAXES").
(c) Each Borrower agrees to indemnify each Bank, each Fronting Bank and
the Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 8.04) paid by such Bank, such Fronting Bank
or the Agent (as the case may be) and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto. This
indemnification shall be made within 15 days from the date such Bank, such
Fronting Bank or the Agent (as the case may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other Bank,
and from time to time thereafter if requested in writing by AES (but only so
long as such Bank remains lawfully able to do so), shall provide AES with two
duly completed and accurate copies of Internal Revenue
Service form 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Bank is entitled to benefits
under an income tax treaty to which the United States is a party which reduces
the rate of withholding tax on payments of interest or certifying that the
income receivable pursuant to this Agreement is effectively connected with the
conduct of a trade or business in the United States. If the form provided by a
Bank at the time such Bank first becomes a party to this Agreement indicates a
United States interest withholding tax rate in excess of zero, withholding tax
at such rate shall be considered excluded from "Taxes" as defined in Section
8.04(a).
(e) For any period with respect to which a Bank has failed to provide
AES with the appropriate form pursuant to Section 8.04(d) (unless such failure
is due to a change in treaty, law or regulation occurring subsequent to the date
on which a form originally was required to be provided), such Bank shall not be
entitled to indemnification under Section 8.04(a) with respect to Taxes imposed
by the United States; PROVIDED, HOWEVER, that should a Bank, which is otherwise
exempt from or subject to a reduced rate of withholding tax, become subject to
Taxes because of its failure to deliver a form required hereunder, the Borrowers
shall take such steps as such Bank shall reasonably request to assist such Bank
to recover such Taxes.
(f) If any Borrower is required to pay additional amounts to or for the
account of any Bank pursuant to this Section 8.04, then such Bank will change
the jurisdiction of its Applicable Lending Office so as to eliminate or reduce
any such additional payment which may thereafter accrue if such change, in the
judgment of such Bank, is not otherwise disadvantageous to such Bank.
(g) Each Bank, each Fronting Bank and the Agent agrees that it will
promptly (within 30 days) after receiving notice thereof from any taxing
authority, notify AES of the assertion of any liability by such taxing authority
with respect to Taxes or Other Taxes; PROVIDED, that the failure to give such
notice shall not relieve AES of its obligations under this Section 8.04 except
to the extent that AES has been prejudiced by such failure and except that AES
shall not be liable for penalties, interest or expenses accruing after such 30
day period until such time as it receives the notice contemplated above, after
which time it shall be liable for interest, penalties and expenses accruing
after such receipt.
(h) If any Bank, a Fronting Bank or the Agent shall receive a credit or
refund from
a taxing authority (as a result of any error in the imposition of Tax or Other
Tax by such taxing authority) with respect to and actually resulting from an
amount of such Taxes or Other Taxes paid by a Borrower pursuant to subsection
(a) or (c) above, such Bank, such Fronting Bank or the Agent shall promptly pay
to AES the amount so received (without interest thereon, whether or not
received).
SECTION 8.05. BASE RATE LOANS SUBSTITUTED FOR AFFECTED EURO-DOLLAR
LOANS. If (i) the obligation of any Bank to make, or to continue or to convert
outstanding Loans as or to, Euro-Dollar Loans to any Borrower has been suspended
pursuant to Section 8.02 or (ii) any Bank has demanded compensation under
Section 8.03 or 8.04 with respect to its Euro-Dollar Loans to any Borrower and
such Borrower shall, by at least five Euro-Dollar Business Days' prior notice to
such Bank through the Agent, have elected that the provisions of this Section
shall apply to such Bank, then, unless and until such Bank notifies AES that the
circumstances giving rise to such suspension or demand for compensation no
longer exist, all Loans to such Borrower which would otherwise be made by such
Bank as (or continued or converted to) Euro-Dollar Loans shall be made instead
as Base Rate Loans (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the other Banks). If
such Bank notifies such Borrower that the circumstances giving rise to such
suspension or demand for compensation no longer exist, the principal amount of
each such Base Rate Loan shall be converted into a Euro-Dollar Loan on the first
day of the next succeeding Interest Period applicable to the related Euro-Dollar
Loans of the other Banks.
ARTICLE 9
GUARANTY
SECTION 9.01. THE GUARANTY. Subject, in the case of any AES Finance
Subsidiary, to the provisions of Section 9.07, each Guarantor hereby
unconditionally guarantees the full and punctual payment (whether at stated
maturity, upon acceleration or otherwise) of the principal of and interest on
each Note issued by the applicable Borrower pursuant to this Agreement, and the
full and punctual payment of all other amounts payable by such Borrower under
this Agreement. Upon failure by a Borrower to pay punctually any such amount,
the applicable Guarantor shall, subject, in the case of any AES Finance
Subsidiary, to the provisions of Section 9.07, forthwith on demand pay the
amount not so paid at the place and in the manner specified in this Agreement.
Without limiting the generality of the foregoing, each Guarantor's liability
hereunder shall extend to all amounts which constitute part of the obligations
guaranteed by it hereunder and would be owed by a Borrower hereunder but for the
fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving such Borrower.
SECTION 9.02. GUARANTY UNCONDITIONAL. The obligations of each Guarantor
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of any other Obligor under any
Financing Document, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to any
Financing Document;
(iii) any release, impairment, non-perfection or invalidity of
any direct or indirect security for any obligation of any other Obligor
under any Financing Document;
(iv) any change in the corporate existence, structure or
ownership of any Obligor, or any insolvency, bankruptcy, reorganization
or other similar proceeding affecting any other Obligor or its assets
or any resulting release or discharge of any obligation of any other
Obligor contained in any Financing Document;
(v) the existence of any claim, set-off or other rights which
such Guarantor may have at any time against any other Obligor, the
Agent, any Fronting Bank, any Bank or any other Person, whether in
connection herewith or with any unrelated transactions; PROVIDED that
nothing herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or against
any other Obligor for any reason of any Financing Document, or any
provision of applicable law or regulation purporting to prohibit the
payment by any other Obligor of the principal of or interest on any
Note or any other amount payable by it under any Financing Document; or
(vii) any other act or omission to act or delay of any kind by
any Obligor,
the Agent, any Fronting Bank, any Bank or any other Person or any other
circumstance whatsoever which might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of or defense to a
Guarantor's obligations hereunder.
SECTION 9.03. DISCHARGE ONLY UPON PAYMENT IN FULL, REINSTATEMENT IN
CERTAIN CIRCUMSTANCES. Each Guarantor's obligations hereunder shall remain in
full force and effect until the Commitments shall have terminated, the principal
of and interest on the Notes and all other amounts payable by any Obligor under
any Financing Document shall have been paid in full and all Letters of Credit
shall have expired or been terminated. If at any time any payment of principal
of or interest on any Note or any other amount payable by any Borrower under any
Financing Document is rescinded or must be otherwise restored or returned upon
the insolvency, bankruptcy or reorganization of such Borrower or otherwise, the
applicable Guarantor's obligations hereunder with respect to such payment shall
be reinstated at such time as though such payment had been due but not made at
such time.
SECTION 9.04. WAIVER BY THE GUARANTORS. Each Guarantor irrevocably
waives acceptance hereof, presentment, demand, protest and any notice not
provided for herein, as well as any requirement that at any time any action be
taken by any Person against the applicable Borrower or any other Person.
SECTION 9.05. SUBROGATION. Upon making any payment with respect to a
Borrower under this Article 9, the applicable Guarantor shall be subrogated to
the rights of the payee against such Borrower with respect to such payment;
PROVIDED that neither Guarantor shall enforce any payment by way of subrogation
until all amounts of principal of and interest on the Notes and all other
amounts payable by any Borrower under any Financing Document shall have been
paid in full.
SECTION 9.06. STAY OF ACCELERATION. In the event that acceleration of
the time for payment of any amount payable by a Borrower under any Financing
Document is stayed upon insolvency, bankruptcy or reorganization of such
Borrower, all such amounts otherwise subject to acceleration under the terms of
this Agreement shall nonetheless be payable by the applicable Guarantor
hereunder forthwith on demand by the Agent made at the request of the requisite
proportion of the Banks specified in Article 6 of this Agreement.
SECTION 9.07. LIMITATION OF LIABILITY. The obligations of any AES
Finance Subsidiary under this Article 9 shall be limited to an aggregate amount
equal to the
largest amount that would not render its obligations under this Article
9 subject to avoidance under Section 548 of the Bankruptcy Code or any
comparable provisions of any applicable state law.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telex,
facsimile transmission or similar writing) and shall be given to such party: (w)
in the case of AES, any Fronting Bank or the Agent, at its address or telex or
facsimile transmission number set forth on the signature pages hereof, (x) in
the case of any AES Finance Subsidiary, in care of AES at the address or telex
or facsimile transmission number of AES set forth on the signature pages hereof,
(y) in the case of any Bank, at its address or telex or facsimile transmission
number set forth in its Administrative Questionnaire or (z) in the case of any
party, at such other address or telex or facsimile transmission number as such
party may hereafter specify for the purpose by notice to the Agent, the Fronting
Banks and AES. Each such notice, request or other communication shall be
effective (i) if given by telex, when such telex is transmitted to the telex
number specified in or pursuant to this Section and the appropriate answerback
is received, (ii) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid, addressed as aforesaid
or (iii) if given by any other means, when delivered at the address specified in
or pursuant to this Section; PROVIDED that notices to the Agent or a Fronting
Bank under Article 2 or Article 8 shall not be effective until received.
SECTION 10.02. NO WAIVERS. No failure or delay by the Agent, any
Fronting Bank or any Bank in exercising any right, power or privilege hereunder
or under any other Financing Document shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 10.03. EXPENSES; INDEMNIFICATION. (a) AES shall pay (i) all
out-of-pocket expenses of the Agent, including reasonable fees and disbursements
of special counsel for the Agent, in connection with the preparation and
administration of this Agreement and the other Financing Documents, any waiver
or consent hereunder or any amendment hereof or any Default or alleged Default
hereunder and (ii) if an Event of Default occurs, all out-of-pocket expenses
incurred by the Agent, each Fronting Bank and each Bank,
including (without duplication) the fees and disbursements of outside counsel
and the allocated cost of inside counsel, in connection with such Event of
Default and collection, bankruptcy, insolvency and other enforcement proceedings
resulting therefrom.
(b) AES agrees to indemnify the Agent, each Fronting Bank and each
Bank, their respective affiliates and the respective directors, officers, agents
and employees of the foregoing (each an "INDEMNITEE") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in connection
with any investigative, administrative or judicial proceeding (whether or not
such Indemnitee shall be designated a party thereto) brought or threatened
relating to or arising out of the Financing Documents or any actual or proposed
use of proceeds of Loans or Letters of Credit hereunder or the issuance or
deemed issuance of any Letter of Credit hereunder; PROVIDED that no Indemnitee
shall have the right to be indemnified hereunder for such Indemnitee's own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction.
SECTION 10.04. SHARING OF SET-OFFS. Each Bank agrees that if it shall,
by exercising any right of set-off or counterclaim or otherwise, receive payment
of a proportion of the aggregate amount due with respect to the Total
Outstandings of such Bank which is greater than the proportion received by any
other Bank in respect of the aggregate amount due with respect to the Total
Outstandings of such other Bank, the Bank receiving such proportionately greater
payment shall purchase such Participations in the Total Outstandings of the
other Banks, and such other adjustments shall be made, as may be required so
that all such payments with respect to the Total Outstandings of the Banks shall
be shared by the Banks pro rata; PROVIDED that nothing in this Section shall
impair the right of any Bank to exercise any right of set-off or counterclaim it
may have and to apply the amount subject to such exercise to the payment of
indebtedness of a Borrower other than its indebtedness in respect of the Total
Outstandings of any Bank. Each Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in a
Note or in any Letter of Credit Liability, whether or not acquired pursuant to
the foregoing arrangements, may exercise rights of set-off or counterclaim and
other rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of such Borrower in the amount of such
participation.
SECTION 10.05. AMENDMENTS AND WAIVERS. Any provision of this Agreement
or any
other Financing Document may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by each Borrower, each Fronting
Bank and the Required Banks (and, if the rights or duties of the Agent are
affected thereby, by the Agent); PROVIDED that no such amendment or waiver
shall, unless signed by all the Banks, (i) increase or decrease the Commitment
of any Bank (except for a ratable decrease in Commitments of all Banks) or
subject any Bank to any additional obligation, (ii) reduce the principal of or
rate of interest on any Loan or Reimbursement Obligation or any fees hereunder,
(iii) postpone the date fixed for any payment of principal of or interest on any
Loan or Reimbursement Obligation or any fees hereunder or for any reduction or
termination of any Commitment, (iv) change the percentage of the Commitments or
of the Total Exposures, or the number of Banks, which shall be required for the
Banks or any of them to take any action under this Section or any other
provision of this Agreement or any other Financing Document, or (v) release
either Subsidiary Guarantor from its obligations under Section 2 of the
Subsidiary Guaranty or any Guarantor from its obligations under Article 9
hereof.
SECTION 10.06. SUCCESSORS AND ASSIGNS. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that no Borrower may assign
or otherwise transfer any of its rights under this Agreement without the prior
written consent of all Banks.
(b) Any Bank other than a Conduit Lender may at any time grant to one
or more banks or other institutions (each a "PARTICIPANT") participating
interests in its Commitment or any or all of its Loans or participating
interests in Letter of Credit Liabilities. In the event of any such grant by a
Bank of a participating interest to a Participant, whether or not upon notice to
the Borrowers, the Fronting Banks and the Agent, such Bank shall remain
responsible for the performance of its obligations hereunder, and the Borrowers,
the Fronting Bank and the Agent shall continue to deal solely and directly with
such Bank in connection with such Bank's rights and obligations under this
Agreement. Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall retain the sole right
and responsibility to enforce the obligations of the Borrowers hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement or any other Financing Document;
PROVIDED that such participation agreement may provide that such Bank will not
agree to any modification, amendment or waiver of this Agreement described in
clause (i), (ii), (iii) or (v) of Section 10.05 without the consent of the
Participant. The Borrowers agree that each Participant shall, to the extent
provided in its participation agreement, be entitled to the benefits of Article
8 with respect to its participating interest. An assignment or other transfer
which is not permitted
by subsection (c) or (d) below shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in accordance
with this subsection (b).
(c) Any Bank other than a Conduit Lender may at any time assign to one
or more banks or other institutions (each an "ASSIGNEE") all, or a proportionate
part (equivalent to an initial Commitment of not less than $5,000,000) of all,
of its rights and obligations under this Agreement and the other Financing
Documents, and such Assignee shall assume such rights and obligations, pursuant
to an Assignment and Assumption Agreement in substantially the form of Exhibit G
hereto executed by such Assignee and such transferor Bank, with (and subject to)
the subscribed consent of AES (which shall not be unreasonably withheld but
which shall not be required if an Event of Default shall have occurred and is
continuing),the Fronting Banks and the Agent; PROVIDED that if an Assignee is an
affiliate of such transferor Bank, no such consent shall be required. Upon
execution and delivery of such instrument and payment by such Assignee to such
transferor Bank of an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, such Assignee shall be a Bank party to this
Agreement and shall have all the rights and obligations of a Bank with a
Commitment as set forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a corresponding extent,
and no further consent or action by any party shall be required. Upon the
consummation of any assignment pursuant to this subsection (c), the transferor
Bank, the Agent and the Borrowers shall make appropriate arrangements so that,
if required, new Notes are issued to the Assignee. In connection with any such
assignment, the transferor Bank or Assignee shall pay to the Agent an
administrative fee for processing such assignment in the amount of $3,000. If
the Assignee is not incorporated under the laws of the United States of America
or a state thereof, it shall deliver to AES and the Agent certification as to
exemption from deduction or withholding of any United States federal income
taxes in accordance with Section 8.04. Notwithstanding the foregoing, any
Conduit Lender may assign at any time to its designating Bank hereunder without
the consent of the Borrower or the Agent any or all of the Loans it may have
funded hereunder and pursuant to its designation agreement and without regard to
the limitations set forth in the first sentence of this Section 10.06(c).
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and the other Financing Documents to a Federal Reserve
Bank. No such assignment shall release the transferor Bank from its obligations
hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights
shall be
entitled to receive any greater payment under Section 8.03 or 8.04 than such
Bank would have been entitled to receive with respect to the rights transferred,
unless such transfer is made with AES's prior written consent or by reason of
the provisions of Section 8.02, 8.03 or 8.04 requiring such Bank to designate a
different Applicable Lending Office under certain circumstances or at a time
when the circumstances giving rise to such greater payment did not exist.
(f) Each of the Borrower, the Agent and each Lender hereby confirms
that it will not institute against a Conduit Lender or join any other Person in
instituting against a Conduit Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding under any state bankruptcy or
similar law, for one year and one day after the payment in full of the latest
maturing commercial paper note issued by such Conduit Lender; PROVIDED, however,
that each Bank designating any Conduit Lender hereby agrees to indemnify, save
and hold harmless each other party hereto for any loss, cost, damage or expense
arising out of its inability to institute such a proceeding against such Conduit
Lender during such period of forbearance.
SECTION 10.07. COLLATERAL. Each of the Banks represents to the Agent
and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U or Regulation G) as collateral in the
extension or maintenance of the credit provided for in this Agreement.
SECTION 10.08. GOVERNING LAW; SUBMISSION TO JURISDICTION. This
Agreement and the other Financing Documents shall be governed by and construed
in accordance with the laws of the State of New York. Each Borrower hereby
submits to the nonexclusive jurisdiction of the United States District Court for
the Southern District of New York and of any New York State court sitting in New
York City for purposes of all legal proceedings arising out of or relating to
this Agreement and the other Financing Documents or the transactions
contemplated hereby. Each Borrower irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.
SECTION 10.09. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement and the other Financing Documents constitute the
entire agreement and understanding among the parties hereto and supersede any
and all prior agreements and understandings, oral or written, relating to the
subject matter hereof. This Agreement
shall become effective upon receipt by the Agent of counterparts hereof signed
by each of the parties hereto, other than any AES Finance Subsidiary (or, in the
case of any such party as to which an executed counterpart shall not have been
received, receipt by the Agent in form satisfactory to it of telegraphic, telex,
facsimile transmission or other written confirmation from such party of
execution of a counterpart hereof by such party).
SECTION 10.10. CONFIDENTIALITY. The Agent and each Bank agrees to keep
confidential all non-public information provided to it by AES pursuant to this
Agreement that is designated by AES as confidential; PROVIDED that nothing
herein shall prevent the Agent or any Bank from disclosing any such information
(a) to the Agent, any other Bank or any affiliate of any Bank, (b) to any (i)
actual or prospective transferee, or (ii) Derivatives Obligations counterparty
(or such contractual counterparty's professional advisor), in each case that
agrees to comply with the provisions of this Section, (c) to its employees,
directors, agents, attorneys, accountants and other professional advisors or
those of any of its affiliates, (d) upon the request or demand of any
governmental authority, (e) in response to any order of any court or other
governmental authority or as may otherwise be required pursuant to any
requirement of law, (f) if required to do so in connection with any litigation
or similar proceeding, (g) that has been publicly disclosed, (h) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Bank's investment portfolio in connection with ratings issued with respect to
such Bank, or (i) in connection with the exercise of any remedy hereunder or
under any other Financing Documents.
SECTION 10.11. WAIVER OF JURY TRIAL. EACH OF THE BORROWERS, THE
FRONTING BANKS, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE OTHER FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
SECTION 10.12. SEVERABILITY; MODIFICATION TO CONFORM TO LAW. It is the
intention of the parties that this Agreement be enforceable to the fullest
extent permissible under applicable law, but that the unenforceability (or
modification to conform to such law) of any provision or provisions hereof shall
not render unenforceable, or impair, the remainder hereof. If any provision of
this Agreement shall be held invalid or unenforceable in whole or in part in any
jurisdiction, this Agreement shall, as to such jurisdiction, be deemed amended
to modify or delete, as necessary, the offending provision or provisions and to
alter the bounds thereof in order to render it or them valid and enforceable to
the maximum extent permitted by applicable law, without in any
manner affecting the validity or enforceability of such provision or provisions
in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.
SECTION 10.13. APPOINTMENT OF AGENT FOR SERVICE OF PROCESS. Each AES
Finance Subsidiary hereby irrevocably designates, appoints, authorizes and
empowers as its agent for service of process CT Corporation System, at its
offices currently located at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, to accept and acknowledge for and on behalf of such AES Finance
Subsidiary service of any and all process, notices or other documents that may
be served in any suit, action or proceeding relating to any Financing Document
in any New York State or Federal court sitting in The State of New York.
SECTION 10.14. JUDGMENT CURRENCY. If for the purposes of enforcing the
obligations of any Borrower hereunder it is necessary to convert a sum due from
such Person in U.S. dollars ("DOLLARS") into another 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 the Agent, the Fronting Banks and the Banks could purchase dollars
with such currency at or about 11:00 A.M. (New York City time) on the Domestic
Business Day preceding that on which final judgment is given. The obligations in
respect of any sum due to the Agent, the Fronting Banks and the Banks hereunder
shall, notwithstanding any adjudication expressed in a currency other than
dollars, be discharged only to the extent that on the Domestic Business Day
following receipt by the Agent, the Fronting Banks and the Banks of any sum
adjudged to be so due in such other currency the Agent, the Fronting Banks and
the Banks may in accordance with normal banking procedures purchase dollars with
such other currency; if the amount of dollars so purchased is less than the sum
originally due to the Agent, the Fronting Banks and the Banks in dollars, each
Borrower agrees, to the fullest extent that it may effectively do so, as a
separate obligation and notwithstanding any such adjudication, to indemnify the
Agent, the Fronting Banks and the Banks against such loss, and if the amount of
dollars so purchased exceeds the sum originally due to the Agent, the Fronting
Banks and the Banks, it shall remit such excess to the applicable Borrower.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
THE AES CORPORATION
By
Title:
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
BANKS:
CITIBANK, N.A.
By
Title:
BANK OF AMERICA, N.A.
By
Title:
XXXXXX GUARANTY TRUST COMPANY OF
NEW YORK
By
Title:
FRONTING BANKS:
BANK OF AMERICA, N.A., as Fronting Bank
By
Title:
Address: Credit Services
X.X. Xxx 000000
Xxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: Xxxxxxx Xxxxx
XXXXXX GUARANTY TRUST COMPANY OF
NEW YORK, as Fronting Bank
By
Title:
Address: 000 Xxxxxxx Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Lung HO
FLEET NATIONAL BANK, as Fronting Bank
By
Title:
Address: 000 Xxxxxxx Xxxxxx
XX XX 00000X
Energy and Utilities Group
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxx Xxxxxx
BARCLAYS BANK PLC, as Fronting Bank
By
Title:
Address: 000 Xxxxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Sydney X. Xxxxxx
UNION BANK OF CALIFORNIA, N.A., as
Fronting Bank
By
Title:
Address: 000 Xxxxx Xxxxxxxx Xxxxxx,
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
AUSTRALIA AND NEW ZEALAND BANKING
GROUP LIMITED, as Fronting Bank
By
Title:
Address: 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: Xxxx Xxxxxx
AGENT:
CITIBANK, N.A., as Agent
By
Title:
Address: 000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxx Xxx
APPENDIX
COMMITMENTS
-----------
NAME OF BANK COMMITMENT
------------ ------------
Citibank, N.A. $400,000,000
Bank of America, N.A. $200,000,000
Xxxxxx Guaranty Trust Company $250,000,000
of New York
TOTAL $850,000,000
PRICING SCHEDULE
The "Base Rate Margin", "Euro-Dollar Margin", "Commitment Fee Rate" and
"Letter of Credit Commission Rate" for any day are the respective percentages
set forth below in the applicable row under the column corresponding to the
Status that exists on such day:
===========================================================================================================
Status Level I Level II Level III Level IV Level V
===========================================================================================================
Base Rate Margin 0% 0.25% 0.50% 1.0% 1.35%
-----------------------------------------------------------------------------------------------------------
Euro-Dollar Margin 1.25% 1.75% 2.00% 2.50% 2.75
-----------------------------------------------------------------------------------------------------------
Commitment Fee Rate 0.250% 0.375% 0.50% 0.50% 0.50%
-----------------------------------------------------------------------------------------------------------
Letter of Credit 1.00% 1.50% 1.75% 2.25% 2.50%
Commission Rate
(Financial Letters of
Credit, as determined
by the Agent)
-----------------------------------------------------------------------------------------------------------
Letter of Credit 0.750% 1.125% 1.375% 1.625% 1.875%
Commission Rate
(Performance Letters
of Credit, as
determined by the
Agent)
===========================================================================================================
For purposes of this Schedule, the following terms have the following
meanings:
"Level I Status" exists at any date if, at such date, AES's long-term
debt is rated BBB- or higher by S&P and Baa3 or higher by Moody's.
"Level II Status" exists at any date if, at such date, (i) AES's
long-term debt is rated BB+ or higher by S&P and Ba I or higher by Moody's and
(ii) Level I Status does not exist.
"Level III Status" exists at any date if, at such date, (i) AES's
long-term debt is rated BB or higher by S&P and Ba2 or higher by Moody's and
(ii) neither Level I Status nor Level 11 Status exists.
"Level IV Status" exists at any date if, at such date, (i) AES's
long-term debt is rated BB- or higher by S&P and Ba3 or higher by Moody's and
(ii) none of Level I
Status, Level II Status and Level III Status exists.
"Level V Status" exists at any date if, at such date, no other Status
exists.
"Moody's" means Xxxxx'x Investors Service, Inc.
"S&P" means Standard & Poor's Ratings Services.
"Status" refers to the determination which of Level I Status, Level II
Status, Level III Status, Level IV Status or Level V Status exists at any date.
The credit ratings to be utilized for purposes of this Schedule are
those assigned to the senior unsecured long-term debt securities of AES
(including, if no senior unsecured long-term debt securities of AES are
outstanding, any such ratings that Moody's or S&P has explicitly stated may be
implied from the ratings it has assigned to AES's outstanding subordinated
unsecured long-term debt securities or, if Moody's or S&P has not explicitly
stated any such implied rating, the rating that is two (including, for this
purpose, "pluses" and "minuses" and "1", "2" and "3" as separate ratings)
ratings above the rating assigned to the subordinated long-term debt securities
of AES by Moody's or S&P, as the case may be) without third-party credit
enhancement, and any rating assigned to any other debt security of AES shall be
disregarded. The rating in effect at any date is that in effect at the close of
business on such date.
Notwithstanding the foregoing, the Base Rate Margin and the Euro-Dollar
Margin for any date shall be 2.00% over the otherwise applicable rate if an
Event of Default has occurred and is continuing on such date.
