Exhibit 4.1
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made and entered into as of
November 14, 2001, by IPALCO Enterprises, Inc., an Indiana corporation (the
"Pledgor") in favor of Bank One, National Association, a national banking
association, as collateral agent (the "Collateral Agent") for the benefit of
the Secured Parties (as defined below).
W I T N E S S E T H:
WHEREAS, Indianapolis Power & Light Company, an Indiana corporation
("IPL") is a direct owned subsidiary of the Pledgor; and the Pledgor is the
record and beneficial owner of all of the outstanding common stock of IPL;
WHEREAS, Pledgor and Bank One, National Association, as trustee (the
"Trustee"), have entered into that certain indenture dated as of November 14,
2001 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the "Indenture"), pursuant to which Pledgor has issued
$375,000,000 aggregate principal amount of 7.375% Senior Secured Notes due 2008
and $375,000,000 aggregate principal amount of 7.625% Senior Secured Notes due
2011 (collectively, the "Senior Notes");
WHEREAS, the Senior Notes are being issued to repay all outstanding
borrowings outstanding under Pledgor's revolving credit facility and the
Pledgor will distribute the remaining amount of the net proceeds to its parent
corporation, The AES Corporation, a Delaware corporation ("AES");
WHEREAS, the terms of the Indenture require that the Pledgor (a) pledge to
the Collateral Agent for the equal and ratable benefit of the holders of the
outstanding Senior Notes (the "Noteholders") and grant to the Collateral Agent
for the equal and ratable benefit of the Noteholders a security interest in,
the Collateral (as defined herein) and (b) execute and deliver this Agreement
in order to secure the payment and performance by the Pledgor of all of the
Senior Note Obligations (as defined herein) of the Pledgor under the Indenture
and the Senior Notes;
WHEREAS, the Pledgor may incur additional secured indebtedness from time
to time, to the extent permitted pursuant to the Indenture, that is by its
terms to be equally and ratably secured hereunder with the Senior Note
Obligations ("Additional Secured Debt"), as hereinafter provided (with any
holders of Additional Secured Debt from time to time being herein collectively
called "Additional Debtholders", and with all documentation evidencing, or
entered into in connection with, any Additional Secured Debt, including without
limitation any mortgage, indenture or other instrument, being herein called
"Additional Debt Documents");
WHEREAS, any such Additional Secured Debt issued after the date hereof
shall be secured equally and ratably with the Senior Note Obligations, pursuant
to a Pledge Agreement Supplement substantially in the form of Annex A hereto;
and
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WHEREAS, it is a condition precedent to the obligations of the initial
purchasers of the Senior Notes under the purchase agreement (the "Purchase
Agreement") entered into in connection with the issuance of the Senior Notes
that the Pledgor shall have executed and delivered to the Collateral Agent this
Agreement and it is to the advantage of the Pledgor that the Senior Notes be
issued.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, and in order to induce
the Noteholders to purchase the Senior Notes, the Pledgor hereby covenants and
agrees with the Collateral Agent for its benefit and the equal and ratable
benefit of the Noteholders and the Additional Debtholders, which shall be
identified from time to time on Schedule I hereto in accordance with Section
18.17, in each case to the extent from time to time holding Obligations of the
Pledgor secured hereunder (collectively, and together with the Collateral
Agent, the "Secured Parties") as follows:
SECTION 1. Definitions. Capitalized terms used herein and not defined
herein shall have the meanings given to such terms in the Indenture. The
following terms when used in this Agreement shall have the following meanings:
"Event of Default" shall mean any Event of Default at any time under,
and as defined in, the Indenture and any Additional Debt Documents.
"Majority Holders" shall mean, at any time, the holders of over 50%
in aggregate principal amount of the outstanding Obligations; provided,
that with respect to any Obligations comprised of indebtedness issued with
original issue discount, the amount outstanding at any time shall be the
face amount of such indebtedness less the remaining unamortized portion of
the original issue discount of such indebtedness at such time as
determined in conformity with GAAP.
"Obligations" shall mean, collectively and without duplication, all
such obligations, liabilities, sums and expenses as follows:
(i) the full and prompt payment when due (whether at stated
maturity, by acceleration or otherwise) of all (x) principal of and
interest on the Senior Notes and (y) all other obligations (including
obligations which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due), liabilities and indebtedness
of the Pledgor to the holders of the Senior Notes (including, without
limitation, interest accruing at the then applicable rate provided in
the Senior Notes, respectively after the maturity thereof and
interest accruing at the then applicable rate provided in the Senior
Notes, respectively after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like
proceeding relating to the Pledgor, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding),
whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred under, arising out of or
in connection with the Senior Notes and the Indenture, and the due
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performance of, and compliance with, all of the terms, conditions and
agreements contained therein by the Pledgor (all such obligations,
liabilities and indebtedness described in this clause (i) being
herein collectively called the "Senior Note Obligations");
(ii) the full and prompt payment when due (whether at stated
maturity, by acceleration or otherwise) of all (x) principal of and
interest on any Additional Secured Debt and (y) all other obligations
(including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due), liabilities
and indebtedness (including, without limitation, indemnitees, fees
and interest thereon) of the Pledgor to the Additional Debtholders
(including, without limitation, interest accruing at the then
applicable rate provided in any class of Additional Secured Debt
after the maturity thereof and interest accruing at the then
applicable rate provided in such Additional Secured Debt after the
filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding relating to the
Pledgor, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) ,whether direct or indirect,
absolute or contingent, due or to become due, or now existing or
hereafter incurred under, arising out of or in connection with any
Additional Debt Documents, and the due performance of, and compliance
with, all of the terms, conditions and agreements contained therein
by the Pledgor (all such obligations, liabilities and indebtedness
described in this clause (ii) being herein collectively called the
"Additional Debt Obligations");
(iii) (x) any and all sums advanced by the Collateral Agent in
order to preserve the Collateral or preserve its security interest in
the Collateral in a manner not in violation of the terms hereof and
(y) any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or
asserted against the Collateral Agent in performing its duties
hereunder, or in any way relating to or arising out of its actions as
Collateral Agent in respect of the Pledge Agreement, including any
other unreimbursed fees and expenses for which the Collateral Agent
is to be reimbursed pursuant to Section 14 hereof; except for those
resulting solely from the Collateral Agent's own gross negligence or
willful misconduct;
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities of the
Pledgor referred to in clauses (i) through (iii) above, after an
Event of Default on any of the Obligations shall have occurred and be
continuing, the reasonable expenses of retaking, holding, preparing
for sale, selling or otherwise disposing of or realizing on the
Collateral or of any exercise by the Collateral Agent of its rights
hereunder, together with reasonable attorneys' fees and costs; and
(v) all amounts paid by any of the Secured Parties as to which
such Secured Party has the right to reimbursement under Section 14 of
this Agreement.
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SECTION 2. Pledge. To secure the full and punctual payment when due and
the full and punctual performance of all of the Obligations, the Pledgor hereby
grants to the Collateral Agent, for the benefit of the Collateral Agent and the
other Secured Parties, a security interest in all of its right, title and
interest in and to the following, whether owned as of the date hereof or
hereafter acquired or arising (the "Collateral"):
(i) all of the issued and outstanding shares of common stock of IPL
listed on Schedule II hereto or hereafter acquired (the "Pledged Shares");
(ii) all certificates representing any of the foregoing; and
(iii) all dividends, cash, instruments and other property and
proceeds from time to time received, receivable or otherwise distributed
in respect of or in exchange for any of the foregoing, excluding all cash
dividends paid in respect of the Pledged Shares so long as no Event of
Default shall have occurred and be continuing at the time of such payment.
SECTION 3. Delivery of Collateral. (a) The Pledgor shall (i) on the date
of this Agreement and (ii) at any time or from time to time thereafter when the
Pledgor shall acquire rights in any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Pledged Shares, whether in addition to, in substitution of, as a
conversion of, or in exchange for, any Pledged Shares, or otherwise in respect
thereof, promptly thereafter, deposit as security with the Collateral Agent the
Pledged Shares owned by the Pledgor and any and all certificates or instruments
representing or evidencing the Collateral. Any and all such certificates or
instruments which shall be held by or on behalf of the Collateral Agent, shall
be in suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Collateral Agent.
From and after the date hereof, the Collateral Agent shall have the right,
at any time after the occurrence and during the continuance of an Event of
Default, and in its discretion without notice to the Pledgor, to transfer to or
to register in the name of the Collateral Agent or any of its nominees any or
all of the Collateral and to exchange certificates or instruments representing
or evidencing Collateral for certificates or instruments of different
denominations, subject to the receipt of any applicable regulatory approvals.
(b) Any sums paid upon or in respect of the Pledged Shares upon the
liquidation or dissolution of IPL shall be paid over to the Collateral Agent to
be held by it hereunder as additional collateral security for the Obligations,
and in case any distribution of capital shall be made on or in respect of the
Pledged Shares or any property shall be distributed upon or with respect to the
Pledged Shares pursuant to the recapitalization or reclassification of the
capital of IPL or pursuant to the reorganization thereof, the property so
distributed shall, unless otherwise subject to a perfected security interest in
favor of the Collateral Agent, and except as otherwise expressly permitted
hereby, be delivered to the Collateral Agent to be held by it hereunder as
additional collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of the Pledged Shares shall be
received by the Pledgor, the Pledgor shall, until such money or property is
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paid or delivered to the Collateral Agent, hold such money or property in trust
for the Secured Parties, segregated from other funds of the Pledgor, as
additional collateral security for the Obligations.
SECTION 4. Representations and Warranties. The Pledgor hereby represents
and warrants on the date hereof:
(a) Each of the Pledgor and IPL has been duly incorporated, is validly
existing as a corporation under the laws of Indiana and has the corporate power
and authority required to carry on its business as it is currently being
conducted and to own, lease and operate its properties, and each is duly
qualified and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
business, financial condition or results of operations of the Pledgor and IPL,
taken as a whole.
(b) The Pledgor is the record and beneficial owner of the Pledged Shares
free and clear of any Lien or claim of any other Person, except for the Lien
created by this Agreement (except for any Liens existing on or after the date
hereof that are permitted under the Indenture, or any options in favor of such
Pledged Shares).
(c) The Pledgor has the legal right to execute and deliver and to grant
the security interest in the Collateral pursuant to this Agreement, and the
execution, delivery and performance of this Agreement (in the case of
performance, subject to receipt of any applicable regulatory approvals) do not
(x) conflict with or constitute a breach of any of the terms or provisions of,
or a default under, the charter or by-laws of the Pledgor or any agreement,
indenture or other instrument to which the Pledgor is a party or by which the
Pledgor or its property is bound, or violate or conflict with any laws,
administrative regulations or rulings or court decrees applicable to the
Pledgor or its respective property (including, without limitation, Regulations
T, U and X of the Board of Governors of the Federal Reserve System), or (y)
result in the creation or imposition of any Lien on any assets of the Pledgor,
other than the Lien contemplated hereby.
(d) The Pledged Shares have been duly authorized and validly issued and
are fully paid and non-assessable.
(e) The Pledged Shares constitute all of the issued and outstanding common
stock of IPL.
(f) The Pledgor has full power and authority to enter into this Agreement
and has the right to vote, pledge and grant a security interest in the
Collateral as provided by this Agreement.
(g) This Agreement has been duly authorized, executed and delivered by the
Pledgor and constitutes a legal, valid and binding obligation of the Pledgor,
enforceable, subject to the receipt of any applicable regulatory approvals,
against the Pledgor in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
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moratorium or similar laws affecting the enforcement of creditors' right and
remedies generally and by equitable principles of general applicability.
(h) Upon the delivery to the Collateral Agent of the Collateral, the
pledge of the Collateral pursuant to this Agreement will create a valid and
perfected first priority (subject to any Liens existing on or after the date
hereof that are permitted under the Indenture) security interest in the
Collateral, securing the payment of the Obligations for the benefit of the
Collateral Agent and the other Secured Parties, and (except as otherwise
specifically provided herein) enforceable as such against all creditors of the
Pledgor, any Persons purporting to purchase any of the Collateral from the
Pledgor and any other Persons whomsoever.
(i) No consent of any other Person and no consent, authorization,
approval, or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required to be obtained by the Pledgor either
(i) for the pledge by the Pledgor of the Collateral pursuant to this Agreement
or for the execution, delivery or, subject to the receipt of any applicable
regulatory approvals, performance of this Agreement by the Pledgor, (ii) for
the validity or, subject to the receipt of any applicable regulatory approvals,
enforceability of the Agreement or the perfection or enforceability of the
Collateral Agent's security interest in the Collateral or (iii) subject to the
receipt of any applicable regulatory approvals, for the exercise by the
Collateral Agent of the voting or other rights provided for in this Agreement
or the remedies in respect of the Collateral pursuant to this Agreement (except
as may be required in connection with such disposition by laws affecting the
offering and sale of securities).
(j) No litigation, investigation or proceeding of or before any arbitrator
or governmental authority is pending or, to the best knowledge of the Pledgor,
threatened by or against the Pledgor or against any of the Pledgor's properties
or revenues with respect to this Agreement or any of the transactions
contemplated hereby.
(k) The chief executive office of the Pledgor is located at its address
set forth on the signature pages of this Agreement.
SECTION 5. Further Assurance. The Pledgor will at all times cause the
security interests granted pursuant to this Agreement to constitute valid
perfected first priority security interests in the Collateral (subject to any
Liens that are permitted under the Indenture), and, (except as otherwise
specifically provided herein) enforceable as such against all creditors of the
Pledgor, any Persons purporting to purchase any Collateral from the Pledgor and
any other Persons whomsoever. The Pledgor will, promptly upon request by the
Collateral Agent, execute and deliver or cause to be executed and delivered to
the Collateral Agent all such instruments and other documents, all in form and
substance satisfactory to the Collateral Agent and take any other actions that
are necessary or desirable to perfect, continue the perfection of, or protect
the first priority of the Collateral Agent's security interest in, the
Collateral, to protect the Collateral against the rights, claims, or interests
of third persons (except to the extent that Liens are permitted under the
Indenture), to enable the Collateral Agent to exercise or enforce its rights
and remedies hereunder, or otherwise to effect the purposes of this Agreement,
including the filing of any financing or continuation statements; provided that
the Pledgor shall not be required to seek regulatory approval to enable the
Collateral Agent to exercise or enforce its rights and remedies hereunder until
an Event of Default has occurred and is continuing with respect to
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which a Default Notice has been delivered to the Collateral Agent in accordance
with Section 12(e) hereof. The Pledgor also hereby authorizes the Collateral
Agent to file any financing or continuation statements with respect to the
Collateral without the signature of the Pledgor to the extent permitted by
applicable law. The Pledgor will pay all costs incurred in connection with any
of the foregoing; provided, however, the Collateral Agent shall have no
obligation to make such filings.
SECTION 6. Voting Rights; Dividends; Etc. (a) So long as no Event of
Default shall have occurred and be continuing with respect to which a Default
Notice has been delivered to the Collateral Agent in accordance with Section
12(e) hereof, the Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Pledged Shares or any part thereof
for any purpose not inconsistent with the terms of this Agreement, the
Indenture or the Additional Debt Documents.
(b) So long as no Event of Default shall have occurred and be continuing
with respect to which a Default Notice has been delivered to the Collateral
Agent in accordance with Section 12(e) hereof, and subject to the terms of the
Indenture and the Additional Debt Documents, the Pledgor shall be entitled to
receive, and to utilize free and clear of the Lien of this Agreement and
without any further action on the part of the Pledgor, the Collateral Agent,
the Secured Parties or any other Person, all cash dividends paid from time to
time in respect of the Pledged Shares.
(c) Any and all (i) dividends and other distributions (other than cash
dividends permitted under Section 6(b) hereof) received, receivable or
otherwise distributed in respect of, or in exchange for, any Collateral and
(ii) cash paid, payable or otherwise distributed in redemption of, or in
exchange for, any Collateral, shall in each case be forthwith delivered to the
Collateral Agent to hold as Collateral and shall, if received by the Pledgor,
be received in trust for the benefit of the Collateral Agent and the Secured
Parties, be segregated from the other property and funds of the Pledgor and be
forthwith delivered to the Collateral Agent as Collateral in the same form as
so received (with any necessary endorsements). The Pledgor shall notify the
Collateral Agent in writing upon the receipt of any cash in accordance with the
previous sentence.
(d) Subject to receipt of any necessary regulatory approval, the
Collateral Agent shall execute and deliver (or cause to be executed and
delivered) to the Pledgor all such proxies and other instruments as the Pledgor
may reasonably request for the purpose of enabling the Pledgor to exercise the
voting and other rights that it is entitled to exercise pursuant to Sections
6(a) and 6(b) above.
(e) Upon the occurrence and during the continuance of an Event of Default
with respect to which a Default Notice has been delivered to the Collateral
Agent in accordance with Section 12(e) hereof, (i) all rights of the Pledgor to
exercise the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to Section 6(a) shall cease, and all such rights
shall thereupon become, subject to receipt of any necessary regulatory
approval, vested in the Collateral Agent, which, to the extent permitted by
law, shall thereupon have the sole right to exercise such voting and other
consensual rights, (ii) all dividends and other distributions payable in
respect of the Collateral shall be paid to the Collateral Agent and the
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Pledgor's right to receive such cash payments pursuant to Section 6(b) hereof
shall immediately cease and (iii) any and all rights of conversion, exchange
and subscription and any other rights, privileges or options pertaining to the
Pledged Shares shall become vested in the Collateral Agent, which, to the
extent permitted by law, shall thereupon have the sole right to exercise such
rights, privileges and options.
(f) Upon the occurrence and during the continuance of an Event of Default
with respect to which a Default Notice has been delivered to the Collateral
Agent in accordance with Section 12(e) hereof, the Pledgor shall, subject to
receipt of any necessary regulatory approval, execute and deliver (or cause to
be executed and delivered) to the Collateral Agent all such proxies and other
instruments as the Collateral Agent may reasonably request for the purpose of
enabling the Collateral Agent to exercise the voting and other rights that it
is entitled to exercise pursuant to Section 6(e) above.
(g) All payments of dividends and other distributions that are received by
the Pledgor contrary to the provisions of this Section 6 shall be received in
trust for the benefit of the Collateral Agent and the Secured Parties, shall be
segregated from the other property or funds of the Pledgor and shall be
forthwith delivered to the Collateral Agent as Collateral in the same form as
so received (with any necessary endorsements).
(h) The Collateral Agent shall invest any portion of the Collateral that
is comprised of cash in Permitted Investments as may be directed by the Pledgor
in writing from time to time. "Permitted Investments" means (i) debt
obligations issued or guaranteed by the government of the United States of
America or any agency thereof for which the full faith and credit of the United
States of America is pledged to secure payment in full at maturity and which
are not redeemable at the option of the issuer prior to maturity and (ii)
investments in time deposits, certificates of deposit or money market deposits
entitled to U.S. Federal deposit insurance for the full amount thereof or
issued by a bank or trust company which is organized under the laws of the
United States or any state thereof having capital in excess of $250 million or
any money-market fund sponsored by any registered broker dealer or mutual fund
distributor; provided that no such investment shall mature later than 180 days
after the date of acquisition thereof. The Collateral Agent shall have no
liability (including for lost profits) in connection with investments of the
Collateral.
SECTION 7. Covenants. The Pledgor hereby covenants and agrees with the
Collateral Agent and the other Secured Parties, that from and after the date of
this Agreement and until the Obligations have been paid in full, as follows:
(a) the Pledgor agrees that at all times it will be the sole beneficial
owner of the Collateral and will not (i) except as otherwise expressly
permitted hereby, sell, assign, transfer, convey or otherwise dispose of, or
grant any option or warrant with respect to, any interest in any of the
Collateral without the prior written consent of the Collateral Agent at the
direction of the Majority Holders, (ii) create or permit to exist any Lien upon
or with respect to any of the Collateral, except for the security interest
granted under this Agreement, and except for Liens that are permitted under the
Indenture, (iii) enter into any agreement or understanding that purports to or
that may restrict or inhibit the Collateral Agent's rights or remedies
hereunder, including, without limitation, the Collateral Agent's right to sell
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or otherwise dispose of the Collateral, or (iv) take any other action with
respect to the Collateral which would result in a violation of the Indenture,
this Agreement or the Additional Debt Documents.
(b) The Pledgor agrees that immediately upon becoming the beneficial owner
of other equity interests of IPL, other than any shares of preferred stock of
IPL outstanding of the date of this Pledge Agreement, it will either (i)
contribute such interests to IPL for cancellation or (ii) pledge and deliver
such interests to the Collateral Agent for its benefit and the ratable benefit
of the Secured Parties and grant to the Collateral Agent for its benefit and
the ratable benefit of the Secured Parties a continuing first priority security
interest in such other equity interests (as well as instruments of transfer or
assignment duly executed in blank and undated, all in form and substance
reasonably satisfactory to the Collateral Agent). The Pledgor further agrees
that in the case of clause (ii) of the preceding sentence to deliver to the
Collateral Agent a certificate executed by the Pledgor describing such
additional equity interests, other than any shares of preferred stock of IPL
outstanding on the date of this Pledge Agreement, and certifying that the same
have been duly pledged and delivered to the Collateral Agent hereunder.
(c) The Pledgor hereby covenants and agrees that promptly after making a
decision to change its State of incorporation it will provide the Collateral
Agent with written notice of its intent to change its State of incorporation
and such notice will include: (i) the anticipated effective date of such
change, (ii) the name of the new State of incorporation, (iii) the new address
of its chief executive offices, if any, and (iv) any other information
reasonably necessary for the Collateral Agent to preserve the first priority
security interest in the Collateral.
SECTION 8. Power of Attorney. The Pledgor hereby appoints and constitutes
the Collateral Agent as the Pledgor's attorney-in-fact to exercise all of the
following powers, subject to the receipt of any necessary regulatory approval,
upon the occurrence and during the continuance of an Event of Default with
respect to which a Default Notice has been delivered to the Collateral Agent in
accordance with Section 12(e) hereof: (i) collection of proceeds of any
Collateral; (ii) conveyance of any item of Collateral to any purchaser thereof;
(iii) giving of any notices or recording of any Liens under Section 5 hereof;
(iv) making of any payments or taking any acts under Section 9 hereof and (v)
paying or discharging taxes or Liens levied or placed upon or threatened
against the Collateral, the legality or validity thereof and the amounts
necessary to discharge the same to be determined in good faith by the
Collateral Agent in its sole discretion; (vi) defend any suit, action or
proceeding brought against the Pledgor with respect to any Collateral; and
(vii) exercise any of the rights set forth in Sections 6 and 12, make any
agreement with respect to the Collateral or otherwise deal with any Collateral
as fully and completely as though the Collateral Agent were the absolute owner
thereof for all purposes. At the Collateral Agent's request, the Majority
Holders, acting through the Trustee in the case of the Securities and through
the Additional Debtholders (or, if applicable, the Additional Secured Debt
Agent) in the case of the Additional Secured Debt, shall provide written
directions to the Collateral Agent with respect to the taking of any such
actions under this Section 8. The Collateral Agent's authority hereunder shall
include, without limitation, the authority to execute and give receipt for any
certificate of ownership relating to the Collateral, transfer title to any item
of Collateral, sign the Pledgor's name on all financing statements or any other
documents deemed necessary or appropriate to preserve, protect or perfect the
security interest in the Collateral and to file the same, prepare, file and
sign the Pledgor's name on any notice of Lien, and to take any other actions
arising from or incident to the powers granted to the Collateral
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Agent in this Agreement. This power of attorney is coupled with an interest and
is irrevocable by the Pledgor.
SECTION 9. Collateral Agent May Perform. If the Pledgor fails to perform
any agreement contained herein, the Collateral Agent may itself perform, or
cause performance of, such agreement, and the expenses of the Collateral Agent
(including the reasonable fees and expenses of its counsel) incurred in
connection therewith shall be payable by the Pledgor pursuant to Section 14
hereof.
SECTION 10. No Assumption of Duties; Reasonable Care. The rights and
powers granted to the Collateral Agent hereunder are being granted in order to
preserve and protect the security interest of the Collateral Agent and the
other Secured Parties in and to the Collateral granted hereby and shall not be
interpreted to, and shall not, impose any duties on the Collateral Agent in
connection therewith. The Collateral Agent shall be deemed to have exercised
reasonable care, under Section 9-207 of the New York Uniform Commercial Code or
otherwise, in the custody and preservation of the Collateral in its possession
if the Collateral is accorded treatment substantially equal to that which the
Collateral Agent accords its own property, it being understood that the
Collateral Agent shall not have any responsibility for (i) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Collateral, whether or not the
Collateral Agent has or is deemed to have knowledge of such matters, or (ii)
taking any necessary steps to preserve rights against any parties with respect
to any Collateral. The Collateral Agent shall be accountable only for amounts
that it actually receives as a result of the exercise of such powers, and
neither it nor its officers, directors, employees or agents shall be
responsible to the Pledgor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct.
SECTION 11. Subsequent Changes Affecting Collateral. The Pledgor
represents to the Secured Parties that it has made its own arrangements for
keeping informed of changes or potential changes affecting the Collateral
(including, but not limited to, rights to convert, rights to subscribe, payment
of dividends, payments of interest and/or principal, reorganization or other
exchanges, tender offers and voting rights), and the Pledgor agrees that the
Collateral Agent and the Secured Parties shall have no responsibility or
liability for informing the Pledgor of any such changes or potential changes or
for taking any action or omitting to take any action with respect thereto. The
Pledgor covenants that it will not, without the prior written consent of the
Collateral Agent as directed in writing by the Trustee and any Additional
Secured Debt Agent, on behalf of the Majority Holders, vote to enable, or take
any other action to permit, IPL to issue any capital stock or other securities
convertible into or exercisable for shares of capital stock of IPL, except
issuances of such capital stock or other securities to Pledgor. The Pledgor
will defend the right, title and interest of the Collateral Agent and the
Secured Parties in and to the Collateral against the claims and demands of all
Persons. The Pledgor will advise the Collateral Agent and the Secured Parties
promptly, in reasonable detail, of (i) any Lien (other than Liens that are
permitted under the Indenture) on any Collateral which could adversely affect
the ability of the Collateral Agent to exercise any of its remedies hereunder
and (ii) the occurrence of any other event which could reasonably be expected
to have a material adverse effect on the security interest created hereby.
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SECTION 12. Remedies Upon Default. (a) If any Event of Default shall have
occurred and be continuing with respect to which a Default Notice has been
delivered to the Collateral Agent in accordance with Section 12(e) hereof, and
only to the extent the Majority Holders have so directed the Collateral Agent
in accordance with Section 12(e), the Collateral Agent shall have and be
entitled to exercise, in addition to all other rights given by law or by this
Agreement, all of the rights and remedies with respect to the Collateral of a
secured party under the Uniform Commercial Code (the "UCC") as in effect in the
State of New York at that time or any other applicable law and shall also be
entitled, without limitation, to exercise the rights set forth in this Section
12(a). The Collateral Agent may, subject to the provision of Section 12(e)
below, without notice and at its option, transfer or register, and the Pledgor
shall register or cause to be registered upon request therefor by the
Collateral Agent, the Collateral or any part thereof on the books of IPL into
the name of the Collateral Agent or the Collateral Agent's nominee(s), with or
without any indication that such Collateral is subject to the security interest
hereunder. In addition, with respect to any Collateral that shall then be in or
shall thereafter come into the possession or custody of the Collateral Agent,
the Collateral Agent may, subject to the provisions of Section 12(e) below,
sell or otherwise dispose of or cause the same to be sold or otherwise disposed
of at any broker's board or at public or private sale, in one or more sales or
lots, for cash or on credit or for future delivery, without assumption of any
credit risk. The purchaser of any or all Collateral so sold shall thereafter
hold the same absolutely, free from any claim, encumbrance or right of any kind
whatsoever. Unless any of the Collateral threatens to decline speedily in value
or is or becomes of a type sold on a recognized market, the Collateral Agent
will give the Pledgor reasonable notice of the time and place of any public
sale thereof, or of the time after which any private sale or other intended
disposition is to be made. Any sale of the Collateral conducted in conformity
with reasonable commercial practices of banks, insurance companies, commercial
finance companies, or other financial institutions disposing of property
similar to the Collateral shall be deemed to be commercially reasonable. Any
requirements of reasonable notice shall be met if such notice is mailed to the
Pledgor as provided below in Section 18.1, at least ten days before the time of
the sale or disposition. Any other requirement of notice, demand or
advertisement for sale is, to the extent permitted by law, waived. The
Collateral Agent or any other Secured Party may, in its own name or in the name
of a designee or nominee, buy any of the Collateral at any public sale and, if
permitted by applicable law, at any private sale. All expenses (including court
costs and reasonable attorneys' fees and disbursements) of, or incident to, the
enforcement of any of the provisions hereof shall be recoverable from the
proceeds of the sale or other disposition of the Collateral.
(b) If, subject to the provisions of Section 12(e) below, the Collateral
Agent shall determine to exercise its right to sell any or all of the Pledged
Shares pursuant to Section 12(a) above, and if in the opinion of counsel for
the Collateral Agent it is necessary to have the Pledged Shares or that portion
thereof to be sold, registered under the provisions of the Securities Act of
1933, as amended (the "Securities Act"), the Pledgor, upon receipt by the
Pledgor of a written request from the Collateral Agent, as directed by and on
behalf of the Majority Holders, will cause IPL to (i) execute and deliver, and
cause its directors and officers to execute and deliver, all at the Pledgor's
expense, all such instruments and documents, and to do or cause to be done all
such other acts and things as may be necessary to register such Pledged Shares
under the provisions of the Securities Act, (ii) cause the registration
statement relating thereto to become effective and to remain effective for a
period of one year from the date of the first public offering of such Pledged
Shares, or that portion thereof to be sold and (iii) make all amendments
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thereto and/or to the related prospectus that are necessary, all in conformity
with the requirements of the Securities Act and the rules and regulations of
the Securities and Exchange Commission applicable thereto. The Pledgor agrees
to cause IPL to comply with the provisions of the securities or "Blue Sky" laws
of any jurisdiction that the Collateral Agent shall designate for the sale of
the Pledged Shares and to make available to IPL's security holders, as soon as
practicable, an earnings statement (which need not be audited) that will
satisfy the provisions of Section 11(a) of the Securities Act. The Pledgor will
cause IPL to furnish to the Collateral Agent such number of copies as the
Collateral Agent may reasonably request of each preliminary and final
prospectus, to notify the Collateral Agent promptly of the happening of any
event as a result of which any then effective prospectus includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
the light of then existing circumstances, and to cause the Collateral Agent to
be furnished with such number of copies as the Collateral Agent may request of
such supplement to or amendment of such prospectus. The Pledgor will, and will
cause IPL, to the maximum extent permitted by law, to indemnify, defend and
hold harmless the Collateral Agent and the Secured Parties from and against all
losses, liabilities, expenses or claims (including reasonable legal fees and
expenses and the reasonable costs of investigation) that the Collateral Agent
or any Secured Party may incur under the Securities Act or otherwise, insofar
as such losses, liabilities, expenses or claims arise out of or are based upon
any alleged untrue statement of a material fact contained in such registration
statement (or any amendment thereto) or in any preliminary or final prospectus
(or any amendment or supplement thereto), or arise out of or are based upon any
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, except to the extent
that any such losses, liabilities, expenses or claims arise solely out of or
are based upon any such alleged untrue statement made or such alleged omission
to state a material fact included or excluded on the written direction of the
Collateral Agent. The Pledgor will bear all costs and expenses of carrying out
its obligations and the obligations of IPL hereunder.
(c) In view of the fact that federal and state securities laws may impose
certain restrictions on the method by which a sale of the Collateral may be
effected after an Event of Default, the Pledgor agrees that upon the occurrence
and continuance of any Event of Default, the Collateral Agent may, from time to
time, attempt to sell all or any part of the Collateral by means of a private
placement, restricting the prospective purchasers to those who will represent
and agree that they are purchasing for investment only and not for
distribution. In so doing, the Collateral Agent may solicit offers to buy the
Collateral, or any part of it, for cash, from a limited number of investors who
might be interested in purchasing the Collateral. The Pledgor acknowledges and
agrees that any such private sale may result in prices and terms less favorable
than if such sale were a public sale and, notwithstanding such circumstances,
agrees that any such private sale shall be deemed to have been made in a
commercially reasonable manner. The Collateral Agent shall be under no
obligation to delay a sale of any of the Collateral for the period of time
necessary to permit IPL to register such securities for public sale under the
Securities Act, or under applicable state securities laws, even if IPL agrees
to do so.
(d) The Pledgor further agrees to use its reasonable best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Collateral pursuant to this Section 12 valid
and binding and in compliance with any and all other applicable requirements of
law; provided that the Pledgor shall not be required to seek regulatory
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approval to enable the Collateral Agent to exercise or enforce its rights and
remedies hereunder until an Event of Default has occurred and is continuing
with respect to which a Default Notice has been delivered to the Collateral
Agent in accordance with Section 12(e) hereof. The Pledgor further agrees that
a breach of any of the covenants contained in this Section 12 will cause
irreparable injury to the Collateral Agent and the Secured Parties, that the
Collateral Agent and the Secured Parties have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section 12 shall be specifically enforceable against the
Pledgor, and the Pledgor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no default or Event of Default has occurred and is continuing
under the Indenture or the Additional Debt Documents.
(e) The Collateral Agent shall not commence or otherwise take any action
or proceeding pursuant to this Section 12 or to realize upon any or all of the
Collateral unless and until the Majority Holders, acting through the Trustee in
the case of the Securities and through the Additional Debtholders (or, if
applicable, the Additional Secured Debt Agent) in the case of the Additional
Secured Debt, shall have notified a responsible officer of the Collateral Agent
in writing of the occurrence of an Event of Default (a "Default Notice") and
shall have directed the Collateral Agent in writing to commence to enforce this
Agreement and/or to realize upon any or all of the Collateral. Upon receipt by
the Collateral Agent of any such notice and direction, the Collateral Agent
shall (i) promptly send copies thereof to all Secured Parties and (ii) subject
to the other terms and provisions of this Agreement, seek to enforce this
Agreement and to realize upon the Collateral. After any such notice and
direction has been given, the Majority Holders shall have the right to give
written directions to the Collateral Agent as to the time, place and manner of
the taking of such actions, and the Collateral Agent shall be required to seek
to follow such directions; provided that, at the time of delivery of such
notice, the Majority Holders shall provide the Collateral Agent with a written
calculation establishing their status as the Majority Holders; provided,
further, that the Collateral Agent, prior to acting on such notice, shall
request, and may conclusively rely upon, a statement from the Trustee
confirming the amounts outstanding under the Indenture, and from the relevant
Additional Secured Debt Agent or Additional Debtholder, as applicable,
confirming the principal amount of the Additional Secured Debt outstanding,
respectively; provided, further, that in the absence of such notice and
direction, 45 days after receipt of the Default Notice, the Collateral Agent
shall have the right to take such actions as it deems necessary, advisable or
appropriate; provided, further, that each of the Secured Parties, by its
acceptance of the benefits of this Agreement, agrees that if at any time of
determination such Secured Party is a Majority Holder, such Secured Party shall
exercise its rights pursuant to this sentence in good faith for the benefit of
all of the Secured Parties; and provided further that the Majority Holders may
give written directions to the Collateral Agent to cease or materially curtail
its efforts seeking to enforce this Agreement or to cease or materially curtail
its efforts seeking to realize upon any or all of the Collateral. Upon the
receipt by a responsible officer of the Collateral Agent of any such direction
to so cease, the Collateral Agent shall be required to seek to do so, subject
to the rights of the Majority Holders on behalf of the Secured Parties to give
another written notice and direction of the type referred to above.
(f) Notwithstanding anything to the contrary contained in this Agreement,
the rights of the Collateral Agent with respect to the Collateral, and the
obligations of IPALCO, shall be subject to the receipt of any necessary
regulatory approvals.
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SECTION 13. Intentionally Omitted.
SECTION 14. Fees and Expenses; Indemnity. (a) The Pledgor will, upon
demand, pay to the Collateral Agent the amount of any and all reasonable fees
and expenses (including, without limitation, the reasonable fees and
disbursements of its counsel, of any investment banking firm, accountants,
business broker or other selling agent and of any other such experts and agents
retained by the Collateral Agent, including the allocated costs of inside
counsel, which compensation, expenses and disbursements shall be set forth in
sufficient written detail to the Pledgor) that the Collateral Agent may incur
in connection with (i) the preparation, execution and administration of this
Agreement, and any amendment thereto, (ii) the custody or preservation of, or
the sale of, collection from, or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of the Collateral Agent
and the Secured Parties hereunder or (iv) the failure by the Pledgor to perform
or observe any of the provisions hereof; except any such expense, disbursement
or advance as may be found by a final and nonappealable decision of a court of
competent jurisdiction to be attributable to the Collateral Agent's gross
negligence or willful misconduct, including any and all recording and filing
fees, or stamp, excise, sales or other taxes, which may be payable or
determined to be payable with respect to any of the Collateral or in connection
with any of the transactions contemplated hereby.
(b) The Pledgor shall fully indemnify and hold harmless each of the
Collateral Agent and each other Secured Party and their respective successors,
assigns, employees, agents, servants and representatives (including the Trustee
and any Additional Secured Debt Agent) hereunder (individually an "Indemnity",
and collectively the "Indemnitees") from and against any and all costs,
expenses, claims and liabilities of any kind or nature whatsoever incurred by
such Indemnitee, arising out of or in connection with the execution, delivery,
enforcement, performance and administration of this Agreement, including (i)
any and all recording and filing fees, or stamp, excise, sales or other taxes,
which may be payable or determined to be payable with respect to any of the
Collateral or in connection with any of the transactions contemplated hereby,
(ii) the exercise by any Indemnitee of any right or remedy granted to it
hereunder, and (iii) the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
rights or remedies hereunder; unless such cost, expense, claim or liability
shall be found by a final and nonappealable decision of a court of competent
jurisdiction to be due to gross negligence or willful misconduct on the part of
such Indemnitee.
SECTION 15. Interest Absolute. All rights of the Collateral Agent and the
other Secured Parties and the security interests created hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Indenture or the
Additional Debt Documents or any other agreement or instrument relating
thereto;
(b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations, or any other amendment or waiver of or
any consent to any departure from the Indenture or the Additional Debt
Documents;
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(c) any exchange, surrender, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guarantee, for all or any of the Obligations; or
(d) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Pledgor in respect of the Obligations or
of this Agreement other than the satisfaction in full of the Obligations.
SECTION 16. Application of Proceeds. (a) Upon the occurrence and during
the continuance of an Event of Default with respect to which a Default Notice
has been delivered to the Collateral Agent in accordance with Section 12(e)
hereof, the proceeds of any sale of, or other realization upon, all or any part
of the Collateral and any cash held by the Collateral Agent shall be applied by
the Collateral Agent in the following order of priorities:
first, to payment of all Obligations owing to the Collateral Agent of
the type provided in clauses (iii) and (iv) of the definition of
Obligations;
second, an amount equal to the outstanding Primary Obligations (as
defined below) of the Pledgor shall be paid to the Secured Parties as
provided in Section 16(d), with each Secured Party receiving an amount
equal to its outstanding Primary Obligations of the Pledgor or, if the
proceeds are insufficient to pay in full all such Primary Obligations, its
Pro Rata Share (as defined below) of the amount remaining to be
distributed;
third, an amount equal to the outstanding Remaining Obligations of
the Pledgor shall be paid to the Secured Parties as provided in Section
16(d), with each Secured Party receiving an amount equal to its
outstanding Remaining Obligations of the Pledgor or, if the proceeds are
insufficient to pay in full all such Remaining Obligations, its Pro Rata
Share of the amount remaining to be distributed; and
fourth, upon payment of all Remaining Obligations, to payment to the
Pledgor or its successors or assigns, or as a court of competent
jurisdiction may direct, of any surplus then remaining from such proceeds.
(b) For purposes of this Agreement:
(i) "Pro Rata Share" shall mean, when calculating a Secured Party's
portion of any distribution or amount, that amount (expressed as a
percentage) equal to a fraction the numerator of which is the then unpaid
amount of such Secured Party's Primary Obligations or Remaining
Obligations, as the case may be, of the Pledgor and the denominator of
which is the then outstanding amount of all Principal Obligations or
Remaining Obligations, as the case may be, of the Pledgor;
(ii) "Primary Obligations" of the Pledgor shall mean all Obligations
of the Pledgor secured hereby arising out of or in connection with, the
principal of, premium, if any, and interest on (including all accrued but
unpaid interest) all the outstanding Senior Notes and Additional Secured
Debt at the relevant time; provided, that with respect to any such
Obligations comprised of indebtedness issued with original issue
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discount, the amount outstanding at any time shall be the face amount of
such indebtedness less the remaining unamortized portion of the original
issue discount of such indebtedness at such time as determined in
conformity with GAAP; and
(iii) "Remaining Obligations" of the Pledgor shall mean all
Obligations of the Pledgor secured hereby other than Primary Obligations.
(c) When payments to Secured Parties are based upon their respective Pro
Rata Shares, the amounts received by such Secured Parties hereunder shall be
applied (for purposes of making determinations under this Section 16 only) (i)
first, to the Primary Obligations of the Pledgor and (ii) second, to the
Remaining Obligations of the Pledgor. If any payment to any Secured Party of
its Pro Rata Share of any distribution would result in overpayment to such
Secured Party, such excess amount shall instead be distributed in respect of
the unpaid Primary Obligations or Remaining Obligations, as the case may be, of
the other Secured Parties, with each Secured Party whose Primary Obligations or
Remaining Obligations, as the case may be, have not been paid in full to
receive an amount equal to such excess amount multiplied by a fraction the
numerator of which is the unpaid Primary Obligations or Remaining Obligations,
as the case may be, of such Secured Party and the denominator of which is the
unpaid Primary Obligations or Remaining Obligations, as the case may be, of all
Secured Parties entitled to such distribution.
(d) All payments required to be made hereunder shall be made (i) if to the
Noteholders, to the Trustee and (ii) if to Additional Debtholders, to the
Additional Debtholders or, if applicable, the relevant Additional Secured Debt
Agent.
(e) For purposes of applying payments received in accordance with this
Section 16, the Collateral Agent shall be entitled to rely upon the Secured
Parties for a written determination of the outstanding Primary Obligations and
Remaining Obligations owed to the Noteholders and the Additional Debtholders,
respectively.
(f) It is understood and agreed that the Pledgor shall remain liable to
the extent of any deficiency between the amount of the proceeds of the
Collateral pledged by it hereunder and the aggregate amount of the Obligations
of the Pledgor.
Notwithstanding anything to the contrary in this Agreement, (i) all actions
required or permitted to be taken under this Agreement by the Noteholders shall
be so taken only by the Trustee on behalf of the Noteholders as directed by the
Noteholders, and all actions required or permitted to be taken under this
Agreement by the Additional Debtholders shall be so taken only by the
Additional Debtholders or, if applicable, the relevant Additional Secured Debt
Agent on behalf of the Additional Debtholders as directed by the Additional
Debtholders and (ii) all payments required to be made with respect to the
Senior Note Obligations shall be paid to the Trustee, and all payments required
to be made with respect to the Additional Debt Obligations under the Additional
Debt Documents shall be paid to the Additional Debtholders or, if applicable,
the relevant Additional Secured Debt Agent and the Pledgee shall be entitled
(but not required) to conclusively rely upon and act in accordance with any
instructions from the Trustee and the Additional Debtholders or, if applicable,
any relevant Additional Secured Debt Agent subject to the terms and conditions
of this Agreement and to assume that such instructions are being given
17
in accordance with such Indenture and the terms of the Additional Debt
Documents, respectively.
SECTION 17. Uncertificated Securities. Notwithstanding anything to the
contrary contained herein, if any Pledged Shares (whether now owned or
hereafter acquired) are uncertificated Pledged Shares, the Pledgor shall
promptly notify the Collateral Agent, and shall promptly take all actions
required to perfect the security interest of the Collateral Agent under
applicable law. The Pledgor further agrees to take such actions as the
Collateral Agent deems necessary or desirable to effect the foregoing and to
permit the Collateral Agent to exercise any of its rights and remedies
hereunder, and agrees to provide an Opinion of Counsel reasonably satisfactory
to the Collateral Agent with respect to any such pledge of uncertificated
Pledged Shares promptly upon request of the Collateral Agent.
SECTION 18. Miscellaneous Provisions.
18.1 Notices. All notices, approvals, consents or other communications
required or desired to be given hereunder shall be in the form and manner as
set forth on Schedule III hereto.
18.2 Certificate and Opinion as to Conditions Precedent. Upon any request
or application by the Pledgor to the Collateral Agent to release any
Collateral, other than Collateral released in accordance with Section 6(b), the
Pledgor shall deliver to the Collateral Agent an Officer's Certificate and/or
an Opinion of Counsel in accordance with the requirements of Sections 11.03 and
11.04 of the Indenture.
18.3 No Adverse Interpretation of Other Agreements. This Agreement may not
be used to interpret another pledge, security or debt agreement of the Pledgor,
IPL or any subsidiary thereof. No such pledge, security or debt agreement may
be used to interpret this Agreement (other than as specifically provided
herein).
18.4 Severability. The provisions of this Agreement are severable, and if
any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
in that jurisdiction only such clause or provision, or part thereof, and shall
not in any manner affect such clause or provision in any other jurisdiction or
any other clause or provision of this Agreement in any jurisdiction.
18.5 No Recourse Against Others. No director, officer, employee,
stockholder or affiliate, as such, of the Pledgor shall have any liability for
any obligations of the Pledgor under this Agreement or for any claim based on,
in respect of or by reason of such obligations or their creation. Each Secured
Party, by its acceptance of the benefits of this Agreement, waives and releases
all such liability. The waiver and release are part of the consideration for
the issue of the Senior Notes and for the grant of the security interest in the
Collateral to the Secured Parties.
18.6 Headings. The headings of the Articles and Sections of this Agreement
have been inserted for convenience of reference only, are not to be considered
a part hereof and shall in no way modify or restrict any of the terms or
provisions hereof.
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18.7 Counterpart Originals. This Agreement may be signed in two or more
counterparts. Each signed copy shall be an original, but all of them together
represent one and the same agreement. Each counterpart may be executed and
delivered by telecopy, if such delivery is promptly followed by the original
manually signed copy sent by overnight courier.
18.8 Benefits of Agreement. Nothing in this Agreement, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, and the Secured Parties, any benefit or any legal or equitable
right, remedy or claim under this Agreement.
18.9 Amendments, Waivers and Consents. Any amendment or waiver of any
provision of this Agreement and any consent to any departure by the Pledgor
from any provision of this Agreement shall be effective only if made or given
in compliance with all of the terms and provisions of the Indenture and the
Additional Debt Documents necessary for amendments or waivers of, or consents
to any departure by the Pledgor from any provision of the Indenture or any
Additional Debt Document, as the case may be, and only if such amendment,
waiver or consent is in writing duly signed by the Pledgor and the Collateral
Agent (with the written consent of the Majority Holders, unless such consent
would not be required under the Indenture); provided, however, that any change,
waiver, modification or variance materially adversely affecting the rights and
benefits of a single Class (as defined below) of Secured Parties (and not all
Secured Parties in a like or similar manner) shall also require the written
consent of the Requisite Holders (as defined below) of such affected Class;
provided, further, that any Class shall not be considered to be affected
differently from any other Class due to the Obligations of any such other Class
being paid, repaid, refinanced, renewed or extended and the Collateral being
released, in whole or in part (whether by action of such other Class or
otherwise), as security for a particular Class. For the purpose of this
Agreement, the term "Class" shall mean, at any time, each class of Secured
Parties with outstanding Obligations secured hereby at such time, i.e., (x) the
holders of the Senior Notes secured hereby and (y) any other class of
Additional Secured Debt secured hereby; provided that, without limiting the
foregoing, it is expressly acknowledged and agreed that other creditors may be
added as "Secured Parties" hereunder (either as part of an existing Class of
creditors or as a newly created Class), and that such addition shall not
require the written consent of the Requisite Holders of the various Classes.
For the purpose of this Agreement, the term "Requisite Holders" of any Class
shall mean each of (i) with respect to the Senior Notes, the holders of at
least a majority of the outstanding principal amount of the Senior Notes and
(ii) with respect to any other class of Additional Secured Debt, the holders of
at least a majority of such class of Additional Secured Debt outstanding from
time to time.
Failure of the Collateral Agent or any Secured Party to exercise, or delay
in exercising, any right, power or privilege hereunder shall not operate as a
waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy that the Collateral Agent or the Secured Parties would otherwise have on
any future occasion. The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.
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18.10 Interpretation of Agreement. Time is of the essence in each
provision of this Agreement of which time is an element. All terms not defined
herein or in the Indenture shall have the meaning set forth in the applicable
UCC, except where the context otherwise requires. To the extent a term or
provision of this Agreement conflicts with the Indenture and is not dealt with
herein with more specificity, the Indenture shall control with respect to the
subject matter of such term or provision.
18.11 Continuing Security Interest; Transfer of Securities. This Agreement
shall create a continuing security interest in the Collateral and shall (i)
remain in full force and effect until the payment in full of all the
Obligations of the Pledgor and all the fees and expenses owing to the
Collateral Agent, (ii) be binding upon the Pledgor, its successors and assigns,
provided that the Pledgor may not assign, transfer or delegate any of its
rights or obligations under this Agreement without the prior written consent of
the Collateral Agent and (iii) inure, together with the rights and remedies of
the Collateral Agent hereunder, to the benefit of the Collateral Agent, the
Secured Parties and their respective successors, transferees and assigns.
18.12 Reinstatement. This Agreement shall continue to be effective or be
reinstated if at any time any amount received by the Collateral Agent or any
Secured Party in respect of the Obligations is rescinded or must otherwise be
restored or returned by the Collateral Agent or any Secured Party upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Pledgor or upon the appointment of any receiver, intervenor, conservator,
trustee or similar official for the Pledgor or any substantial part of its
assets, or otherwise, all as though such payments had not been made.
18.13 Survival of Provisions. All representations, warranties and
covenants of the Pledgor contained herein shall survive the execution and
delivery of this Agreement (including the Pledgor's obligations under Section
14 hereof), and shall terminate only upon the full and final payment and
performance by the Pledgor of the Obligations of the Pledgor.
18.14 Waivers. The Pledgor waives presentment and demand for payment of
any of the Obligations, protest and notice of dishonor or default with respect
to any of the Obligations, and all other notices to which the Pledgor might
otherwise be entitled, except as otherwise expressly provided herein or in the
Indenture.
18.15 Authority of the Collateral Agent.
(a) The Collateral Agent shall have and be entitled to exercise all powers
hereunder that are specifically granted to the Collateral Agent by the terms
hereof, together with such powers as are reasonably incident thereto. The
Collateral Agent may perform any of its duties hereunder or in connection with
the Collateral by or through agents or employees and shall be entitled to
retain counsel of its choice and to act in reliance upon the advice of counsel
concerning all such matters. Neither the Collateral Agent nor any director,
officer, employee, attorney or agent of the Collateral Agent shall be
responsible for the validity, effectiveness or sufficiency hereof or of any
document or security furnished pursuant hereto. The Collateral Agent and its
directors, officers, employees, attorneys and agents shall be entitled to rely
on any communication, instrument or document believed by it or them to be
genuine and correct and to have been signed or sent by the proper person or
persons. To the maximum extent permitted by
20
applicable law, the Pledgor waives all claims, damages, and demands against the
Collateral Agent arising out of the repossession, retention, or sale of the
Collateral pursuant to the written instruction of the Majority Holders as
provided herein, except such which may be found by a final and nonappealable
decision of a court of competent jurisdiction to arise out of the gross
negligence or willful misconduct of the Collateral Agent. Upon the occurrence
and during the continuance of an Event of Default, until the Collateral Agent
is able to effect a sale, lease, or other disposition of the Collateral, the
Collateral Agent shall have the right, subject to the receipt of any necessary
regulatory approval, to use or operate the Collateral, or any part thereof, to
the extent that it deems appropriate for the purpose of preserving the
Collateral or its value or for any other purpose deemed appropriate by the
Collateral Agent. The Collateral Agent shall have no obligation to maintain or
preserve the rights of the Pledgor as against third parties with respect to the
Collateral while the Collateral is in the possession of the Collateral Agent.
The Collateral Agent shall use reasonable care with respect to the Collateral
in its possession or under its control. The Collateral Agent shall not have any
other duty as to the Collateral in its possession or control or in the
possession or control of any agent or nominee of the Collateral Agent, or any
income thereon or as to the preservation of rights against prior parties or any
other rights pertaining thereto. Upon request of the Pledgor, the Collateral
Agent shall account for any monies received by the Collateral Agent in respect
of any foreclosure on or disposition of the Collateral. The provisions of
Sections 7.01 and 7.03of the Indenture shall apply to the Collateral Agent
under this Agreement with the same force as they apply to the Trustee under the
Indenture.
(b) The Pledgor acknowledges that the rights and responsibilities of the
Collateral Agent under this Agreement with respect to any action taken by the
Collateral Agent or the exercise or non-exercise by the Collateral Agent of any
option, right, request, judgment or other right or remedy provided for herein
or resulting or arising out of this Agreement shall, as among the Collateral
Agent and the Secured Parties, be governed by this Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Collateral Agent and the Pledgor, the Collateral Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and the Pledgor shall not
be obligated or entitled to make any inquiry respecting such authority.
18.16 Resignation or Removal of the Collateral Agent. Until such time as
the Obligations shall have been paid in full, the Collateral Agent may at any
time, by giving written notice to the Pledgor, the Trustee and any Additional
Secured Debt Agent or Additional Debtholder, as applicable, resign and be
discharged of the responsibilities hereby created, such resignation to become
effective upon (i) the appointment of a successor Collateral Agent and (ii) the
acceptance of such appointment by such successor Collateral Agent. As promptly
as practicable after the giving of any such notice, the Majority Holders shall
appoint a successor Collateral Agent, which successor Collateral Agent shall be
reasonably acceptable to the Pledgor. If no successor Collateral Agent shall be
appointed and shall have accepted such appointment within 60 days after the
Collateral Agent gives the aforesaid notice of resignation, the Collateral
Agent may apply, at the expense of the Pledgor, to any court of competent
jurisdiction to appoint a successor Collateral Agent to act until such time, if
any, as a successor shall have been appointed as provided in this Section
18.16. Any successor so appointed by such court shall immediately and without
further act be superseded by any successor Collateral Agent
21
appointed by the Majority Holders as provided in this Section 18.16.
Simultaneously with its replacement as Collateral Agent hereunder, the
Collateral Agent so replaced shall deliver to its successor all documents,
instruments, certificates and other items of whatever kind (including, without
limitation, the certificates and instruments evidencing the Collateral and all
instruments of transfer or assignment) held by it pursuant to the terms hereof.
The Collateral Agent that has resigned shall be entitled to fees, costs and
expenses to the extent incurred or arising, or relating to events occurring,
before its resignation or removal.
18.17 Pledge Agreement Supplement. In connection with the incurrence by
the Pledgor from time to time of any class of Additional Secured Debt, the
Pledgor agrees to enter into a Pledge Agreement Supplement, which shall form a
part of this Agreement, and shall by its terms cause such Additional Debt
Obligations to be secured by a security interest in the Collateral on an equal
and ratable basis with the Obligations secured hereunder. Upon the
effectiveness of any Pledge Agreement Supplement, Schedule I hereto shall be
deemed to be amended to include such Additional Secured Debt identified in such
Pledge Agreement Supplement.
18.18 Termination of Agreement. Subject to the provisions of Section 18.12
hereof, this Agreement shall terminate upon full and final payment and
performance of the Obligations of the Pledgor (and upon receipt by the
Collateral Agent of the Pledgor's written certification that all such
Obligations have been satisfied). At such time, the Collateral Agent shall, at
the request of the Pledgor, reassign and redeliver to the Pledgor all of the
Collateral hereunder that has not been sold, disposed of, retained or applied
by the Collateral Agent in accordance with the terms hereof. Such reassignment
and redeliver shall be without warranty by or recourse to the Collateral Agent,
except as to the absence of any prior assignments by the Collateral Agent of
its interest in the Collateral and except to the extent of any breach by the
Collateral Agent of its obligations hereunder (including, without limitation,
its obligations under Section 10), and shall be at the expense of the Pledgor.
18.19 Final Expression. This Agreement, together with any other agreement
executed in connection herewith, is intended by the parties as a final
expression of their Agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.
18.20 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL;
WAIVER OF DAMAGES.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
(b) THE PLEDGOR AGREES THAT THE COLLATERAL AGENT SHALL, IN ITS OWN NAME OR
IN THE NAME AND ON BEHALF OF ANY SECURED PARTY, HAVE THE RIGHT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE PLEDGOR OR THE PLEDGOR'S
PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH TO ENABLE
THE COLLATERAL AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER ENTERED IN FAVOR OF THE COLLATERAL
22
AGENT. THE PLEDGOR AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS
IN ANY PROCEEDING BROUGHT BY THE COLLATERAL AGENT TO REALIZE ON SUCH PROPERTY,
OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE COLLATERAL AGENT.
THE PLEDGOR WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
IN WHICH THE COLLATERAL AGENT HAS COMMENCED A PROCEEDING DESCRIBED IN THIS
PARAGRAPH INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS.
(c) THE PLEDGOR AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE
PLEDGOR AT ITS ADDRESS REFERRED TO IN SECTION 18.1 OR AT SUCH OTHER ADDRESS OF
WHICH THE COLLATERAL AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO. THE
PLEDGOR AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO XXX IN
ANY OTHER JURISDICTION.
(d) THE PLEDGOR, THE COLLATERAL AGENT AND THE SECURED PARTIES WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN A BENCH
TRIAL WITHOUT A JURY.
(e) THE PLEDGOR HEREBY AGREES THAT NEITHER THE COLLATERAL AGENT NOR ANY
SECURED PARTY SHALL HAVE ANY LIABILITY TO THE PLEDGOR (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE PLEDGOR IN CONNECTION
WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THE TRANSACTIONS CONTEMPLATED
AND THE RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR ANY ACT, OMISSION OR
EVENT OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS DETERMINED BY A FINAL AND
NONAPPEALABLE JUDGMENT OF A COURT THAT IS BINDING ON THE COLLATERAL AGENT OR
SUCH SECURED PARTY, AS THE CASE MAY BE, THAT SUCH LOSSES WERE THE RESULT OF
ACTS OR OMISSIONS ON THE PART OF THE COLLATERAL AGENT OR SUCH SECURED PARTY, AS
THE CASE MAY BE, CONSTITUTING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(f) THE PLEDGOR WAIVES ALL RIGHTS OF NOTICE AND HEARING OF ANY KIND PRIOR
TO THE EXERCISE BY THE COLLATERAL AGENT OR ANY HOLDER OF ITS RIGHTS DURING THE
CONTINUANCE OF A DEFAULT OR AN EVENT OF DEFAULT TO REPOSSESS THE COLLATERAL
WITH JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL OR
OTHER SECURITY FOR THE OBLIGATIONS. THE PLEDGOR WAIVES THE POSTING OF ANY
23
BOND OTHERWISE REQUIRED OF THE COLLATERAL AGENT OR ANY SECURED PARTY IN
CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO OBTAIN POSSESSION OF,
REPLEVY, ATTACH OR LEVY UPON COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS,
TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE COLLATERAL
AGENT OR ANY SECURED PARTY, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY
RESTRAINING ORDER OR PRELIMINARY OR PERMANENT INJUNCTION THIS AGREEMENT OR ANY
OTHER AGREEMENT OR DOCUMENT AMONG THE PLEDGOR, THE COLLATERAL AGENT AND THE
SECURED PARTIES. THE PLEDGOR WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY
LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR
PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.
18.21 Acknowledgments. The Pledgor hereby acknowledges that it has been
advised by counsel in the negotiation, execution and delivery of this
Agreement.
IN WITNESS WHEREOF, the Pledgor and the Collateral Agent have each caused
this Agreement to be duly executed and delivered as of the date first above
written.
IPALCO ENTERPRISES, INC.
By: /s/ Xxxxxxx Xxx
------------------------------
Name: Xxxxxxx Xxx
Title: Chief Executive Officer
BANK ONE, NATIONAL ASSOCIATION, as
Collateral Agent
By: /s/ Xxxxx Xxx
------------------------------
Name: Xxxxx Xxx
Title: Authorized Officer
Accepted and acknowledged as of
the date first above written:
BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Trustee under the Indenture
By: /s/ Xxxxx Xxx
-----------------------------------
Name: Xxxxx Xxx
Title: Authorized Officer
SCHEDULE I
ADDITIONAL SECURED DEBT
Title or Name of Secured
Additional Secured Debt: Additional Debt Holders: Additional Debt Agent:
------------------------- ------------------------ ----------------------
[NONE]
SCHEDULE II
PLEDGED SHARES OF IPL
Percent of Class of
Stock Stock Certificate Number Number of Shares Shares Outstanding
------ ------------------------ ---------------- ------------------
common 1 17,206,630 100%
SCHEDULE III
If to Pledgor:
IPALCO Enterprises, Inc.
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Director, Financial Services
If to the Collateral Agent or the Trustee:
Bank One, National Association
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: ________________
If to any Additional Secured Debt Agent:
See Schedule I hereto
ANNEX A
[Form of Pledge Agreement Supplement]
PLEDGE AGREEMENT SUPPLEMENT dated ______________,____, (this "Supplement")
made by IPALCO Enterprises, Inc., an Indiana corporation (the "Pledgor"), in
favor of Bank One, National Association, a [_________] banking corporation, as
collateral agent (in such capacity, the "Collateral Agent") for the benefit of
the Secured Parties (as defined in the Pledge Agreement referred to below).
1. This Supplement is executed and delivered pursuant to the terms of the
Pledge Agreement, dated as of November 14, 2001 (as supplemented by this
Supplement and as the same has been and may hereafter be supplemented by any
other Pledge Agreement Supplement or otherwise amended or modified, the "Pledge
Agreement"), made by the Pledgor in favor of the Collateral Agent for the
benefit of the Collateral Agent and the Secured Parties. Terms defined in the
Pledge Agreement are used herein with their defined meanings.
2. Pursuant to the terms of the Indenture and the Pledge Agreement, the
Pledgor may incur additional secured indebtedness from time to time that is by
its terms equally and ratably secured under the Pledge Agreement with the
Obligations secured thereunder. The Pledgor and [Additional Secured Debt
Agent/Additional Secured Party], have entered into that certain [name of
additional debt agreement], dated as of ___________, ____, pursuant to which
the Pledgor shall [insert description of additional debt]. The terms of the
[additional debt agreement] require that the Pledgor equally and ratably secure
its obligations under [such additional debt] with the Obligations secured under
the Pledge Agreement. The Pledgor hereby acknowledges and agrees that its
obligations under [such additional debt] shall be deemed to be "Additional Debt
Obligations" pursuant to the Pledge Agreement.
3. The Pledgor confirms and reaffirms the security interest in the
Collateral granted to the Collateral Agent, for the benefit of the Collateral
Agent and the Secured Parties under the Pledge Agreement; and hereby
acknowledges and agrees that all references to "Secured Parties" in the Pledge
Agreement shall be deemed to include all holders of the Additional Secured Debt
as described on Schedule 1 hereto.
4. The Pledgor hereby represents and warrants that the representations and
warranties contained in Section 4 of the Pledge Agreement are true and correct
on the date of this Supplement with all references therein and elsewhere in the
Pledge Agreement to "Additional Secured Debt", "Additional Debtholders" and, if
applicable, "Additional Secured Debt Agent" to include the Additional Debt,
Additional Debtholders and, if applicable, Additional Secured Debt Agent as
listed on Schedule 1 hereto and on Schedule 1 to each Pledge Agreement
Supplement executed prior to the date hereof and with references therein to
"this Pledge Agreement" to mean the Pledge Agreement as supplemented hereby. In
addition, the Pledgor represents and warrants that this Supplement has been
duly executed and delivered by the Pledgor and constitutes a legal, valid and
binding obligation of the Pledgor enforceable against the Pledgor in accordance
with its terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization,
A-2
fraudulent conveyance, moratorium or similar laws affecting the
enforcement of creditors' rights and remedies generally and by equitable
principles of general applicability.
5. The Additional Debtholders designated on Schedule 1 hereto, by their
acceptance of the benefits of the Pledge Agreement, hereby irrevocably
designate the Collateral Agent to act on their behalf as specified in the
Pledge Agreement. Each such Additional Debtholder hereby irrevocably
authorizes, and each holder of the Additional Debt Obligations by the
acceptance of such Additional Debt Obligation and by the acceptance of the
benefits of the Pledge Agreement shall be deemed irrevocably to authorize the
Collateral Agent to take such action on its behalf under the Pledge Agreement
and instruments and agreements referred to therein and to exercise such powers
and to perform such duties thereunder as are specifically delegated or required
of the Collateral Agent by the terms thereof and such other powers as are
reasonably incident thereto.
6. This Supplement is supplemental to the Pledge Agreement, forms a part
thereof and is subject to all the terms thereof. Schedule I to the Pledge
Agreement does, and shall be deemed to, include each item listed on Schedule 1
hereto, and each such item shall be and is included within the meaning of the
terms "Additional Secured Debt", "Additional Debtholders" and, if applicable,
"Additional Secured Debt Agent" as such terms are used in the Pledge Agreement.
IN WITNESS WHEREOF, the Pledgor has caused this Supplement to be duly
executed and delivered on the date first set forth above.
IPALCO ENTERPRISES, INC.
By:
--------------------------------
Name:
Title: President
Acknowledged and agreed:
BANK ONE, NATIONAL ASSOCIATION,
as Collateral Agent
By:
---------------------------
Name:
Title:
[Additional Secured Debt Agent] [Additional Debtholder]
By:
---------------------------
Name:
Title:
