Exhibit 4.6
EXECUTION COPY
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EQUITY SUBSCRIPTION AGREEMENT
Dated as of
June 1, 1999
among
AES IRONWOOD, L.L.C.,
AES IRONWOOD, INC.,
and
IBJ WHITEHALL BANK & TRUST COMPANY,
as Collateral Agent
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705 MW (Net) Gas-Fired Combined Cycle Electric Generating Facility
South Lebanon Township, Lebanon County, Pennsylvania
TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS.............................................1
SECTION 2. EQUITY CONTRIBUTIONS....................................3
SECTION 3. NOTIFICATION OF SECURITY INTEREST.......................5
SECTION 4. REPRESENTATIONS AND WARRANTIES..........................5
SECTION 5. COVENANTS...............................................6
SECTION 6. ADDITIONAL COVENANTS OF AESI............................6
SECTION 7. EVENTS OF DEFAULT.......................................8
SECTION 8. TRANSFERS OF INTEREST IN THE COMPANY....................8
SECTION 9. OBLIGATIONS ABSOLUTE, ETC...............................8
SECTION 10. WAIVER.................................................10
SECTION 11. SUPPORT INSTRUMENTS....................................10
SECTION 12. RESCISSION OF PAYMENT..................................12
SECTION 13. SEPARATE UNDERTAKINGS..................................12
SECTION 14. NOTICES................................................13
SECTION 15. SUCCESSORS AND ASSIGNS.................................14
SECTION 16. AMENDMENT, ETC.........................................14
SECTION 17. REMEDIES...............................................14
SECTION 18. HEADINGS...............................................14
SECTION 19. GOVERNING LAW..........................................15
SECTION 20. CONSENT TO JURISDICTION................................15
SECTION 21. WAIVER OF JURY TRIAL...................................15
SECTION 22. EXPENSES...............................................15
SECTION 23. COUNTERPARTS...........................................15
SECTION 24. SEVERABILITY...........................................15
SECTION 25. TERMINATION............................................16
EXHIBIT A FORM OF ACCEPTABLE LETTER OF CREDIT
EXHIBIT B FORM OF ACCEPTABLE BOND
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EQUITY SUBSCRIPTION AGREEMENT (this "Agreement"), dated as of June 1,
1999, made by and among AES IRONWOOD, L.L.C., a Delaware limited liability
company (the "Company"), AES IRONWOOD, INC., a Delaware corporation ("AESI") and
IBJ WHITEHALL BANK & TRUST COMPANY, in its capacity as Collateral Agent under
the Collateral Agency Agreement referred to below (together with its successors
and assigns, the "Collateral Agent"). (Each of the Company, AESI and the
Collateral Agent, a "Party" and collectively, the "Parties").
RECITALS
AESI owns 100% of the membership interests of the Company.
The Company will issue certain Senior Secured Bonds in one or more
series pursuant to the Trust Indenture dated as of the date hereof (as amended,
restated, supplemented or otherwise modified, the "Indenture") among the
Company, IBJ Whitehall Bank & Trust Company, as Trustee (together with its
successors in such capacity, the "Trustee") and IBJ Whitehall Bank & Trust
Company, as Depositary Bank, in the aggregate principal amount of $308,500,000
(the "Bonds"), the proceeds of which will be used (i) to pay costs incurred in
connection with the development, construction, startup and testing of the
Facility and (ii) to pay certain transaction costs incurred in connection with
the issuance of the Bonds.
The Company, the Collateral Agent, the Trustee, the DSR Letter of
Credit Provider and the CP Letter of Credit Provider have entered into the
Collateral Agency and Intercreditor Agreement, dated as of even date herewith
(as the same may be amended, supplemented or otherwise modified from time to
time, the "Collateral Agency Agreement"), pursuant to which the Collateral Agent
has been appointed to act as Collateral Agent and representative for the Senior
Parties in connection with, among other things, the matters referred to herein.
In order to ensure the making of certain equity contributions that may
become due under the Collateral Agency Agreement, the Collateral Agent, solely
on behalf of the Senior Secured Parties, requires commitments from AESI to
contribute capital to the Company on the terms and conditions, and for the
purposes, provided herein.
It is a condition precedent to the obligation of Xxxxxx Brothers Inc.,
Xxxxxx Xxxxxxx & Co. Incorporated and Dresdner Kleinwort Xxxxxx North America
LLC (the "Initial Purchasers") to purchase and pay for the Bonds pursuant to the
Bond Purchase Agreement (the "Purchase Agreement") dated as of June 18, 1999,
between the Company and Xxxxxx Brothers on behalf of the Initial Purchasers,
that the parties hereto enter into this Agreement.
THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions.
(a) All capitalized terms used in this Agreement shall have the
meanings ascribed
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thereto in the Indenture. As used and not defined herein, the following
additional terms shall have the following meanings:
"Acceptable Letter of Credit" means an irrevocable letter of credit or
letters of credit in the form of Exhibit A or otherwise in form and substance
satisfactory to the Collateral Agent in its reasonable judgment, issued for the
benefit of the Collateral Agent and for the account of AESI or an Affiliate
other than the Company, in the stated amount of $50,149,285.00, by a domestic or
foreign commercial bank whose outstanding senior unsecured long-term debt is
rated at least A or the equivalent by S&P and Moody's.
"Acceptable Bond" means a bond or bonds, issued by a domestic or
foreign insurance company whose outstanding senior unsecured long-term debt is
rated at least "A" by Standard & Poor's and "A2" by Moody's issued for the
benefit of the Collateral Agent in the aggregate initial stated amount of
$50,149,285.00, and in the form attached hereto as Exhibit B or otherwise in
form and substance satisfactory to the Collateral Agent in its reasonable
judgment and as to which the Company shall have no obligations to the insurance
company or its Affiliates.
"AESI Event of Default" has the meaning given such term in Section 7.
"AESI Support Account" has the meaning set forth in Section 11(d) of
this Agreement.
"AESI Support Amount" means, as of any date, $50,149,285.00 reduced by
the sum of all Equity Contributions made prior to such date.
"AESI Support Instrument" means (i) an Acceptable Letter of Credit,
(ii) an Acceptable Bond, or (iii) a Substitute Support Instrument.
"Bond Payment Account" shall mean the Account of such name created
pursuant to Section 4.1 of the Indenture.
"Cash Deposit" means a cash deposit to a AESI Support Account in an
amount equal to all or a portion of the AESI Support Amount.
"Commercial Operation Date" has the meaning given such term in the
Power Purchase Agreement.
"Construction Account" shall mean the account of such name created
pursuant to Section 3.1 of the Collateral Agency Agreement.
"Construction Interest Account" shall mean the Account of such name
created pursuant to Section 4.1 of the Indenture.
"Downgrade Event" has the meaning given such term in Section 11(f).
"Equity Contribution" has the meaning given such term in Section 2(a).
"Equity Contribution Commitment" shall mean $50,149,285.00.
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"Equity Contribution Date" shall mean any date on which AESI is
required to contribute equity to the Construction Account pursuant to the terms
of this Agreement.
"Final Acceptance" shall have the meaning given such term in the EPC
Contract.
"Final Acceptance Date" shall mean the later of (i) the Commercial
Operation Date and (ii) the date on which Final Acceptance is achieved (or is
deemed to have been achieved) pursuant to Section 6.5 of the EPC Contract.
"IC Downgrade Event" has the meaning given such term in Section 11(g).
"Moody's" shall mean Xxxxx'x Investors Service, Inc., a Delaware
corporation.
"Remaining Required Equity Contribution" shall mean the amount required
as of the Final Acceptance Date to pay Project Costs and principal, if any, on
the Bonds less the aggregate of the amounts then on deposit in or credited to
the Construction Account, the Construction Interest Account and the Bond Payment
Account.
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities" shall mean any shares, stock, bonds, debentures, notes,
evidences of indebtedness or any other instruments commonly known as
"securities".
"S&P" shall mean Standard & Poor's Ratings Group, a New York
corporation.
"Substitute Support Instrument" means (i) an Acceptable Letter of
Credit, (ii) a Cash Deposit with Support Account Documentation as set forth in
Section 11(d), or (iii) an Acceptable Bond.
"Support Account Documentation" has the meaning set forth in Section
11(d) of this Agreement.
(b) All references to Persons herein shall include their permitted
successors and assigns.
SECTION 2. Equity Contributions.
AESI shall make or cause to be made to the Company cash equity
contributions or loans pursuant to an Affiliate Subordinated Loan Agreement
between AESI, and/or an Affiliate of AESI, and the Company (each an "Equity
Contribution") by depositing such Equity Contributions in the Construction
Account in accordance with the following terms and conditions; provided,
however, that the aggregate amount of such Equity Contributions shall not at any
time exceed the Equity Contribution Commitment:
(a) Commencing on the Closing Date to and including the Final
Acceptance Date, the Collateral Agent shall notify AESI on the Business Day
immediately following any date on which (i) the aggregate amount then required
to pay Project Costs in accordance with Section 3.8
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of the Collateral Agency Agreement is greater than (ii) the aggregate amount of
the available amounts then on deposit in or credited to the Construction
Account, the Interest Payment Subaccount of the Bond Payment Account and the
Construction Interest Subaccount (such difference, the "Shortfall Amount"). On
the second Business Day immediately following the Collateral Agent's notice,
AESI shall make an Equity Contribution to the Construction Account in an amount
equal to the lesser of (i) such Shortfall Amount as specified in such notice
from the Collateral Agent or (ii) the then current unutilized Equity
Contribution Commitment. On the Final Acceptance Date, AESI shall make an Equity
Contribution to the Construction Account in an amount equal to the then current
unutilized Equity Contribution Commitment, provided that the amount required to
be contributed pursuant to this sentence shall be reduced to the Remaining
Required Equity Contribution if the Company delivers an Officer's Certificate to
the Collateral Agent on the Final Acceptance Date certifying that:
(A) all other amounts due and payable under this Agreement
have been paid as required under this Agreement on and as of the Final
Acceptance Date;
(B) Final Acceptance has occurred;
(C) the Commercial Operation Date has occurred;
(D) no Default or Event of Default under the Indenture or any
other Financing Document has occurred and is continuing on and as of
the Final Acceptance Date; and
(E) all Accounts are fully funded on and as of the Final
Acceptance Date to the extent required under the Collateral Agency
Agreement.
(b) Upon the occurrence of any Event of Default under the Indenture or
an AESI Event of Default on or prior to the Final Acceptance Date, AESI shall
immediately make an Equity Contribution to the Construction Account in an amount
equal to the then current unutilized Equity Contribution Commitment. Any Equity
Contribution made pursuant to this clause (b) shall be applied in accordance
with Section 3.8 of the Collateral Agency Agreement.
(c) As security for its obligations under Section 2(a) and Section
2(b), AESI shall provide to the Collateral Agent, on the Closing Date, one or
more AESI Support Instruments in the aggregate amount of the AESI Support
Amount. In the event that AESI shall fail to make any Equity Contribution when
due in accordance with Section 2(a) or Section 2(b), the Collateral Agent shall
promptly make a drawing on an AESI Support Instrument or AESI Support
Instruments in the amount of such Equity Contribution required to be made by
AESI and not paid under Section 2(a) or Section 2(b); provided that the
Collateral Agent's failure to make such demand for payment shall not relieve
AESI of its obligations under this Agreement, including but not limited to its
obligations under Section 2(a) and Section 2(b). Any proceeds of a drawing on an
AESI Support Instrument received by the Collateral Agent shall be applied to,
and in satisfaction of, AESI's obligations under this Agreement. In the event
that AESI has provided two or more AESI Support Instruments in fulfillment of
its obligations under this Section 2(c), drawings made by the Collateral Agent
pursuant to the first sentence of this Section 2(c) shall be made by drawings on
one of such AESI Support Instruments until the earlier of (i) such time as
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all amounts available under such AESI Support Instrument have been drawn and
(ii) such time as the provider of such AESI Support Instrument fails to make
payment in accordance with the terms of such AESI Support Instrument, and then,
subject to the same conditions, by drawings on the other AESI Support Instrument
or AESI Support Instruments in turn.
(d) Any amount which is not paid when due pursuant to this Section 2
shall bear interest at a rate per annum equal to two percent (2%) plus the
interest rate on the Bonds until paid in full.
(e) AESI agrees that, unless otherwise instructed by the Collateral
Agent following an Event of Default, it shall make all payments required to be
made by it in immediately available funds directly to the Collateral Agent for
the benefit of the Company, and such amounts shall be applied as provided in the
Collateral Agency Agreement.
SECTION 3. Notification of Security Interest.
In order to perfect the security interest of the Collateral Agent in
the Collateral in accordance with Section 9-103 of the Uniform Commercial Code
of the State of New York, Company hereby notifies AESI of the existence of such
security interest and AESI hereby acknowledges the receipt and sufficiency of
such notice.
SECTION 4. Representations and Warranties.
AESI represents and warrants to the Collateral Agent that:
(a) Organization and Qualification. It (i) is a corporation, duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with full right, power and authority under
its corporate charter and by-laws and under the laws of the state of its
incorporation to enter into this Agreement, to perform its obligations hereunder
and to consummate the transactions contemplated hereby, (ii) is duly qualified
to do business and in good standing in each other jurisdiction where the
character of its properties or the nature of its activities makes such
qualification necessary, except where the failure to so qualify or be authorized
would not materially and adversely affect its ability to perform its obligations
hereunder, and, (iii) has the corporate power to carry on its business as now
being conducted and as proposed to be conducted.
(b) Authorization and Enforceability. It has taken all necessary
corporate action to authorize the transactions contemplated by this Agreement.
This Agreement has been duly executed and delivered by it and constitutes its
legal, valid and binding obligation enforceable in accordance with its terms,
except as the enforceability thereof may be limited by (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance or other similar laws
affecting the enforcement of creditors' rights generally and (ii) general
equitable principles regardless of whether the issue of enforceability is
considered in a proceeding in equity or at law.
(c) No Conflict. Neither the execution and delivery of this Agreement
nor compliance with any of the terms and provisions hereof (i) contravenes any
Applicable Law or
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Governmental Approval applicable to it or any of its respective properties or
other assets, (ii) conflicts with, breaches or contravenes the provisions of its
corporate charter or by-laws or any contractual obligation applicable to it, or
(iii) results in the creation or imposition of any Lien upon any of its property
or assets under, or in a condition or event that constitutes (or that, upon
notice or lapse of time or both, would constitute) an event of default under,
any of its contractual obligations.
(d) Governmental Approvals. No Governmental Approval is required to
authorize, or is required in connection with, its execution, delivery and
performance of this Agreement or the taking of any action by it contemplated
hereby.
(e) Litigation. There are no actions, suits or proceedings at law or in
equity by or before any Governmental Authority now pending or, to the best of
its knowledge, threatened against or affecting it or any of its properties or
rights which could materially and adversely affect its right or ability to
fulfill its obligations hereunder, or which questions or challenges the validity
of this Agreement or any action taken or to be taken by it pursuant to this
Agreement or in connection with the transactions contemplated hereby.
SECTION 5. Covenants.
So long as any obligation of AESI under this Agreement is outstanding,
AESI covenants and agrees with the Collateral Agent, as follows:
(a) Corporate Existence. It shall (i) preserve and maintain its legal
existence, (ii) preserve and maintain all of its rights, privileges and
franchises, if any, necessary for the operation of its business and the
maintenance of its existence, and (iii) comply in all material respects with all
Applicable Laws, where in the case of clause (ii) and (iii) any failure to
comply would reasonably be expected to have a material adverse effect on its
ability to comply with its obligations under this Agreement.
(b) Reporting Requirements. It shall furnish (i) written notice of any
AESI Event of Default, specifically stating that an AESI Event of Default has
occurred and describing such AESI Event of Default and any action being taken
with respect to such AESI Event of Default, and (ii) notice of the occurrence of
a Material Adverse Change with respect to it.
(c) Other Activities. It shall not amend the Company's certificate of
formation or limited liability company agreement in a manner that would
reasonably be expected to result in a Material Adverse Effect or take any action
which might result in the dissolution of the Company.
SECTION 6. Additional Covenants of AESI.
(a) So long as any of its obligations under this Agreement is
outstanding and it is a party to this Agreement, AESI covenants and agrees with
the Collateral Agent that it shall not enter into any transaction of merger or
consolidation, or change its form of organization or its business or liquidate
or dissolve itself (or suffer any liquidation or dissolution) or transfer all or
substantially all of its assets other than to an Affiliate in accordance with
Section 8 below.
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(b) Notwithstanding any other provision in AESI's Certificate of
Incorporation and any other provision of law to the contrary, until such time as
the Bonds shall be indefeasibly paid in full and all liens and security
interests securing such indebtedness shall be indefeasibly released and
discharged, AESI at all times shall:
(i) maintain its books, records and bank accounts separate and
apart from those of all other Persons;
(ii) not commingle any of its assets with those of any other
Person;
(iii) pay the salaries of its own employees, if any, and maintain a
sufficient number of employees in light of its contemplated
business operations
(iv) pay its own liabilities out of its own funds;
(v) maintain financial statements separate and apart from those of
all other Persons;
(vi) observe all corporate formalities, organizational formalities
and other applicable or customary formalities;
(vii) not guarantee or become obligated for the debts of any other
Person or hold out its credit as being available to satisfy
the obligations of any other Person;
(viii) not pledge its assets for the benefit of any other Person or
make any loans or advances to any other Person;
(ix) not acquire the direct obligations of, or securities issued
by, its shareholders or any Affiliate;
(x) allocate fairly and reasonably any overhead for expenses that
are shared with an Affiliate, including paying for the office
space and services performed by any employee of any Affiliate;
(xi) use stationery, invoices and checks bearing its own name;
(xii) conduct business in its own name, promptly correct any known
misunderstandings regarding its separate identity, and not
identify itself as a division of any other Person;
(xiii) maintain adequate capital in light of its contemplated
business operations;
(xiv) maintain arm's length relationships with all Affiliates and
enter into transactions with Affiliates only on commercial
reasonable bases; and
(xv) not have any employees other than employees necessary to
perform authorized activities.
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SECTION 7. Events of Default.
If any of the following events (each an "AESI Event of Default") shall
occur and be continuing:
(a) AESI shall fail to make or cause to be made any Equity Contribution
when required pursuant to Section 2(a) or Section 2(b) of this Agreement;
(b) A Bankruptcy Event in respect of AESI shall have occurred and be
continuing; or
(c) This Agreement shall at any time for any reason cease to be valid
and binding and in full force and effect or the validity or enforceability
thereof shall be contested by any party thereto or any party thereto (other than
the Collateral Agent) shall deny that it has any liability or obligation under
such Agreement;
then at any time thereafter if an AESI Event of Default shall then be
continuing, the Collateral Agent may, and at the direction of the Required
Senior Parties shall, by notice to the Company, take any or all of the following
actions, without prejudice to the rights of the Collateral Agent to enforce its
claims against the Company, in respect of such AESI Event of Default: (i)
declare all Equity Contributions required under this Agreement to be, whereupon
the same shall become, forthwith due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Company and the AESI and (ii) exercise any other remedies against the Company
and AESI available at law or in equity.
SECTION 8. Transfers of Interest in the Company.
AESI shall not directly or indirectly transfer any of its interest in
the Company if such transfer would result in a Change in Control or would
otherwise conflict with the Indenture; provided, however, AESI may, if such
transfer would not result in a Change in Control and is otherwise in accordance
with the Indenture, transfer its entire interest in the Company to an Affiliate
and be released from all of its obligations under this Agreement so long as (A)
such Affiliate assumes all of AESI's obligations under this Agreement, (B) such
Affiliate provides Substitute Support Instruments satisfactory to the Collateral
Agent and (C) the Parties and any such transferee or transferees enter into
conforming amendments to this Agreement reflecting any applicable transfer,
assumption and release of obligations hereunder.
SECTION 9. Obligations Absolute, Etc.
AESI further covenants and agree as follows:
(a) The obligations of AESI to make, or cause to be made, Equity
Contributions pursuant to Section 2 of this Agreement constitute direct
obligations of AESI to the Collateral Agent, and shall be enforceable by the
Collateral Agent.
(b) The obligations of AESI to make, or cause to be made, Equity
Contributions pursuant to Section 2 hereof are and shall be absolute and
unconditional and are not, and shall
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not be, subject to any defense or right of set-off, counterclaim, deduction,
diminution, abatement, recoupment, defense, suspension, deferment or reduction
or any other legal or equitable defense which such party has or hereafter may
have, against any other Person (including the Company) for any reason whatsoever
(including, without limitation, any circumstance which constitutes, or might be
construed to constitute, an equitable or legal discharge of any or all of the
Company's obligations in bankruptcy or otherwise).
(c) To the extent permitted by Applicable Law, the obligations of AESI
hereunder shall be absolute and unconditional, shall remain in full force and
effect, and shall not be released, discharged or in any way affected,
notwithstanding:
(i) any lack of validity, enforceability or value of any
Financing Documents or any other agreement or instrument relating
thereto or to any collateral therefor;
(ii) any change in the time, manner or place of payment of, or
in any other term of, the Financing Documents or any amendment or
waiver thereof, or any consent to departure from any of those
documents;
(iii) any failure to pay any taxes which may be payable with
respect to the performance of its obligations hereunder by AESI or
failure to obtain any authorization or approval from or other action
by, or to notify or file with, any Governmental Authority required in
connection with the performance of such obligations by AESI;
(iv) any impossibility or impracticality of performance, force
majeure, any act of any government, or other circumstance which might
constitute a defense available to, or a discharge of, AESI, or any
other circumstance, event or happening whatsoever, whether foreseen or
unforeseen and whether similar or dissimilar to anything referred to
above in this Section 9;
(v) any merger or consolidation of the Company or AESI into or
with any other entity, or any sale, lease or transfer of all or any of
the assets of the Company or AESI to any other Person;
(vi) any change in the ownership in the Company; or
(vii) to the fullest extent permitted by law, any other
circumstance which might otherwise constitute a defense available to,
or a discharge of, AESI or the Company.
(d) AESI has no right, and shall have no right, to terminate this
Agreement or to be released, relieved or discharged (other than by full and
strict compliance by it with the terms hereof) from any obligation or liability
hereunder for any reason whatsoever.
(e) The obligations of the AESI hereunder will be performed regardless
of any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of the terms of the Financing Documents or any other document
related thereto or the rights of any Person with respect thereto.
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SECTION 10. Waiver.
To the fullest extent permitted by Applicable Law, AESI hereby
expressly waives diligence, presentment, demand for payment, protest, benefit of
any statute of limitations affecting the liability of the Company under the
Financing Documents, benefit of any act or omission by the Collateral Agent
which directly or indirectly results in or aids the discharge of the Company by
operation of law or otherwise, all notices relating to this Agreement,
including, without limitation, notice of acceptance of this Agreement and the
incurring of the obligation to make or to cause to be made any payment hereunder
and notice of any of the circumstances referred to in Section 8, and any
requirement that the Collateral Agent exhaust any right, power, or remedy, or
proceed against the Company for the Equity Contributions.
SECTION 11. Support Instruments.
(a) Any payments made to the Collateral Agent under, or pursuant to
drawings on or from, an AESI Support Instrument shall (i) be deemed to be a
capital contribution by AESI to the Company and to satisfy, to the extent of
such payment, the obligation of AESI to make the applicable AESI Equity
Contribution hereunder.
(b) At any time prior to the termination of AESI's obligations under
this Agreement, AESI may deliver to the Collateral Agent a Substitute Support
Instrument or Substitute Support Instruments having a stated amount or combined
stated amounts, as the case may be, equal to the amount covered by any
previously delivered AESI Support Instrument, in substitution for such existing
Support Instrument. Upon such delivery, the previously delivered AESI Support
Instrument may be terminated by the issuer thereof.
(c) Upon the earlier of (i) the termination of AESI's obligations under
this Agreement or (ii) the delivery to the Collateral Agent of a Substitute
Support Instrument, or Substitute Support Instruments, as the case may be,
pursuant to and in the amount specified in Section 11(b), the Collateral Agent
shall promptly return to the issuer thereof, with a copy to AESI, the applicable
Support Instrument or Support Instruments, as the case may be, previously
delivered to the Collateral Agent, together with any certificate or other
documentation that may be required to effect the cancellation of such Support
Instrument or Support Instruments.
(d) (i) Upon the request of AESI and subject to the receipt of the
Support Account Documentation, as defined below, in form and substance
satisfactory to the Collateral Agent, the Collateral Agent shall open with a
bank or trust company an account in the name of AESI but under the sole dominion
and control of the Collateral Agent (the "AESI Support Account"). Any Cash
Deposit by AESI and any Equity Contribution made upon the occurrence of an event
set forth in Section 11(f) shall be deposited in the AESI Support Account (as
provided therein). The Collateral Agent shall not withdraw funds from the AESI
Support Account except as provided in this Section 11(d). The term "Support
Account Documentation" shall mean documentation in form and substance
satisfactory to the Collateral Agent which (A) grants the Collateral Agent, for
the benefit of the Senior Parties, a security interest in any Cash Deposit or
other amounts deposited in the AESI Support Account and (B) contains the
agreement of AESI to transfer additional cash to the AESI Support Account in
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the event that the aggregate market value of the Permitted Investments (plus any
cash deposits) in such AESI Support Account is, at any time, less than the AESI
Support Amount.
(ii) On each Equity Contribution Date, the Collateral Agent
shall withdraw an amount equal to the required Equity Contribution from
the AESI Support Account, and such withdrawal shall be deemed to
satisfy the obligation of AESI to make, or cause to be made, the
related Equity Contribution hereunder. The Collateral Agent shall apply
all such withdrawn amounts to the satisfaction of amounts owing as
Equity Contributions.
(iii) Amounts on deposit in the AESI Support Account shall be
invested and reinvested by the Collateral Agent, at the direction,
expense and risk of AESI, in Permitted Investments. If the amount on
deposit in such AESI Support Account exceeds the applicable AESI
Support Amount, an amount equal to the amount of such excess shall be
withdrawn at the end of each calendar quarter by the Collateral Agent
and the net amount thereof (after giving effect to any broker
commissions or other expenses of withdrawal or sale) shall be paid to
AESI.
(iv) If, following a Cash Deposit by AESI into the AESI
Support Account, AESI shall deliver a Substitute Support Instrument or
Substitute Support Instruments in respect of such amount to the
Collateral Agent, the Collateral Agent shall promptly withdraw and pay
to AESI such amount (after giving effect to any broker commissions or
other expenses of withdrawal or sale).
(v) Upon the satisfaction or other termination of the
obligations of AESI hereunder, the remaining balance, if any, of the
AESI Support Account shall be paid forthwith to AESI.
(e) If, at any time prior to the termination of this Agreement, an AESI
Support Instrument then in effect shall fail to be renewed or extended in
accordance with the terms of such Support Instrument fifteen (15) Business Days
prior to the day upon which such Support Instrument is scheduled to expire or
terminate and AESI shall have failed to furnish a Substitute Support Instrument
or Substitute Support Instruments in substitution for such Support Instrument,
then the Collateral Agent shall draw upon such Support Instrument in accordance
with its terms prior to such expiration or termination date and shall deposit
the proceeds of any such drawing into the AESI Support Account; provided that if
no such AESI Support Account is then currently in existence, the Collateral
Agent shall hold such proceeds in a separate account until such AESI Support
Account is established in accordance with Section 11(d)(i) and shall promptly
deposit such proceeds in such AESI Support Account upon its establishment.
(f) AESI shall cause any AESI Support Instrument that is an Acceptable
Letter of Credit to be issued by a bank whose senior unsecured debt is rated at
least "A-" or the equivalent by S&P and Xxxxx'x. If, at any time prior to the
termination of this Agreement, the outstanding long-term senior unsecured debt
of the bank providing an AESI Support Instrument that is an Acceptable Letter of
Credit fails at any time to be rated at least "A-" or the equivalent by S&P and
Xxxxx'x (such event, a "Downgrade Event"), AESI shall, within fifteen (15)
Business Days of its receipt of written notice from the Collateral Agent of the
occurrence of such event, furnish
11
a Substitute Support Instrument in substitution for such Support Instrument and
if prior to the expiration of such fifteen (15) day period, AESI shall have
failed to furnish a Substitute Support Instrument, then the Collateral Agent
shall draw upon the Support Instrument then in effect in accordance with its
terms and shall deposit the proceeds of such drawing into the AESI Support
Account for application in accordance with the provisions of Section 11(d);
provided that if no such AESI Support Account is then currently in existence,
the Collateral Agent shall hold such proceeds in a separate account until such
AESI Support Account is established in accordance with Section 11(d)(i) and
shall promptly deposit such proceeds in such AESI Support Account upon its
establishment.
(g) AESI shall cause any AESI Support Instrument that is an Acceptable
Bond to be issued by an insurance company whose senior unsecured debt is rated
at least "A" or the equivalent by S&P and Xxxxx'x. If, at any time prior to the
termination of this Agreement, the outstanding senior unsecured long-term debt
of the bank providing an AESI Support Instrument that is an Acceptable Bond
fails at any time to be rated at least "A" or the equivalent by S&P and Xxxxx'x
(such event, an "IC Downgrade Event"), AESI shall, within fifteen (15) Business
Days of its receipt of written notice from the Collateral Agent of the
occurrence of such event, furnish a Substitute Support Instrument or Substitute
Support Instruments in substitution for such AESI Support Instrument and if
prior to the expiration of such fifteen (15) day period, AESI shall have failed
to furnish a Substitute Support Instrument, then the Collateral Agent shall draw
upon the AESI Support Instrument then in effect in accordance with its terms and
shall deposit in the proceeds of such drawing into the AESI Support Account for
application in accordance with the provisions of Section 11(d); provided, that
if no such AESI Support Account is then currently in existence, the Collateral
Agent shall hold such proceeds in a separate account until such AESI Support
Account is established in accordance with Section 11(d)(i) and shall promptly
deposit such proceeds in such AESI Support Account upon its establishment.
SECTION 12. Rescission of Payment.
To the fullest extent permitted by Applicable Law and notwithstanding
any prior release or termination, this Agreement shall continue to be effective
or be reinstated, as the case may be, with respect to AESI if at any time any
payment (or part thereof) made or caused to be made by AESI pursuant to this
Agreement is rescinded or must otherwise be restored or returned to AESI or the
Company by any beneficiary of this Agreement upon the insolvency, bankruptcy or
reorganization of AESI or the Company or otherwise, all as though such payment
has not been made or caused to be made.
SECTION 13. Separate Undertakings.
Without limiting the generality of any of the foregoing provisions of
this Agreement, AESI irrevocably waives, to the fullest extent permitted by
applicable law and for the benefit of, and as a separate undertaking with, the
Collateral Agent, for the benefit of the Senior Parties, any defense to the
performance of this Agreement which may be available to it as a consequence of
this Agreement being rejected or otherwise not assumed by the Company or any
trustee or other similar official for the Company or for any substantial part of
the property of the Company, or as
12
a consequence of this Agreement being otherwise terminated or modified, in any
proceeding seeking to adjudicate the Company a bankrupt or insolvent or seeking
liquidation, winding up, reorganization, arrangement, protection, relief or
composition of the Company or the debts of the Company under any law relating to
bankruptcy, insolvency or reorganization or relief or protection of debtors,
whether such rejection, non-assumption, termination or modification be by reason
of this Agreement being held to be an executory contract or by reason of any
other circumstance. If this Agreement shall be so rejected or otherwise not
assumed, or so terminated or modified, AESI agrees for the benefit of, and as a
separate undertaking with the Collateral Agent, for the benefit of the Senior
Parties, that it will be unconditionally liable to pay or to cause to be paid to
the Collateral Agent, for the benefit of the Senior Parties, an amount equal to
each payment which would otherwise be payable by it pursuant to the provisions
of this Agreement, or by such party that it would have caused to make payment,
under or in connection with this Agreement if this Agreement were not so
rejected or otherwise not assumed or were otherwise not so terminated or
modified, such amount to be payable to the Collateral Agent, for the benefit of
the Senior Parties, in accordance with the instructions of the Collateral Agent,
as and when such payment would otherwise be payable hereunder and such amount to
be applied as such payment would otherwise be applied hereunder.
SECTION 14. Notices.
Any notice or other communication hereunder shall be given in the
manner set forth in the Collateral Agency Agreement to the Parties at the
following addresses:
(a) If to Company, at:
AES Ironwood, L.L.C.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Project Manager
(Telephone): 000-000-0000
(Facsimile): 000-000-0000
(with a copy to AESI at its addresses set forth below)
(b) If to AESI, at:
AES Ironwood, Inc.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
(Telephone): 000-000-0000
(Facsimile): 000-000-0000
13
(c) If to the Collateral Agent, at:
IBJ Whitehall Bank & Trust Company
Xxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Capital Markets Trust Services
(Telephone): 000-000-0000
(Facsimile): 000-000-0000
SECTION 15. Successors and Assigns.
This Agreement shall be binding upon each of the Parties and their
successors and inure to the benefit of the Collateral Agent and its respective
successors and permitted assigns as Collateral Agent under the Collateral Agency
Agreement. This Agreement may not be assigned by either AESI or the Company;
provided, however, the obligations of the AESI and the Company hereunder may be
assigned as provided in Section 8 or otherwise with the prior express written
consent of the Required Senior Parties.
SECTION 16. Amendment, Etc.
No amendment or waiver of any provision of this Agreement nor any
consent to any departure by a Party herefrom shall in any event be effective
unless the same shall be in writing and signed by each Party, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure or delay on the part of the
Collateral Agent in exercising any right or remedy hereunder shall operate as a
waiver thereof nor shall any single or partial exercise of any power or right
preclude other or further exercise thereof or the exercise of any other right or
remedy.
SECTION 17. Remedies.
No remedy herein conferred upon or reserved to the Collateral Agent is
intended to be exclusive of any other available remedy or remedies, but each and
every such remedy shall be cumulative and shall be in addition to every other
remedy given under this Agreement or now or hereafter existing at law or in
equity or by statute. In order to entitle the Collateral Agent to exercise any
remedy reserved to it in this Agreement, it shall not be necessary to give any
notice, other than such notice as may be expressly required by this Agreement.
No notice to or demand on AESI in any case shall entitle it to any other or
further notice or demand in the same or similar circumstances. Each and every
right and remedy of the Collateral Agent shall, to the extent permitted by law,
be cumulative and shall be in addition to any other remedy given hereunder or
under the Collateral Agency Agreement or any other document now or hereafter
existing at law or in equity or by statute.
SECTION 18. Headings.
The headings herein are included for convenience of reference only and
shall be ignored in the construction or interpretation hereof.
14
SECTION 19. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW
PROVISIONS OF SUCH LAWS).
SECTION 20. Consent to Jurisdiction.
To the fullest extent permitted by applicable law, with respect to any
legal action or proceeding against AESI arising out of or in connection with
this Agreement, AESI hereby irrevocably (i) consents to the jurisdiction of any
court of the State of New York or of the United States of America located in The
City of New York, (ii) consents to the service of process outside the
territorial jurisdiction of said courts in any such action or proceeding by
mailing copies thereof by registered United States mail, postage prepaid, to the
address specified pursuant to Section 12 hereof, and (iii) waives any objection
to the venue of the aforesaid courts and any objection that the aforesaid courts
are an inconvenient forum.
SECTION 21. Waiver of Jury Trial.
THE COLLATERAL AGENT, THE COMPANY AND AESI HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
SECTION 22. Expenses.
The Company will, upon demand, pay to the Collateral Agent any and all
reasonable expenses, including attorneys' fees and expenses, which the
Collateral Agent may incur in connection with the exercise or enforcement of any
of the rights or interests of the Collateral Agent hereunder.
SECTION 23. Counterparts.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
SECTION 24. Severability.
If any provision of this Agreement shall be held or deemed to be or
shall, in fact, be illegal, inoperative or unenforceable, the same shall not
affect any other provision or provisions herein contained or render the same
invalid, inoperative or unenforceable to any extent whatever.
15
SECTION 25. Termination.
This Agreement and the obligations hereunder shall terminate upon the
payment in full of all Equity Contributions required under this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
16
IN WITNESS WHEREOF, the Parties have each caused this Agreement to be
executed by its duly appointed representatives as of the date first written
above.
AES IRONWOOD, L.L.C., a Delaware limited
liability company
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
AES IRONWOOD, INC., a Delaware corporation
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
IBJ WHITEHALL BANK & TRUST COMPANY,as
Collateral Agent
By: /s/ Xxxxxx XxXxxxxxxx
--------------------------------
Name: Xxxxxx XxXxxxxxxx
Title: Assistant Vice President
[EQUITY SUBSCRIPTION AGREEMENT]
EXHIBIT A
_______ __, 1999
Beneficiary: IBJ Whitehall Bank & Trust Company,
as Collateral Agent
c/o________________________
___________________________
___________________________
Attention: ______________
______________
Subject: Irrevocable Standby Letter of Credit No. [L/C______]
Gentlemen:
We hereby issue in your favor our Irrevocable Letter of Credit No. __________
(this "Letter of Credit") for the account of AES Ironwood, Inc. ("Ironwood") for
an amount (the "Stated Amount") on any date equal to the difference between (x)
$50,149,285.00 (the "Maximum Stated Amount") and (y) the total amount of prior
draws received and honored by us pursuant to this Letter of Credit.
We understand that this Letter of Credit is being issued to you in connection
with that certain Equity Subscription Agreement dated as of June 1, 1999, among
Ironwood, AES Ironwood, L.L.C. and IBJ Whitehall Bank & Trust Company, in its
capacity as Collateral Agent (the "Collateral Agent") under the Collateral
Agency Agreement by and among Ironwood, AES Ironwood, L.L.C., the Collateral
Agent and the other parties thereto and each other person party thereto, and
Prior to the Termination Date (as hereinafter defined) of this Letter of Credit,
you may draw from time to time an amount not exceeding the Stated Amount, on the
conditions set forth herein against presentation in the manner provided herein
of your sight draft on us (marked "Drawn under Letter of Credit No. L/C ")
accompanied by a signed Drawing Certificate in the form attached hereto as Annex
A appropriately completed (such sight draft and Drawing Certificate being
referred to hereinafter collectively as the "Documents").
Presentation of the Documents shall be made at our office, ___________________
__________________________________________________ (fax no. __________) Attn:
Letter of Credit Department, either by physical delivery of such documents or by
facsimile transmission of such documents to the office stated above. Upon such
presentation, the payment of a drawing shall be made in accordance with the
terms herein. Such Documents shall be sent to our office by overnight courier
for receipt by us within one Business Day of the date of such facsimile
transmission. Our only obligation with regard to a drawing under this Letter of
Credit shall be to
Exhibit A-1
examine the Documents and to pay in accordance therewith, and we shall not be
obligated to make any inquiry in connection with the presentation of the
Documents.
If the requisite Documents are presented to us at or prior to 12:00 noon (New
York time) on a Business Day (as hereinafter defined), and provided that such
Documents conform to the terms and conditions hereof, payment of the amount
specified shall be made to you in immediately available funds on or prior to
3:00 p.m. (New York time) on such day. If a drawing is made hereunder after
12:00 noon (New York time) on a Business Day, and provided that such Documents
conform to the terms and conditions hereof, payment of the amount specified
shall be made to you in immediately available funds, not later than 12:00 noon
(New York time), on the following Business Day. If a demand for payment made
hereunder does not, in any instance, conform to the terms and conditions of this
Letter of Credit, we shall give you prompt notice that the Documents were not in
accordance with the terms and conditions of this Letter of Credit, stating the
reasons therefor and that we will hold the Documents at your disposal or return
the same to you. Upon being notified that the Documents were not in conformity
with this Letter of Credit, you may attempt to correct any such nonconforming
Documents if and to the extent that you are able to do so.
This Letter of Credit is effective immediately and, unless terminated earlier in
accordance with the provisions hereof, expires at the close of business at our
office in _______________ three hundred sixty four (364) days from today's date
(the "Stated Expiration Date") but such Stated Expiration Date shall be
automatically extended for a period of three hundred sixty four (364) days
effective upon the Stated Expiration Date and each annual anniversary of the
Stated Expiration Date (each such annual anniversary date being referred to
herein as the "New Stated Expiration Date") unless, thirty days prior to the
Stated Expiration Date or any such New Stated Expiration Date, we notify you, by
registered mail or courier service at the above address, that this Letter of
Credit shall not be extended beyond the Stated Expiration Date or the New Stated
Expiration Date, as the case may be, provided that this letter of credit shall
not be extended for more than three (3) such additional periods. If you are so
notified, you may on or within fifteen (15) Business Days before the Stated
Expiration Date or the New Stated Expiration Date, as the case may be, draw the
full Stated Amount then available hereunder. Any drawing under this Letter of
Credit will be paid with our own funds and not out of any other funds or other
assets.
Only you may make a drawing under this Letter of Credit. Multiple drawings may
be made under this Letter of Credit. Upon the payment of a drawing, we shall be
fully discharged of our obligation under this Letter of Credit in respect of any
amount in excess of the Stated Amount, as the case may be, after giving effect
to such drawing, and we shall not thereafter be obligated to make any further
payments under this Letter of Credit in respect of any amount in excess of the
Stated Amount, as the case may be, after giving effect to such drawing.
Upon the earliest of (i) the close of business at our office in ______________
on the Stated Expiration Date or New Stated Expiration Date, as the case may be,
(ii) the date we have paid the Maximum Stated Amount under all drawings made
hereunder or (iii) the date of our receipt of a
Exhibit A-2
certificate in the form of Annex B purportedly signed by two (2) Authorized
Officers (a "Certificate as to Defeasance"), (which earliest date of (i), (ii)
or (iii) is referred to herein as the "Termination Date"), this Letter of Credit
shall automatically terminate and expire and the original of this Letter of
Credit shall be immediately delivered to us for cancellation.
Communications with respect to this Letter of Credit shall be in writing and
shall be addressed to us at ______________________________________, specifically
referring therein to this Letter of Credit by number.
As used herein (a) "Authorized Officer" shall mean any of your Vice Presidents
and (b) "Business Day" shall mean any day on which commercial banks in New York,
New York are open for the purpose of conducting commercial banking business.
This Letter of Credit sets forth in full our undertaking, and such undertaking
shall not in any way be modified, amended, amplified or limited by reference to
any document, instrument or agreement referred to herein, except only the
certificates referred to herein, and any such reference shall not be deemed to
incorporate herein by reference any documents, instrument or agreement except
for such certificates.
This Letter of Credit shall be subject to the provisions (to the extent that
such provisions are not inconsistent with this Letter of Credit) of the Uniform
Customs and Practice for Documentary Credits, 1993 Revision, International
Chamber of Commerce Publication No. 500. To the extent that the provisions of
this Letter of Credit are not covered by such Uniform Customs and Practice, this
Letter of Credit shall be governed by, and enforced and construed in accordance
with the laws of the State of New York.
Very truly yours,
[_______________________ _______________________
Vice President Vice President]
Exhibit A-3
ANNEX A
(Form of Drawing Certificate)
Date:
TO: [Letter of Credit Provider] ("Issuing Bank")
Attn: Letter of Credit Department
RE: Irrevocable Letter of Credit No. ____________ (the "Letter of Credit")
The undersigned, duly authorized officers of IBJ Whitehall Bank & Trust Company
in its capacity as Collateral Agent (the "Collateral Agent") hereby certify to
Issuing Bank with reference to the Letter of Credit that:
(1)
_____ No Certificate as to Defeasance (as defined in the Letter of
Credit) has been delivered and AESI has become obligated to
make or cause to be made an Equity Contribution under Section
2 of the Equity Subscription Agreement referred to in the
Letter of Credit in the amount of $____________, which amount
does not exceed $___________, such amount being the current
AESI Support Amount under the Equity Subscription Agreement;
and
[or (1)]
_____ No Certificate as to Defeasance has been delivered and the
Letter of Credit will expire within fifteen (15) Business Days
and AESI has not furnished a Substitute Support Instrument (as
defined in the Equity Subscription Agreement) in substitution
for the Letter of Credit and as a consequence thereof the
entire Stated Amount of $___________ is due and payable.
[or (1)]
_____ No Certificate as to Defeasance has been delivered and there
has been a Downgrade Event (as defined in the Equity
Subscription Agreement) and AESI has not furnished a
Substitute Support Instrument (as defined in the Equity
Subscription Agreement) in substitution for the Letter of
Credit and as a consequence thereof the entire Stated Amount
of $______ is due and payable.
Exhibit A-4
(2) The amount of the sight draft accompanying this certificate equals the
amount due and payable as set forth above and does not exceed the
Stated Amount (as defined in the Letter of Credit).
IBJ WHITEHALL BANK & TRUST COMPANY, as
Agent
By: __________________________________
Name:
Title:
By: __________________________________
Name:
Title:
Exhibit A-5
ANNEX B
(Form of Certificate as to Defeasance)
Date:
TO: [Letter of Credit Provider] ("Issuing Bank")
Attn: Letter of Credit Department
RE: Irrevocable Letter of Credit No. ____________ (the "Letter of Credit")
The undersigned, duly authorized officers of IBJ Whitehall Bank & Trust Company,
in its capacity as Collateral Agent (the "Collateral Agent") hereby certify to
Issuing Bank with reference to the Letter of Credit that:
_____ the AESI Support Amount (as defined in the Equity Subscription
Agreement referred to in the Letter of Credit) has been
reduced to zero as a result of drawings on the Letter of
Credit or Equity Contributions pursuant to Section 2(a) or (b)
of the Equity Subscription Agreement which have the effect of
reducing the AESI Support Amount; or
_____ a Substitute Support Instrument (as defined in the Equity
Subscription Agreement referred to in the Letter of Credit)
for the Stated Amount has been provided to the Collateral
Agent by or on behalf of AESI.
IBJ WHITEHALL BANK & TRUST COMPANY, AS
COLLATERAL AGENT
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
Exhibit A-6
Exhibit B
EXHIBIT B
___________ INSURANCE COMPANY
________________________________
(A Stock Company)
BOND NO. ______________
EQUITY CONTRIBUTION BOND
KNOW ALL PERSONS BY THESE PRESENTS, that we, AES IRONWOOD, INC., 0000
Xxxxx 00xx Xxxxxx, Xxxxxxxxx,XX 00000 as Principal, and ____________________, as
Surety, are held and firmly bound unto IBJ WHITEHALL BANK & TRUST COMPANY, as
COLLATERAL AGENT, as Obligee, in the amount of _______________________US DOLLARS
($___________ ), lawful money of the United States, the payment of which we bind
ourselves, our heirs, administrators, executors and assigns, jointly and
severally, firmly by these presents.
WHEREAS, Principal and AES Ironwood L.L.C. (the "Company") have entered
into an Equity Subscription Agreement with the Obligee dated as of June 1, 1999
(the "Equity Subscription Agreement") which is incorporated herein by reference
as if copied at length herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Surety hereby agrees for the
benefit of the Obligee as follows:
1. The Surety's obligation under this Equity Contribution Bond is such
that, if the Principal strictly abides by the terms and conditions of
Sections 2(a) and (b) of the Equity Subscription Agreement, then such
obligation shall become void, but otherwise will remain in full force
and effect during the term hereof.
2. This Equity Contribution Bond is for the term beginning JUNE 25, 1999
and ending JUNE 25, 2002 (the "Expiration Date"), and may be renewed by
the Surety with notification to the Obligee and Principal thirty (30)
days prior to the Expiration Date through issuance of a continuation
certificate to such effect.
3. Any request for payment under this Equity Contribution Bond must be in
writing, accompanied by the Obligee's certification in the form
attached hereto as Annex A, which certification shall supersede all
information that Surety may have received to the contrary as to the
matters so certified. The Obligee shall direct its request for payment
by facsimile to _____________________________________, FACSIMILE NUMBER
( ) ____________________. Surety hereby agrees that all claims
submitted in said manner during the term of this Equity Contribution
Bond will be paid by the close of business on the second business day
after the day the claim is made by wire transfer in immediately
available funds to the account of Obligee specified in such
certification. Any request for payment under this Equity Contribution
Bond in accordance with this paragraph 3 purporting to be signed by the
Obligee is conclusive and binding on Surety as to the
Exhibit B-1
matters stated therein and the obligation of Surety to pay upon receipt
of such request is irrevocable and binding on Surety.
4. Subject to paragraph 7 hereof, Surety may terminate this Equity
Contribution Bond as to future liability by delivering to the Obligee
at the above address via certified mail return receipt, thirty (30)
days prior to the date of such termination, notice of its intention to
be relieved of its liability hereunder. Said notice shall in no way
exonerate the Surety from liability incurred during the term of this
Equity Contribution Bond or limit in any manner Obligee's ability to
make, and be paid with respect to, claims submitted as provided in the
Form of Drawing Certificate attached hereto as Annex A.
5. Multiple claims may be made on this Equity Contribution Bond; provided,
however, that all such claims in the aggregate shall not exceed _______
_________________U.S. Dollars ($_____________ ) (the "Maximum Amount").
6. If, for any reason whatsoever, the Principal shall fail or be unable
duly, punctually and fully to pay any Equity Contribution as and when
the same shall become due and payable, Surety shall forthwith pay or
cause to be paid such Equity Contribution to the Obligee in accordance
with the terms hereof and of the Equity Subscription Agreement.
Surety's obligations under this Equity Contribution Bond are absolute,
unconditional, present and continuing obligations and are in no way
conditioned or contingent upon any attempt to collect from or enforce
payment by the Principal or upon any other event, contingency or
circumstance whatsoever, including payment under any other AESI Support
Instrument as such term is defined in the Equity Subscription
Agreement, and shall be binding upon and against Surety without regard
to the validity or enforceability of the Equity Subscription Agreement.
7. Any other provision of this Equity Contribution Bond to the contrary
notwithstanding, Surety agrees that the obligations of Surety set forth
in this Equity Contribution Bond shall be direct obligations of Surety,
and such obligations shall be absolute and unconditional, shall not be
subject to any counterclaim, set-off, deduction, diminution, abatement,
recoupment, suspension, deferment, reduction or defense (other than
full and strict compliance by the Surety with its obligations
hereunder) based upon any claim Surety or any other Person may have
against the Obligee, the Principal, the Company or any other Person,
including the provider of any other AESI Support Instrument, and shall
remain in full force and effect without regard to, and shall not be
released, discharged or in any way affected or impaired by, any
circumstance or condition whatsoever (other than full and strict
compliance by the Surety with its obligations hereunder), whether or
not Surety shall have any knowledge or notice thereof, including,
without limitation any occurrence or circumstance whatsoever which
might otherwise constitute a legal or equitable defense or discharge of
the liabilities of a surety or which might otherwise limit recourse
under this Equity Contribution Bond against Surety. The obligations of
Surety set forth herein constitute the full recourse obligations of
Surety enforceable against it to the full extent of all its assets and
properties. Without limiting the generality of the foregoing, Surety
agrees that (a) repeated and successive demands may be made and
Exhibit B-2
recoveries may be had hereunder as and when, from time to time, the
Principal shall default under or fail to comply with the terms of
Section 2 of the Equity Subscription Agreement and that notwithstanding
the recovery hereunder for or in respect of any such default or failure
to so comply by the Principal under the Equity Subscription Agreement,
this Equity Contribution Bond shall remain in full force and effect and
shall apply to each and every subsequent such default or failure, and
(b) if any Equity Contribution is paid by the Principal, and thereafter
all or any part of such payment is recovered from the Obligee upon the
insolvency, bankruptcy or reorganization of the Principal, the
liability of Surety hereunder with respect to such Equity Contribution
so paid and recovered shall, notwithstanding any prior release or
termination hereof, continue and remain in full force and effect, or
shall be reinstated, as the case may be, as if, to the extent of such
recovery, such payment had not been made.
8. Surety hereby unconditionally waives, to the extent permitted by
applicable law, (i) all notices which may be required by statute, rule
of law or otherwise, now or hereafter in effect, to preserve any rights
against the Surety hereunder, including, without limitation, any
demand, proof or notice of non-payment of any Equity Contribution; (ii)
any right to the enforcement, assertion or exercise of any right,
remedy, power or privilege under or in respect of the Equity
Subscription Agreement; (iii) notice of acceptance of this Equity
Contribution Bond, demand, protest, presentment, notice of default and
any requirement of diligence; (iv) any requirement to exhaust any
remedies or to mitigate any damages resulting from default by the
Principal under the Equity Subscription Agreement; (v) the benefit of
any and all applicable laws which are or might be in conflict with the
terms of this Equity Contribution Bond; and (vi) any other circumstance
whatsoever which might otherwise constitute a legal or equitable
discharge, release or defense of a surety, or which might otherwise
limit recourse under this Equity Contribution Bond against Surety.
9. Surety shall be subrogated to all rights of the Company against
Principal under the Equity Subscription Agreement in respect of any
amounts paid by Surety pursuant to the provisions of this Equity
Contribution Bond; provided, however, that Surety shall be entitled to
enforce, or to receive any payments arising out of or based upon, such
right of subrogation only after all required Equity Contributions under
and as defined in the Equity Subscription Agreement have been paid in
full. Surety acknowledges and agrees that no proper payment by Surety
under this Equity Contribution Bond shall give rise to (i) any claim by
Surety against the Obligee or (ii) any indebtedness of the Company.
10. The Obligee shall have all of the rights and remedies available under
applicable law and may proceed by appropriate court action to enforce
the terms hereof and to recover damages for the breach hereof. Each and
every remedy of the Obligee shall, to the extent permitted by law, be
cumulative and shall be in addition to any other remedy now or
hereafter existing at law or in equity. At the option of the Obligee
and upon notice to Surety, Surety may be joined in any action or
proceeding commenced by such Obligee against the Principal in respect
of any Equity Contribution, and recovery may be had against Surety in
such action or proceeding or in any independent action or proceeding
Exhibit B-3
against Surety, without any requirement that such Obligee first assert,
prosecute or exhaust any remedy or claim against the Principal.
11. THIS EQUITY CONTRIBUTION BOND SHALL IN ALL RESPECTS BE GOVERNED,
INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK WITHOUT GIVING EFFECT TO ANY CONFLICTS OF LAWS PROVISIONS OF
SUCH LAWS.
12. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, WITH RESPECT TO ANY
LEGAL ACTION OR PROCEEDING AGAINST SURETY ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT, SURETY HEREBY IRREVOCABLY (I) CONSENTS
TO THE JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK OR OF THE
UNITED STATES OF AMERICA LOCATED IN THE CITY OF NEW YORK, (II) CONSENTS
TO THE SERVICE OF PROCESS OUTSIDE THE TERRITORIAL JURISDICTION OF SAID
COURTS IN ANY SUCH ACTION OR PROCEEDING BY MAILING COPIES THEREOF BY
REGISTERED UNITED STATES MAIL, POSTAGE PREPAID, TO THE ADDRESS
SPECIFIED IN THE FIRST PARAGRAPH OF THE EQUITY CONTRIBUTION BOND, AND
(III) WAIVES ANY OBJECTION TO THE VENUE OF THE AFORESAID COURTS AND ANY
OBJECTION THAT THE AFORESAID COURTS ARE IN INCONVENIENT FORUM.
Signed, sealed and dated this the ____________ day of June 1999.
WITNESS: AES IRONWOOD, INC.
--------------------------------- ------------------------------------
WITNESS: ____________INSURANCE COMPANY
--------------------------------- ------------------------------------
, ATTORNEY-IN-FACT
Exhibit B-4
ANNEX A
(Form of Drawing Certificate)
Date:
TO: [Name of Insurance Company issuing the Equity Contribution Bond] ("Issuer")
RE: Equity Contribution Bond No. ____________ (the "Bond")
The undersigned, duly authorized officers of IBJ Whitehall Bank & Trust Company,
in its capacity as Collateral Agent (the "Agent"), hereby certify to Issuer with
reference to the Equity Contribution Bond (the "Bond"):
(1) Principal (as such term is defined in the Bond) has become obligated to
make or cause to be made an Equity Contribution under Section 2 of the
Equity Subscription Agreement referred to in the Bond in the amount of
$____________;
[or (1)]
The Bond will terminate or expire within fifteen (15) Business Days and
Principal has not furnished a Substitute Support Instrument(s) (as
defined in the Equity Subscription Agreement) in substitution for the
Bond and as a consequence thereof the entire remaining amount of the
Bond ($___________) is due and payable; and
[or (1)]
There has been an IC Downgrade Event (as defined in the Equity
Subscription Agreement) and Principal has not furnished a Substitute
Support Instrument(s) (as defined in the Equity Subscription Agreement)
in substitution for the Bond and as a consequence thereof the entire
remaining amount of the Bond ($________) is due and payable; and
Exhibit B-5
(2) The amount specified above equals the amount due and payable as set
forth above and, when added to all previous amounts paid under the
Bond, does not exceed the Maximum Amount (as defined in the Bond);
(3) The amount specified above is to be sent by wire transfer to ________.
IBJ WHITEHALL BANK & TRUST COMPANY,
AS COLLATERAL AGENT
By: ________________________________
Name:
Title:
By: ________________________________
Name:
Title:
Exhibit B-6
