, dated as of June 5, 2001 (the ""), between:
The AES Corporation, a Delaware corporation (the "Company"); and
Banc of America Securities LLC ("Banc of America" and, in its capacity as
the remarketing dealer hereunder, the "Remarketing Dealer").
WHEREAS, the Company has issued $200,000,000 aggregate principal amount of
its 7.375% Remarketable or Redeemable Securities (ROARSSM) 1 due 2013 (the
"ROARS") pursuant to an Indenture, dated as of December 8, 1998, as
supplemented by a supplemental indenture, dated as of June 5, 2001 (as
supplemented, the "Indenture"), between the Company and Bank One, National
Association (formerly known as The First National Bank of Chicago), as trustee
(in such capacity, the "Trustee"); and
WHEREAS, the ROARS are being sold initially pursuant to an underwriting
agreement, dated May 31, 2001 (the "Underwriting Agreement"), among the
Company, Banc of America Securities LLC, Credit Suisse First Boston
Corporation, Xxxxxx Brothers Inc., Xxxxxxx Xxxxx Barney Inc. and ABN AMRO
Incorporated (collectively, the "Underwriters");
WHEREAS, the ROARS will be offered and sold to the Underwriters as
registered securities under the Securities Act of 1933, as amended (the "1933
Act");
WHEREAS, the Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(the "Registration Statement") relating to, among other things, certain debt
securities, common stock, par value $.01 per share, of the Company and
preferred stock, no par value, of the Company, at the time the Registration
Statement became effective, of which the prospectus dated May 26, 2000 (the
"Prospectus") was a part;
WHEREAS, the Company has prepared a preliminary prospectus supplement
dated May 29, 2001 (the "Preliminary Prospectus Supplement") and a final
prospectus supplement dated May 31, 2001 (the "Prospectus Supplement") relating
to the offer and sale of the ROARS (the "Offering") (as used herein, the term
"Offering Document" shall be deemed to include the Prospectus Supplement, the
Prospectus and all documents incorporated therein by reference, as from time to
time amended or supplemented pursuant to the 1933 Act or the Securities
Exchange Act of 1934, as amended (the "1934 Act"), except that if any new or
revised prospectus or prospectus supplement shall be provided to the
Remarketing Dealer by the Company for use in connection with the remarketing of
the ROARS which differs from the
Prospectus or the Prospectus Supplement, the term "Offering Document" shall
refer to such new or revised prospectus or prospectus supplement, as the case
may be, from and after the time it is first provided to the Remarketing Dealer
for such use); and
WHEREAS, Banc of America is prepared to act as the Remarketing Dealer with
respect to the remarketing of the ROARS on any Remarketing Date (as defined
herein) pursuant to the terms of, but subject to the conditions set forth in,
this Agreement;
---------------------------
1 (SM)Service xxxx of Banc of America Securities LLC
NOW, THEREFORE, for and in consideration of the covenants herein made, and
subject to the conditions set forth herein, the parties hereto agree as
follows:
Section 1. Definitions. Capitalized terms used and not defined in this
Agreement shall have the meanings assigned to them in the Indenture (including
in the form of each of the ROARS issued thereunder).
Section 2. Representations and Warranties.
(a) The Company represents and warrants to the Remarketing Dealer as of
the date hereof, any Notification Date (as defined below), any Determination
Date (as defined below), any Remarketing Date and until the 60th day after each
such dates (each of the foregoing dates being hereinafter referred to as a
"Representation Date"), that (i) it has made all the filings with the
Commission, if any, that it is required to make under the 1934 Act and the
rules and regulations thereunder (the "1934 Act Regulations") (collectively,
the "1934 Act Documents"), (ii) each 1934 Act Document complies, or will
comply, as the case may be, when filed, in all material respects with the
requirements of the 1934 Act and 1934 Act Regulations, and each 1934 Act
Document did not at the time of filing with the Commission, and as of each
Representation Date (except to the extent corrected by a later filed 1934 Act
Document that is filed before such Representation Date), will not include an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
(iii) the applicable Remarketing Materials (as defined herein) will not, as of
the Remarketing Date and each date thereafter, if any, that the Remarketing
Dealer is required by applicable law to deliver Remarketing Materials in
connection with the delivery of the ROARS, include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (iv) no consent,
approval, authorization, order or decree of any court or governmental agency or
body, excluding a possible Registration Statement, is required for the
consummation by the Company of the transactions contemplated by this Agreement
or in connection with the remarketing of the ROARS pursuant hereto, except such
as have been or shall have been obtained or rendered, as the case may be and
(v) the representations and warranties contained in the Underwriting Agreement
are true and correct with the same force and effect as though expressly made at
and as of such Representation Date; provided that therein, all references to
Remarketing Materials shall mean the Remarketing Materials, as amended or
supplemented at such time.
2
(b) Any certificate signed by any director or officer of the Company and
delivered to the Remarketing Dealer or to counsel for the Remarketing Dealer in
connection with the remarketing of the ROARS shall be deemed a representation
and warranty by the Company to the Remarketing Dealer as to the matters covered
thereby.
Section 3. Covenants of the Company. The Company covenants with the
Remarketing Dealer as follows:
(a) The Company will provide prompt notice by telephone, confirmed in
writing (which may include facsimile or other electronic transmission), to the
Remarketing Dealer (A) upon the occurrence of an Event of Default with respect
to the ROARS and (B) if any of the following events occurs or is continuing
during the 45 days preceding a Remarketing Date: (i) any notification or
announcement by a "nationally recognized statistical rating agency" (as defined
by the Commission for purposes of Rule 436(g)(2) under the 0000 Xxx) with
regard to the ratings of any securities of the Company, including, without
limitation, notification or announcement of a downgrade in or withdrawal of the
rating of any security of the Company or notification or announcement of a
downgrade in or withdrawal of the rating of any security of the Company under
surveillance or review, including placement on what is currently called a
"watch list" or a "credit watch" with negative implications, or (ii) any event
set forth in Section 9(d) of this Agreement.
(b) The Company will furnish to the Remarketing Dealer:
(i) the Offering Document relating to the ROARS (including in each
case any amendment or supplement thereto and each document incorporated
therein by reference as soon as practicable when they become available);
and
(ii) in connection with the remarketing of ROARS, such other
information as the Remarketing Dealer may reasonably request from time to
time and, with the Company's prior written consent (such consent not to be
unreasonably withheld), provide to potential investors in connection with
the remarketing.
The Company agrees to provide the Remarketing Dealer with as many copies
of the foregoing written materials and other Company-approved information as
the Remarketing Dealer may reasonably request for use in connection with the
remarketing of the ROARS and consents to the use thereof for such purpose.
(c) If, during the period that is 45 days prior to any Remarketing Date,
any event or condition known to the Company relating to or affecting the
Company, any subsidiary thereof or the ROARS shall occur which could reasonably
be expected to cause the Offering Document or any of the reports, documents,
materials or information referred to in paragraph (b)(i) above or any document
incorporated therein by reference (collectively, the "Remarketing Materials")
to contain an untrue statement of a material fact or omit to state a material
fact, the
3
Company shall promptly notify the Remarketing Dealer in writing of the
circumstances and details of such event or condition.
(d) Prior to the Fixed Rate Remarketing Date, the Company will file all
documents required to be filed with the Commission pursuant to the 1934 Act
within the time periods required by the 1934 Act and the 1934 Act Regulations.
(e) The Company will comply with the 1933 Act and the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations and the 1939 Act and the
rules and regulations of the Commission thereunder so as to permit the
completion of the remarketing of the ROARS as contemplated in this Agreement
and in each Offering Document. If, at any time when an Offering Document is
required by the 1933 Act to be delivered in connection with sales of the ROARS,
any event shall occur or condition shall exist as a result of which it is
necessary, in the reasonable opinion of counsel for the Remarketing Dealer or
for the Company, to amend an Offering Document in order that such Offering
Document will not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser or, if it shall be necessary, in the opinion of such
counsel, at any such time to amend an Offering Document or file a new
registration statement or amend or supplement any Offering Document or issue a
new prospectus in order to comply with the requirements of the 1933 Act or the
1933 Act Regulations and the Commission's interpretations of the 1933 Act and
the 1933 Act Regulations, the Company, at its expense, will promptly (i)
prepare and file with the Commission such amendment or supplement as may be
necessary to correct such statement or omission or to make the Offering
Document comply with such requirements, or prepare and file any such new
registration statement and prospectus as may be necessary for such purpose,
(ii) furnish to the Remarketing Dealer such number of copies of such amendment,
supplement or other document as the Remarketing Dealer may reasonably request;
provided that (a) the Company shall be obligated to perform the agreements set
forth in (i) and (ii) above during the period ending on the 45th Business Day
after the Remarketing Date, and (b) subsequent to the 45th Business Day after
the Remarketing Date, the Company may suspend its obligation to comply with the
agreements set forth in (i) and (ii) above and the Remarketing Dealer shall
suspend the use of the Prospectus or any sales of the ROARS that would require
the delivery of a prospectus under the 1933 Act if (x) in the reasonable
opinion of counsel to the Company, the Company would be required to amend the
Registration Statement or amend or supplement any Prospectus to disclose (A)
information relating to corporate developments or business transactions
involving the Company or its subsidiaries that is not otherwise then required
by law to be publicly disclosed, or (B) financial or other information relating
to parties to such business transactions that is not readily available to the
Company, and (y) in the good faith judgment of the Chief Executive Officer or
Chief Financial Officer of the Company, such disclosure at such time could
materially and adversely affect the Company or any such corporate development
or business transaction contemplated by the Company or its subsidiaries, or
such disclosure would be unduly burdensome or impracticable for the Company to
provide. If the Remarketing Dealer has elected to remarket the ROARS and the
Company has not elected to redeem the ROARS, and if as of the Remarketing Date
the Company is obligated, pursuant to the preceding provisions of this
4
paragraph, to file and have declared effective a new registration statement or
to provide the Remarketing Dealer with a Prospectus, then the Company shall, at
its expense, on the Remarketing Date furnish to the Remarketing Dealer an
officers' certificate, an opinion, including a statement as to the absence of
material misstatements in or omissions from the Registration Statement and the
Prospectus of counsel for the Company satisfactory to the Remarketing Dealer
and a "comfort letter" from the Company's independent accountants, in each case
in form and substance satisfactory to the Remarketing Dealer, of the same tenor
as the officers' certificate, opinion and comfort letter, respectively,
delivered pursuant to the Underwriting Agreement, but modified to relate to the
Registration Statement and each Prospectus as amended or supplemented to the
date thereof or such new registration statement and prospectus.
(f) The Company agrees that neither it nor any of its subsidiaries or
affiliates shall, without the prior written consent of the Remarketing Dealer,
purchase or otherwise acquire, or enter into any agreement to purchase or
otherwise acquire, any of the ROARS prior to the remarketing thereof by the
Remarketing Dealer, other than pursuant to Section 4(h) or 4(i) of this
Agreement.
(g) The Company will comply with each of the covenants set forth in the
Underwriting Agreement through the final Remarketing Date.
Section 4. Appointment and Obligations of the Remarketing Dealer.
(a) Unless this Agreement is otherwise terminated in accordance with
Section 12 hereof, in accordance with the terms, but subject to the following
conditions, of this Agreement, the Company hereby appoints Banc of America, and
Banc of America hereby accepts such appointment, as the exclusive Remarketing
Dealer with respect to $200,000,000 aggregate principal amount of ROARS,
subject to the repurchase of ROARS in accordance with clause (h) of this
Section 4 or redemption of ROARS in accordance with clause (i) of this Section
4.
(b) It is expressly understood and agreed by the parties hereto that the
obligations of the Remarketing Dealer hereunder with respect to the ROARS to be
remarketed on a Remarketing Date are conditioned on (i) the issuance and
delivery of such ROARS by the Company pursuant to the terms and conditions of
the Underwriting Agreement and (ii) the Remarketing Dealer's election on the
Notification Date (as defined below) to purchase such ROARS for remarketing. It
is further expressly understood and agreed by and between the parties hereto
that, if the Remarketing Dealer has elected to remarket the ROARS pursuant to
clause (c) below, the Remarketing Dealer shall not be obligated to set the
Interest Rate to Maturity (as defined below), or the Floating Period Interest
Rate (as defined below) on any of the ROARS, to remarket any of the ROARS or to
perform any of the other duties set forth herein at any time after the
Notification Date for such ROARS in the event that (i) any of the conditions
set forth in clause (a), (b) or (c) of Section 9 hereof shall not have been
fully and completely met to the satisfaction of the Remarketing Dealer, or (ii)
any of the events set forth in clause (d) of Section 9 hereof shall have
occurred.
5
(c) On a Business Day not earlier than 20 Business Days prior to the first
Remarketing Date and not later than 4:00 p.m., New York City time, on the 15th
Business Day prior to the first Remarketing Date, the Remarketing Dealer will
notify the Company and the Trustee as to whether it elects to purchase the
ROARS on such Remarketing Date (the "Notification Date"). If, and only if, the
Remarketing Dealer so elects, such ROARS shall be subject to mandatory tender
to the Remarketing Dealer for purchase and remarketing on such Remarketing
Date, upon the terms and subject to the conditions described herein. The ROARS
will be remarketed at a fixed rate of interest, unless, on any date subsequent
to the Remarketing Dealer's election to purchase the ROARS but prior to the
fourth Business Day prior to the first Remarketing Date (the "Floating Period
Notification Date") the Company has elected to exercise its Floating Period
Option, in which case the ROARS will be remarketed at a floating rate and bear
interest at the Floating Period Interest Rate until such a date (the "Floating
Period Termination Date") which is June 15, 2004 or the Reference Rate Reset
Date following the date on which the Company elects to terminate such floating
rate period (the "Floating Rate Period Termination Notification Date," which
Floating Rate Period Termination Notification Date shall be at least four
Business Days prior to such Reference Rate Reset Date), whichever is sooner, at
which time the ROARS will be remarketed at a fixed rate of interest unless the
Company has chosen to redeem, or is required to redeem, the ROARS. The purchase
price of such tendered ROARS shall be equal to 100% of the aggregate principal
amount thereof on the first Remarketing Date or the Dollar Price on the
subsequent Remarketing Date.
(d) Subject to the Remarketing Dealer's election to remarket the ROARS as
provided in clause (c) above, by 3:30 p.m., New York City time, on the third
Business Day immediately preceding any Remarketing Date (the "Floating Rate
Spread Determination Date" or the "Fixed Rate Determination Date" depending on
the following election, and each a "Determination Date") the Remarketing Dealer
shall determine the Floating Rate Spread in the case that the Company has
elected the Floating Period Option or otherwise the Interest Rate to Maturity
to the nearest one hundredth of one percent (0.01%) per annum unless the
Company has chosen to redeem, or is required to redeem, the ROARS. Each
Floating Period Interest Rate will equal the sum of a Reference Rate (as
defined below) and the Floating Rate Spread (as defined below). The Interest
Rate to Maturity shall be equal to the sum of 5.50% (the "Base Rate") and the
Applicable Spread (as defined below), which will be based on the Dollar Price
(as defined below) of the ROARS.
"Applicable Spread" shall be the lowest Fixed Rate Bid (as defined
below), expressed as a spread (in the form of a percentage or in basis
points) above the Base Rate for the ROARS, obtained by the Remarketing
Dealer at 3:30 p.m., New York City time, on the Fixed Rate Determination
Date from the Fixed Rate Bids quoted to the Remarketing Dealer by up to
five Reference Corporate Dealers (as defined below). A "Fixed Rate Bid"
will be an irrevocable offer to purchase the total aggregate outstanding
principal amount of the ROARS at the Dollar Price (as defined below), but
assuming (i) a settlement date that is the Fixed Rate Remarketing Date
applicable to such ROARS, without accrued interest, (ii) a maturity date
that is the tenth anniversary of the Fixed
6
Rate Remarketing Date or, if the Company elects to modify the maturity
date of the ROARS by giving written notice to the Remarketing Dealer no
later than by 4:00 p.m. on the fourth Business Days prior to the Fixed
Rate Remarketing Date, the maturity date specified by the Company in such
notice, which date shall be an anniversary of the Fixed Rate Remarketing
Date occurring on or prior to June 15, 2014, and (iii) a stated annual
interest rate equal to the relevant Base Rate plus the spread bid by the
applicable Reference Corporate Dealer (as defined below). The Interest
Rate to Maturity for the ROARS announced by the Remarketing Dealer, absent
manifest error, shall be binding and conclusive upon the holders of
beneficial interests in the ROARS (the "Beneficial Owners"), the Company
and the Trustee.
"Business Day" means any day other than a Saturday or Sunday or a day
on which banking institutions in New York City are authorized or obligated
by law or executive order to close.
"Comparable Treasury Issues" for the ROARS means the U.S. Treasury
security or securities selected by the Remarketing Dealer, as of the first
Determination Date, as having an actual or interpolated maturity or
maturities comparable to the remaining term of the ROARS being purchased
by the Remarketing Dealer.
"Comparable Treasury Price" means, with respect to the first
Remarketing Date, (i) the offer prices for the Comparable Treasury Issues
(expressed in each case as a percentage of its principal amount) at 12:00
noon, New York City time, on the first Determination Date, as set forth on
"Telerate Page 500" (as defined below) (or such other page as may replace
"Telerate Page 500"), or (ii) if such page (or any successor page) is not
displayed or does not contain such offer prices on such Determination
Date, (A) the average of the Reference Treasury Dealer Quotations (as
defined below) for such Determination Date, after excluding the highest
and lowest such Reference Treasury Dealer Quotations, or (B) if the
Remarketing Dealer obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Reference Treasury Dealer Quotations.
"Telerate Page 500" means the display designated as "Telerate Page 500" on
Dow Xxxxx Markets (or such other page as may replace Telerate Page 500 on
such service) or such other service displaying the offer prices specified
in clause (i) above as may replace Dow Xxxxx Markets. "Reference Treasury
Dealer Quotations" means, with respect to each Reference Treasury Dealer
(as defined below), the offer prices for the Comparable Treasury Issues
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Remarketing Dealer by such Reference Treasury Dealer by
3:30 p.m., New York City time, on the first Determination Date.
"Dollar Price" means, with respect to the ROARS (i) the principal
amount of such ROARS, plus (ii) the premium equal to the excess, if any,
of (A) the present value, as of the first Remarketing Date, of the
Remaining Scheduled Payments (as defined below) for such ROARS discounted
to such first Remarketing Date on a semi-annual basis
7
(assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate (as defined below), over (B) the principal amount of such
ROARS.
"Fixed Rate Determination Date" means the third Business Day prior to
the Fixed Rate Remarketing Date.
"Fixed Rate Remarketing Date" means the first Remarketing Date,
assuming the Remarketing Dealer has elected to purchase the ROARS and the
Company has not elected to exercise its Floating Period Option, or the
subsequent Remarketing Date in the event that the Company has elected to
exercise its Floating Period Option.
"Floating Period Interest Rate" means the sum of the Reference Rate
and the Floating Rate Spread.
"Floating Period Option" means the Company's right, on any date
subsequent to the Remarketing Dealer's election to purchase the ROARS but
prior to the fourth Business Day immediately preceding the first
Remarketing Date, to require the Remarketing Dealer to remarket the ROARS
at the Floating Period Interest Rate.
"Floating Rate Period" means the period from (and including) the
Floating Rate Remarketing Date to (but excluding) the Floating Period
Termination Date.
"Floating Rate Remarketing Date" means June 15, 2003, in the event
the Company has elected to exercise its Floating Period Option.
"Floating Rate Reset Period" means the period from (and including)
the first Reference Rate Reset Date to (but excluding) the next following
Reference Rate Reset Date and thereafter the period from (and including) a
Reference Rate Reset Date to (but excluding) the next following Reference
Rate Reset Date; provided that the final Floating Rate Reset Period shall
run to (but exclude) the Floating Period Termination Date.
"Floating Rate Spread" shall be the lowest Floating Rate Bid
expressed as a spread (in the form of a percentage or in basis points)
above the Reference Rate for the ROARS, obtained by the Remarketing Dealer
at 3:30 p.m., New York City time, on the Floating Rate Spread
Determination Date from the Floating Rate Bids quoted to the Remarketing
Dealer by up to five Reference Money Market Dealers (as defined below). A
"Floating Rate Bid" will be an irrevocable offer to purchase the total
aggregate outstanding principal amount of the ROARS at the Dollar Price,
but assuming (i) a settlement date that is the Floating Rate Remarketing
Date applicable to such ROARS, without accrued interest, (ii) a maturity
date equal to the Floating Period Termination Date, (iii) a stated annual
interest rate equal to the Reference Rate plus the spread bid by such
Reference Money Market Dealer, (iv) that the ROARS are callable by the
Remarketing Dealer, at the Dollar Price on the Floating Period Termination
Date and (v) that the ROARS will be redeemed by the Company at the Dollar
Price on the Floating
8
Period Termination Date if not previously purchased by the Remarketing
Dealer. The Floating Period Interest Rate for the ROARS announced by the
Remarketing Dealer, absent manifest error, shall be binding and conclusive
upon the Beneficial Owners, the Company and the Trustee.
"Floating Rate Spread Determination Date" means the third Business
Day prior to the Floating Rate Remarketing Date.
"Interest Rate to Maturity" means the sum of the Base Rate and the
Applicable Spread.
"London Business Day" means any day on which dealings in U.S. Dollars
are transacted in the London Inter-Bank Market.
"Reference Corporate Dealer" means each of up to five leading dealers
of publicly traded debt securities, including debt securities of the
Company, which shall be selected by the Company. The Company shall advise
the Remarketing Dealer of its selection of Reference Corporate Dealers no
later than five Business Days prior to the Fixed Rate Remarketing Date.
One of such Reference Corporate Dealers selected by the Company shall be
Banc of America, if Banc of America is then the Remarketing Dealer.
"Reference Money Market Dealer" means each of up to five leading
dealers of publicly traded debt securities, including debt securities of
the Company, which shall be selected by the Company, who are also leading
dealers in money market instruments. The Company shall advise the
Remarketing Dealer of its selection of Reference Money Market Dealers no
later than five Business Days prior to the Floating Rate Remarketing Date.
One of such Reference Money Market Dealers selected by the Company shall
be Banc of America, if Banc of America is then the Remarketing Dealer.
"Reference Rate" means the rate for each Floating Rate Reset Period
which shall be the rate for deposits in U.S. Dollars for a period of one
month which appears on the Telerate Page 3750 (or any successor page) as
of 11:00 a.m., London time, on the applicable Reference Rate Determination
Date. If no rate appears on Telerate Page 3750 on the Reference Rate
Determination Date, the Remarketing Dealer will request the principal
London offices of four major reference banks in the London Inter-Bank
Market, to provide it with its offered quotations for deposits in U.S.
Dollars for the period of one month, commencing on the first day of the
Floating Rate Reset Period, to prime banks in the London Inter-Bank Market
at approximately 11:00 a.m., London time, on that Reference Rate
Determination Date and in a principal amount that is representative for a
single transaction in U.S. Dollars in that market at that time. If at
least two quotations are provided, then the Reference Rate will be the
average of those quotations. If fewer than two quotations are provided,
then the Reference Rate will be the average (rounded, if necessary, to the
nearest one hundredth of a percent) of the rates quoted at approximately
11:00 a.m., New York City time, on the Reference Rate Determination Date
by three
9
major banks in New York City selected by the Remarketing Dealer for loans
in U.S. dollars to leading European banks, having a one-month maturity and
in a principal amount that is representative for a single transaction in
U.S. dollars in that market at that time. If the banks selected by the
Remarketing Dealer are not providing quotations in the manner described by
this paragraph, the rate for the Floating Rate Reset Period following the
Reference Rate Determination Date will be the rate in effect on that
Reference Rate Determination Date.
"Reference Rate Determination Date" shall be the second London
Business Day preceding each Reference Rate Reset Date.
"Reference Rate Reset Date" means the first Remarketing Date and the
15th day of each month thereafter until (but excluding) the Floating
Period Termination Date, or, if such day does not fall on a Business Day,
the next succeeding Business Day.
"Reference Treasury Dealer" means each of up to five primary U.S.
government securities dealers (each a "Primary Treasury Dealer") to be
selected by the Company, and their respective successors; provided that if
any of the foregoing or their affiliates ceases to be, and has no
affiliate that is, a Primary Treasury Dealer, the Company shall substitute
therefor another Primary Treasury Dealer. The Company shall advise the
Remarketing Dealer of its selection of Reference Treasury Dealers no later
than five Business Days prior to the Fixed Rate Remarketing Date. One of
such Reference Treasury Dealers selected by the Company shall be Banc of
America, if Banc of America is then the Remarketing Dealer.
"Remaining Scheduled Payments" means, with respect to the ROARS, the
remaining scheduled payments of the principal thereof and interest
thereon, calculated at the Base Rate applicable to such ROARS, that would
be due from but excluding the first Remarketing Date to and including the
Stated Maturity Date; provided that if such Remarketing Date is not an
Interest Payment Date with respect to such ROARS, the amount of the next
succeeding scheduled interest payment thereon, calculated at the Base
Rate, will be reduced by the amount of interest accrued thereon,
calculated at the Base Rate only, to the first Remarketing Date.
"Remarketing Date(s)" means (a) June 15, 2003 in the event the
Remarketing Dealer elects to purchase the ROARS and the Company does not
exercise its Floating Period Option or (b) if the Company has elected to
exercise its Floating Period Option, each of June 15, 2003 and the
Floating Period Termination Date.
"Stated Maturity Date" means June 15, 2013.
"Treasury Rate" for the ROARS means, with respect to the first
Remarketing Date, the rate per annum equal to the semi-annual equivalent
yield to maturity or interpolated (on a day count basis) yield to maturity
of the Comparable Treasury Issues,
10
assuming a price for the Comparable Treasury Issues (expressed as a
percentage of their principal amounts) equal to the Comparable Treasury
Price for such Remarketing Date.
(e) Subject to the Remarketing Dealer's election to remarket the ROARS and
to the Company's election not to exercise its Floating Period Option, as
provided in clause (c) above, the Remarketing Dealer shall notify the Company,
the Trustee and The Depository Trust Company ("DTC") by telephone, confirmed in
writing (which may include facsimile or other electronic transmission), by 4:00
p.m., New York City time, on the Fixed Rate Determination Date of the Interest
Rate to Maturity of the ROARS effective from and including the Fixed Rate
Remarketing Date.
(f) Subject to the Remarketing Dealer's election to remarket the ROARS as
provided in clause (c) above, on any Remarketing Date the Remarketing Dealer
shall sell the total aggregate principal amount of the ROARS at the Dollar
Price to the Reference Money Market Dealer or to the Reference Corporate
Dealer, whichever is applicable, providing the lowest Bid. If the lowest Bid is
submitted by two or more of the applicable Reference Dealers, the Remarketing
Dealer may sell such ROARS to one or more of such Reference Dealers as it shall
determine in its sole discretion.
(g) In the event that the ROARS are remarketed as provided herein, the
Remarketing Dealer shall pay to the Trustee, not later than 12:00 noon, New
York City time, on the first Remarketing Date, an amount equal to 100% of the
aggregate principal amount of such ROARS or on the subsequent Remarketing Date,
an amount equal to the Dollar Price. On such Remarketing Date, the Remarketing
Dealer shall cause the Trustee to make payment to the DTC participant of each
tendering Beneficial Owner of ROARS subject to remarketing by book-entry
through DTC by the close of business on such Remarketing Date against delivery
through DTC of such Beneficial Owner's tendered ROARS, of the purchase price
for such tendered ROARS that have been purchased for remarketing by the
Remarketing Dealer. The purchase price of such tendered ROARS shall be equal to
100% of the aggregate principal amount thereof on the first Remarketing Date
and the Dollar Price on the subsequent Remarketing Date. The Company shall
make, or cause the Trustee to make, payment of interest to each Beneficial
Owner of ROARS due on a Remarketing Date by book entry through DTC by the close
of business on such Remarketing Date.
(h) Subject to Section 12(c) of this Agreement, with respect to the ROARS,
in the event that (i) the Remarketing Dealer for any reason does not notify the
Company of the Floating Period Interest Rate or of the Interest Rate to
Maturity by 4:00 p.m., New York City time, on the applicable Determination
Date, (ii) prior to any Remarketing Date, the Remarketing Dealer resigns and no
successor has been appointed on or before such Determination Date, (iii) at any
time after the Remarketing Dealer elects on the Notification Date to remarket
such ROARS, the Remarketing Dealer elects to terminate the pursuant to Section 9 or Section 12 of this Agreement, (iv) the
Remarketing Dealer for any reason does not elect by notice to the Company and
the Trustee not later than such Notification Date to purchase such ROARS for
remarketing on such Remarketing Date, (v) the Remarketing Dealer for any
11
reason does not deliver the purchase price of such ROARS to the Trustee on the
Remarketing Date as required by clause (g) above or does not purchase all
tendered ROARS on such Remarketing Date, or (vi) the Company for any reason
fails to redeem the ROARS from the Remarketing Dealer following the Company's
election to effect such redemption as specified in Section 4(i) of this
Agreement, the Company shall repurchase the ROARS in whole on such Remarketing
Date at a price equal to 100% of the aggregate principal amount of the ROARS if
such Remarketing Date is the first Remarketing Date, or at the Dollar Price on
the subsequent Remarketing Date, plus all accrued and unpaid interest, if any.
In any such case, payment will be made by the Company through the Trustee to
the DTC participant of each tendering Beneficial Owner of ROARS, by book-entry
through DTC by the close of business on such Remarketing Date, against delivery
through DTC of such Beneficial Owner's tendered ROARS.
(i) If the Remarketing Dealer elects to remarket the ROARS as provided in
clause (c) above, then not later than 4:00 p.m., New York City time, on the
Business Day immediately preceding any Determination Date, the Company shall
notify the Remarketing Dealer and the Trustee if the Company irrevocably elects
to exercise its right to redeem the ROARS, in whole but not in part, from the
Remarketing Dealer on the Remarketing Date immediately following such
Determination Date at the Dollar Price, plus accrued and unpaid interest
therefor in same-day funds by wire transfer to an account designated by the
Remarketing Dealer on such Remarketing Date, and shall thereafter have no
obligation to pay the Calculation Amount (as defined herein) with respect to
the ROARS; provided that in the event that fewer than three Reference Corporate
Dealers submit timely firm bids for all outstanding ROARS to the Remarketing
Dealer on any Determination Date, then immediately after the deadline set by
the Remarketing Dealer for receiving such bids has passed and the Company has
been notified of the results, the Company shall notify the Remarketing Dealer
and the Trustee if the Company irrevocably elects to exercise its right to
redeem the ROARS. If the Company fails to redeem the ROARS from the Remarketing
Dealer following any such election, the Remarketing Dealer will be deemed to
have elected not to remarket the ROARS, subject to the obligation of the
Company to pay the Calculation Amount to the Remarketing Dealer as provided in
Section 12(e) of this Agreement. If the Company pays the Calculation Amount to
the Remarketing Dealer and repurchases the ROARS pursuant to Section 4(h), it
shall thereafter have no obligation to pay the Dollar Price with respect to the
ROARS.
(j) In accordance with the terms and provisions of the ROARS, the tender
and settlement procedures set forth in this Section 4, including provisions for
payment by the purchaser of ROARS in a remarketing or for payment to selling
Beneficial Owners of tendered ROARS, shall be subject to modification,
notwithstanding any provision to the contrary set forth in the Indenture, to
the extent required by DTC or, if the book-entry system is no longer available
for the ROARS at a time of their remarketing, to the extent required to
facilitate the tendering and remarketing of the ROARS in certificated form. In
addition, the Remarketing Dealer may (to the extent not inconsistent with the
Indenture) modify the settlement procedures in order to facilitate the
settlement process; the Remarketing Dealer shall promptly notify the Company of
such modifications to the settlement procedures.
12
(k) In accordance with the terms and provisions of the ROARS, the Company
hereby agrees that at all times, notwithstanding any provision to the contrary
set forth in the Indenture, (i) it will use its best efforts to maintain the
ROARS in book-entry form with DTC or any successor thereto and to appoint a
successor depositary to the extent necessary to maintain the ROARS in
book-entry form and (ii) it will waive any discretionary right it otherwise may
have under the Indenture to cause the ROARS to be issued in certificated form.
Section 5. Fees and Expenses. Subject to Section 12 of this Agreement, for
its services in performing its duties set forth herein, the Remarketing Dealer
will not receive any fees or reimbursement of expenses from the Company, unless
the Company and the Remarketing Dealer enter into a negotiated transaction to
determine the new interest rate, in lieu of the bidding process described
herein.
Section 6. Resignation of the Remarketing Dealer. The Remarketing Dealer
may resign and be discharged from its duties and obligations hereunder with
respect to the ROARS at any time, such resignation to be effective 10 Business
Days after delivery of a written notice to the Company and the Trustee of such
resignation. The Remarketing Dealer also may resign and be discharged from its
duties and obligations hereunder at any time with respect to the ROARS, such
resignation effective immediately, upon termination of the obligations of the
Remarketing Dealer with respect to the ROARS under this Agreement in accordance
with Section 12(b) hereof. It shall be the sole obligation of the Company to
appoint a successor Remarketing Dealer with respect to the ROARS. In the event
of the resignation of the Remarketing Dealer with respect to the ROARS for any
reason other than upon the termination of the obligations of the Remarketing
Dealer with respect to the ROARS under this Agreement in accordance with
Section 12(b) hereof, no amount will be due from the Company to the Remarketing
Dealer.
Section 7. Dealing in the ROARS. Banc of America, or any subsequent
Remarketing Dealer, when acting as the Remarketing Dealer or in its individual
or any other capacity, may, to the extent permitted by law, buy, sell, hold and
deal in any of the ROARS. Banc of America, as Holder or Beneficial Owner of
ROARS, may exercise any vote or join as a Holder or Beneficial Owner, as the
case may be, in any action which any Holder or Beneficial Owner of ROARS may be
entitled to take pursuant to the Indenture with like effect as if it did not
act in any capacity hereunder. The Remarketing Dealer, in its capacity either
as principal or agent, may also engage in or have an interest in any financial
or other transaction with the Company as freely as if it did not act in any
capacity hereunder.
Section 8.Information. The Company agrees to furnish to the Remarketing
Dealer until the Fixed Rate Remarketing Date (i) copies of each report or other
document mailed or filed by the Company with the Commission, including the
Offering Document relating to the ROARS (including in each case any documents
incorporated by reference) and (ii) in connection with any remarketing, such
other information as the Remarketing Dealer may reasonably request, including,
but not limited to, the financial condition of the Company or any material
subsidiary thereof. The Company agrees to provide the Remarketing Dealer with
as many copies of the
13
foregoing materials and information as the Remarketing Dealer may reasonably
request for use in connection with any remarketing and consents to the use
thereof for such purpose as promptly as practicable after such materials and
information become available.
Section 9. Conditions to Remarketing Dealer's Obligations. The obligations
of the Remarketing Dealer under this Agreement have been undertaken in reliance
on, and shall be subject to, (a) the due performance in all material respects
by the Company of its obligations and agreements as set forth in this Agreement
and the accuracy of the representations and warranties in this Agreement and
any certificate delivered pursuant hereto, (b) the due performance in all
material respects by the Company of its obligations and agreements set forth
in, and the accuracy in all material respects as of the dates specified therein
of the representations and warranties contained in, the Underwriting Agreement,
(c) the receipt by the Remarketing Dealer on any Remarketing Date of a
certificate of the Chairman of the Board, the President, the Chief Financial
Officer or a Vice President of the Company, and the Treasurer or an Assistant
Treasurer of the Company, dated as of such Remarketing Date, to the effect that
(i) the representations and warranties in this Agreement are true and correct
in all material respects with the same force and effect as though expressly
made at and as of such Remarketing Date, (ii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to such Remarketing Date and (iii) none of the events
specified in clause (d) (excepting subclauses (iii), (iv) and (viii)) has
occurred, and (d) the further condition that none of the following events shall
have occurred after the Remarketing Dealer elects on the Notification Date to
remarket the ROARS and on or before any Remarketing Date:
(i) the rating of any securities of the Company shall have been
downgraded or put under surveillance or review with negative implications,
including being put on what is commonly termed a "credit watch" or a
"watch list," or withdrawn by a nationally recognized statistical rating
agency;
(ii) without the prior written consent of the Remarketing Dealer, the
Indenture (including the ROARS) shall have been amended in any manner, or
otherwise contain any provision not contained therein as of the date
hereof, that in either case in the judgment of the Remarketing Dealer
materially changes the nature of the ROARS or the remarketing procedures
(it being understood that, notwithstanding the provisions of this clause
(ii), the Company shall not be prohibited from amending the Indenture);
(iii) trading in any securities of the Company shall have been
suspended or materially limited by the Commission, or trading generally on
the American Stock Exchange or the New York Stock Exchange or in the
Nasdaq National Market shall have been suspended or materially limited, or
minimum or maximum prices for trading shall have been fixed, or maximum
ranges for prices shall have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any governmental authority, or if a banking
moratorium shall have been declared by either Federal or New York
authorities;
14
(iv) there shall have occurred any material adverse change in the
financial markets in the United States, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of
which is such as to make it, in the judgment of the Remarketing Dealer,
impracticable to remarket the ROARS or to enforce contracts for the sale
of the ROARS;
(v) an Event of Default, or any event which, with the giving of
notice or passage of time, or both, would constitute an Event or Default,
with respect to the ROARS shall have occurred and be continuing or an
Event of Default or any event which, with the giving of notice or passage
of time, or both, would constitute an Event of Default with respect to any
derivative transaction between the Company and the Remarketing Dealer
effected pursuant to an ISDA Master Agreement between the Company and the
Remarketing Dealer;
(vi) a material adverse change in the consolidated financial
condition, stockholders' equity, results of operations, business or
prospects of the Company and its subsidiaries taken as a whole the effect
of which is such as to make it, in the judgment of the Remarketing Dealer,
impracticable to remarket the ROARS or to enforce contracts for the sale
of ROARS, shall have occurred since the applicable Notification Date or
since the respective dates as of which information is given in the 1934
Act Documents;
(vii) if a prospectus is required under the 1933 Act to be delivered
in connection with the remarketing of the ROARS, the Company shall fail to
furnish to the Remarketing Dealer on any Remarketing Date the officer's
certificate, opinion and comfort letter referred to in Section 3(e) of
this Agreement and such other documents and opinions as counsel for the
Remarketing Dealer may reasonably require for the purpose of enabling such
counsel to pass upon the sale of ROARS in a remarketing as herein
contemplated and related proceedings, or in order to evidence the accuracy
and completeness of any of the representations and warranties, or the
fulfillment of any of the conditions, herein contained; or
(viii) if no Reference Dealer shall have provided the Remarketing
Dealer with a Bid by 3:30 p.m., New York City time, on any Determination
Date.
In furtherance of the foregoing, the effectiveness of the Remarketing
Dealer's election on the Notification Date to remarket the ROARS shall be
subject to the condition that the Remarketing Dealer shall have received a
certificate of the Chairman of the Board, the President, the Chief Financial
Officer or a Vice President of the Company, and the Treasurer or an Assistant
Treasurer of the Company, dated as of the Notification Date, to the effect that
(i) the Company has, prior to the Remarketing Dealer's election on the
Notification Date to remarket the ROARS, provided the Remarketing Dealer with
notice of all events as required under Section 3(a) of this Agreement, (ii) the
representations and warranties of the Company in this Agreement are true and
correct in all material respects at and as of the Notification Date and (iii)
the
15
Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to the Notification Date.
Such certificate shall be delivered by the Company to the Remarketing Dealer as
soon as practicable following notification by the Remarketing Dealer to the
Company on the Notification Date of its election to remarket the ROARS and in
any event prior to the first Determination Date.
In the event of the failure of any of the foregoing conditions, the
Remarketing Dealer may terminate its obligations under this Agreement or
redetermine any of the Floating Period Interest Rates and/or the Interest Rate
to Maturity as provided in Section 12.
Section 10. Indemnification.
(a) The Company agrees to indemnify and hold harmless the Remarketing
Dealer and its officers, directors and employees and each person, if any, who
controls the Remarketing Dealer within the meaning of Section 20 of the 1934
Act as follows:
(i) against any loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of (A) any untrue statement or
alleged untrue statement of a material fact contained in any of the
Remarketing Materials (including any incorporated documents), or (B) the
omission or alleged omission therefrom of a material fact necessary to
make the statements therein, in the light of the circumstances in which
they were made, not misleading, or (C) any violation by the Company of, or
any failure by the Company to perform any of its obligations under, this
Agreement, or (D) the acts or omissions of the Remarketing Dealer in
connection with its duties and obligations hereunder except to the extent
finally judicially determined to be due to its gross negligence or willful
misconduct;
(ii) against any loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever arising out of, or based upon, any of items (A) through (D) in
clause (i) above; provided, that (subject to clause (d) below) such
settlement is effected with the written consent of the Company, which
consent shall not be unreasonably withheld; and
(iii) against any expense whatsoever, as incurred (including the fees
and disbursements of counsel chosen by the Remarketing Dealer), reasonably
incurred in investigating, preparing or defending against any litigation
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever arising out of, or based
upon, any of items (A) through (D) in clause (i) above to the extent that
any such expense is not paid under clause (i) or (ii) above; provided,
that the foregoing indemnity shall not apply to any losses, liabilities,
claims, damages and expenses to the extent arising out of any untrue
statement or omission made in reliance
16
upon and in conformity with written information furnished to the Company
by the Remarketing Dealer expressly for use in the Remarketing Materials.
(b) The Remarketing Dealer agrees to indemnify and hold harmless the
Company, its directors and each of its officers who signed the Registration
Statement from and against any loss, liability, claim, damage and expense
whatsoever, as incurred, and will reimburse the expenses reasonably incurred in
investigating or defending against any such loss, liability, claim, damage and
expense, as incurred but only with respect to untrue statements or omissions
made in Remarketing Materials in reliance upon and in conformity with
information furnished to the Company in writing by the Remarketing Dealer
expressly for use in such Remarketing Materials. The indemnity agreement in
this clause (b) shall extend upon the same terms and conditions to each person,
if any, who controls the Company within the meaning of Section 20 of the 1934
Act.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. In the case of parties
indemnified pursuant to clause (a) above, counsel to the indemnified parties
shall be selected by the Company, and, in the case of parties indemnified
pursuant to clause (b) above, counsel to the indemnified parties shall be
selected by the Remarketing Dealer. An indemnifying party may participate at
its own expense in the defense of any such action; provided that counsel to the
indemnifying party shall not (except with the consent of the indemnified party)
also be counsel to the indemnified party. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition
to any local counsel) separate from their own counsel for all indemnified
parties in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent
of the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 10 or 11 hereof (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from
all liability arising out of such litigation, investigation, proceeding or
claim and (ii) does not include a statement as to an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by clause (a) (ii) effected without its
written consent if (i) such settlement is entered into more than 90 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall
17
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
(e) The indemnity agreement contained in this Section 10 shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of the Remarketing Dealer, and shall survive the termination or
cancellation of this Agreement and the remarketing of any ROARS hereunder.
Section 11. Contribution. If the indemnification provided for in Section
10 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Remarketing Dealer on the other hand from the remarketing of the
ROARS pursuant to this Agreement or (ii) if the allocation provided by clause
(i) is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and of the Remarketing Dealer
on the other hand in connection with the acts, failures to act, statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Remarketing Dealer on the other hand in connection with the remarketing of the
ROARS pursuant to this Agreement shall be deemed to be in the same respective
proportions as (i) the aggregate principal amount of the ROARS, and (ii) the
aggregate positive difference, if any, between the price paid by the
Remarketing Dealer for the ROARS tendered on a Remarketing Date and the price
at which the ROARS are sold by the Remarketing Dealer in the remarketing.
The relative fault of the Company on the one hand and the Remarketing
Dealer on the other hand shall be determined by reference to, among other
things, the responsibility hereunder of the applicable party for any act or
failure to act relating to the losses, liabilities, claims, damages or expenses
incurred or, in the case of any losses, liabilities, claims, damages or
expenses arising out of any untrue or alleged untrue statement of a material
fact contained in any of the Remarketing Materials or the omission or alleged
omission to state a material fact therefrom, whether any such untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the Remarketing
Dealer and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Remarketing Dealer agree that it would not be just and
equitable if contribution pursuant to this Section 11 were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to
18
above in this Section 11. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to above in
this Section 11 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such act or failure to act or untrue or alleged untrue statement
or omission or alleged omission.
Notwithstanding the provisions of this Section 11, the Remarketing Dealer
shall not be required to contribute any amount in excess of the amount by which
the total price at which the ROARS remarketed by it and resold to the public
were sold to the public exceeds the amount of any damages which the Remarketing
Dealer has otherwise been required to pay by reason of any act or failure to
act for which it is responsible hereunder or any untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 11, each person, if any, who controls the
Remarketing Dealer within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the
Remarketing Dealer, and each director of the Company, each officer of the
Company who signed any Offering Document, and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Company.
Section 12. Termination of or Redetermination of
Interest Rate to Maturity.
(a) The obligations of the Remarketing Dealer under this Agreement shall
terminate with respect to the ROARS on the effective date of the resignation of
the Remarketing Dealer pursuant to Section 6 hereof with respect to the ROARS
or the repurchase of the ROARS by the Company pursuant to Section 4(h) hereof
or the redemption of the ROARS by the Company pursuant to Section 4(i) hereof
or a combination of the two which results in all of the ROARS being repurchased
or redeemed by the Company.
(b) In addition, the Remarketing Dealer may terminate all of its
obligations under this Agreement with respect to the ROARS, or in its sole
discretion, its obligations to purchase and remarket the ROARS, immediately by
notifying the Company and the Trustee of its election to do so, at any time on
or before any Remarketing Date, in the event that with respect to the ROARS,
(i) any of the conditions referred to or set forth in Section 9(a), (b) or (c)
hereof (to the extent they are required to be met or satisfied at such time)
have not been met or satisfied in full, (ii) any of the events set forth in
Section 9(d) shall have occurred after the Remarketing Dealer elects on the
Notification Date to remarket the ROARS, (iii) the
19
Remarketing Dealer determines, in its sole discretion, after consultation with
the Company, that it shall not have received all of the information, whether or
not specifically referenced herein, necessary to fulfill its obligations under
this Agreement with respect to the ROARS, or (iv) an Event of Default with
respect to the ROARS has occurred and is continuing.
(c) Notwithstanding any provision herein to the contrary, in lieu of
terminating this Agreement pursuant to Section 12(b) above, upon the occurrence
of any of the events set forth therein, the Remarketing Dealer, in its sole
discretion at any time between any Determination Date and 3:30 p.m., New York
City time, on the Business Day immediately preceding any Remarketing Date, may
elect to purchase the ROARS for remarketing and determine a new Floating Period
Interest Rate or Interest Rate to Maturity in the manner provided in Section
4(d) of this Agreement, except that for purposes of determining the new
Floating Period Interest Rate or Interest Rate to Maturity pursuant to this
paragraph the Determination Date referred to therein shall be the date of such
election and redetermination. The Remarketing Dealer shall notify the Company,
the Trustee and DTC by telephone, confirmed in writing (which may include
facsimile or other electronic transmission), by 4:00 p.m., New York City time,
on the date of such election, of the new Floating Period Interest Rate or
Interest Rate to Maturity, as the case may be, of the ROARS. Thereupon, such
new Floating Period Interest Rate or Interest Rate to Maturity shall supersede
and replace any Floating Period Interest Rate or Interest Rate to Maturity
previously determined by the Remarketing Dealer and, absent manifest error,
shall be binding and conclusive upon the Beneficial Owners and Holders of the
ROARS on and after such Remarketing Date, the Company and the Trustee;
provided, that the Remarketing Dealer, by redetermining the Floating Period
Interest Rate or Interest Rate to Maturity upon the occurrence of any event set
forth in Section 12(b) as set forth above, shall not thereby be deemed to have
waived its right to determine a new Floating Period Interest Rate or Interest
Rate to Maturity or terminate this Agreement upon the occurrence of any other
event set forth in Section 12(b).
(d) If this Agreement is terminated pursuant to this Section 12, such
termination shall be without liability of any party to any other party, except
that, in the case of termination pursuant to Section 12(b) of this Agreement,
the Company shall reimburse the Remarketing Dealer for all of its reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Remarketing Dealer, and except as further set forth in Section
12(e) below. Sections 1, 10, 11, 12(d), and 12(e) shall survive such
termination and remain in full force and effect.
(e) As soon as practicable following either (i) termination of this
Agreement pursuant to Section 12(b), (ii) the occurrence, prior to the
Remarketing Dealer's election on the Notification Date to remarket the ROARS,
of any event set forth in Section 9(d)(ii), or (iii) any failure by the Company
to redeem such ROARS from the Remarketing Dealer following any election by the
Company to effect such redemption as specified in Section 4(i) (each a
"Calculation Event"), the Remarketing Dealer shall determine, in good faith and
on a commercially reasonable basis, the Calculation Amount (as defined below),
and shall promptly notify the Company of such Calculation Amount in writing
(which may include facsimile or
20
other electronic transmission) and shall provide the Company with documentation
explaining how it determined the Calculation Amount (the date on which such
notice and documentation is given, the "Calculation Amount Notice Date"). The
"Calculation Amount" shall be equal to an amount, if any, that, as of the date
of its determination, would be paid by the Remarketing Dealer in consideration
of an agreement between the Remarketing Dealer and a Reference Dealer (other
than the Remarketing Dealer) to enter into a transaction that would have the
effect of preserving for the Remarketing Dealer the economic equivalent of any
payment or delivery (whether the underlying obligation was absolute or
contingent) by the Remarketing Dealer and Beneficial Owners that would, but for
the occurrence of the Calculation Event, have been required on a Remarketing
Date; the Calculation Amount shall be determined based on the assumption that
the ROARS are obligations issued by the United States Department of the
Treasury backed by the full faith and credit of the United States of America.
Unless, within three Business Days after the Calculation Amount Notice
Date, the Company notifies the Remarketing Dealer in writing that it has
determined in good faith (based on market conditions on the Calculation Amount
Notice Date), and after giving the Remarketing Dealer the reasonable
opportunity to explain how the Calculation Amount was determined and to correct
any errors, that it disagrees with the Remarketing Dealer's calculation or
determination of the Calculation Amount (the "Notice of Disagreement"), the
Company shall promptly pay the Remarketing Dealer, in same-day funds by wire
transfer to an account designated by the Remarketing Dealer, the Calculation
Amount as so determined by the Remarketing Dealer, and shall thereafter have no
further obligation to pay any Dollar Price with respect to the ROARS.
If a Notice of Disagreement is so delivered by the Company to the
Remarketing Dealer, the Remarketing Dealer and the Company shall jointly
request, as soon as reasonably practicable, firm quotations for the Calculation
Amount from five Reference Dealers (one of which shall be the Remarketing
Dealer) that are mutually agreeable to the Company and the Remarketing Dealer
(such Reference Dealers (including the Remarketing Dealer) shall determine such
quotations, to the extent reasonably practicable, as of the same day and same
time on or as reasonably practicable after the date of the Notice of
Disagreement). If more than three quotations are provided, the Calculation
Amount shall be the arithmetic mean of the quotations, without regard to the
quotations having the highest and lowest values (if more than one quotation has
the same highest value or lowest value, then one of such quotations shall be
disregarded). If exactly three quotations are provided, the Calculation Amount
shall be the arithmetic mean of all three quotations. If at least three
quotations shall have been provided by 4:00 p.m. on the Business Day after the
date of the Notice of Disagreement, the Company shall promptly pay the
Remarketing Dealer, in same-day funds by wire transfer to an account designated
by the Remarketing Dealer, the Calculation Amount as so determined, and shall
thereafter have no further obligation to pay any Dollar Price with respect to
the ROARS.
If at least three quotations from mutually agreeable Reference Dealers are
not obtained by 4:00 p.m. on the Business Day after the date of the Notice of
Disagreement, the Calculation Amount as originally determined by the
Remarketing Dealer, absent manifest error, shall be conclusive and binding and
the Company shall promptly pay the Remarketing Dealer, in same-day
21
funds by wire transfer to an account designated by the Remarketing Dealer, such
amount, and shall thereafter have no further obligation to pay any Dollar Price
with respect to the ROARS.
(f) This Agreement shall not be subject to termination by the Company.
Section 13. Remarketing Dealer's Performance; Duty of Care. The duties and
obligations of the Remarketing Dealer shall be determined solely by the express
provisions of this Agreement and the Indenture. No implied covenants or
obligations of or against the Remarketing Dealer shall be read into this
Agreement or the Indenture. In the absence of bad faith on the part of the
Remarketing Dealer, the Remarketing Dealer may conclusively rely upon any
document furnished to it, which purports to conform to the requirements of this
Agreement and the Indenture, as to the truth of the statements in any of such
documents. The Remarketing Dealer shall be protected in acting upon any
document or communication reasonably believed by it to have been signed,
presented or made by the proper party or parties. The Remarketing Dealer shall
incur no liability to the Company or to any Beneficial Owner or Holder of ROARS
in its individual capacity or as Remarketing Dealer for any action or failure
to act in connection with remarketing or otherwise, except as a result of gross
negligence or willful misconduct on its part.
Section 14. Treatment of the ROARS. It is the intent of the Company, that
for purposes of United States federal, state, local and any other income taxes,
the ROARS will be treated as fixed rate debt instruments maturing on the first
Remarketing Date. Unless otherwise required by the appropriate tax authorities,
the Company will treat the ROARS consistent with their characterization.
Section 15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE.
Section 16. Term of Agreement. Unless otherwise terminated in accordance
with the provisions hereof, this Agreement shall remain in full force and
effect from the date hereof until the earlier of the first day thereafter on
which no ROARS are outstanding or the Fixed Rate Remarketing Date. Regardless
of any termination of this Agreement pursuant to any of the provisions hereof,
the obligations of the Company pursuant to Sections 10, 11 and 12 hereof shall
remain operative and in full force and effect until fully satisfied.
Section 17. Successors and Assigns. The rights and obligations of the
Company hereunder may not be assigned or delegated to any other person without
the prior written consent of the Remarketing Dealer. The rights and obligations
of the Remarketing Dealer hereunder may not be assigned or delegated to any
other person without the prior written consent of the Company, except that the
Remarketing Dealer may assign or delegate its rights and obligations hereunder
in whole or in part to an affiliate, in each case, without the prior written
consent of the Company. This Agreement shall inure to the benefit of and be
binding
22
upon the Company and the Remarketing Dealer and their respective successors and
assigns, and will not confer any benefit upon any other person, partnership,
association or corporation other than persons, if any, controlling the
Remarketing Dealer within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act, or any indemnified party to the extent provided in Section
10 hereof, or any person entitled to contribution to the extent provided in
Section 11 hereof. The terms "successors" and "assigns" shall not include any
purchaser of any ROARS because of such purchase.
Section 18. Headings. Section headings have been inserted in this
Agreement as a matter of convenience of reference only, and it is agreed that
such section headings are not a part of this Agreement and will not be used in
the interpretation of any provisions of this Agreement.
Section 19. Severability. If any provision of this Agreement shall be held
or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as
applied in any particular case in any or all jurisdictions because it conflicts
with any provision of any constitution, statute, rule or public policy or for
any other reason, such circumstances shall not have the effect of rendering the
provision in question invalid, inoperative or unenforceable in any other case,
circumstance or jurisdiction, or of rendering any other provision or provisions
of this Agreement invalid, inoperative or unenforceable to any extent
whatsoever.
Section 20. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be regarded as an original and all of which
shall constitute one and the same document.
Section 21. Amendments. This Agreement may be amended by any instrument in
writing signed by each of the parties hereto so long as this Agreement as
amended is not inconsistent with the Indenture in effect as of the date of any
such amendment.
Section 22. Notices. Unless otherwise specified, any notices, requests,
consents or other communications given or made hereunder or pursuant hereto
shall be made in writing (which may include facsimile or other electronic
transmission) and shall be deemed to have been validly given or made when
delivered or mailed, registered or certified mail, return receipt requested and
postage prepaid, addressed as follows:
(a) to the Company:
The AES Corporation
0000 X. 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: General Counsel
23
(b) to Banc of America:
Banc of America Securities LLC
Bank of America Corporate Center
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Syndicate
or to such other address as the Company or the Remarketing Dealer shall
specify in writing.
24
IN WITNESS WHEREOF, each of the Company and the Remarketing Dealer has
caused this to be executed in its name and on its behalf
by one of its duly authorized officers as of the date first above written.
THE AES CORPORATION
By:
--------------------------------
Name:
Title:
BANC OF AMERICA SECURITIES LLC
By:
--------------------------------
Name:
Title:
25
