CONFORMED COPY
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AES CHINA GENERATING CO. LTD.
AND
BANKERS TRUST COMPANY,
AS TRUSTEE
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INDENTURE
DATED AS OF DECEMBER 19, 1996
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$180,000,000
10 1/8% NOTES DUE 2006
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TABLE OF CONTENTS
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PAGE
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
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SECTION 1.01. DEFINITIONS .................................................. 1
SECTION 1.02. OTHER DEFINITIONS ............................................ 18
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT............. 19
SECTION 1.04. RULES OF CONSTRUCTION......................................... 19
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING............................................... 20
SECTION 2.02. EXECUTION AND AUTHENTICATION.................................. 20
SECTION 2.03. REGISTRAR AND PAYING AGENT.................................... 21
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST........................... 21
SECTION 2.05. NOTEHOLDER LISTS.............................................. 22
SECTION 2.06. TRANSFER AND EXCHANGE; DEFINITIVE NOTE........................ 22
SECTION 2.07. REPLACEMENT NOTES............................................. 24
SECTION 2.08. OUTSTANDING NOTES............................................. 24
SECTION 2.09. DETERMINATION OF HOLDERS' ACTION.............................. 25
SECTION 2.10. TEMPORARY NOTES............................................... 25
SECTION 2.11. CANCELLATION.................................................. 25
SECTION 2.12. DEFAULTED INTEREST............................................ 25
ARTICLE 3
COVENANTS
SECTION 3.01. PAYMENT OF NOTES.............................................. 25
SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY............................... 26
SECTION 3.03. LIMITATION ON RESTRICTED PAYMENTS............................. 27
SECTION 3.04. LIMITATION ON INCURRENCE OF INDEBTEDNESS...................... 29
SECTION 3.05 LIMITATION ON PAYMENT RESTRICTIONS AFFECTING PROJECT COMPANIES 31
SECTION 3.06. PAYMENT OF ADDITIONAL AMOUNTS................................. 32
SECTION 3.07. LIMITATION ON LIENS........................................... 33
SECTION 3.08. CHANGE OF CONTROL............................................. 35
SECTION 3.09. COMPLIANCE CERTIFICATE........................................ 37
SECTION 3.10. COMMISSION REPORTS............................................ 37
SECTION 3.11. LIMITATION ON TRANSACTIONS WITH AFFILIATES.................... 38
SECTION 3.12. LIMITATIONS ON SALES OF ASSETS AND REFINANCINGS............... 39
SECTION 3.13. MAINTENANCE OF CERTAIN CASH PROCEEDS.......................... 42
SECTION 3.14. PAYMENT OF STAMP DUTY AND OTHER TAXES......................... 42
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SECTION 3.15. PAYMENT OF TAXES AND OTHER CLAIMS............................. 42
SECTION 3.16. NOTICE OF DEFAULTS AND OTHER EVENTS........................... 42
SECTION 3.17. MAINTENANCE OF INSURANCE...................................... 42
SECTION 3.18. LIMITATION ON ISSUANCE OF SUBSIDIARY CAPITAL STOCK............ 43
SECTION 3.19. LIMITATION ON CHANGES IN THE NATURE OF THE BUSINESS........... 43
SECTION 3.20. LIMITATION ON CERTAIN SUBSIDIARY INVESTMENTS.................. 43
SECTION 3.21. GOVERNMENT APPROVALS.......................................... 43
SECTION 3.22. COMPLIANCE WITH LAWS.......................................... 44
SECTION 3.23. OPERATIONS AND MAINTENANCE.................................... 44
ARTICLE 4
CONSOLIDATION AND MERGER
SECTION 4.01. MERGER AND CONSOLIDATION...................................... 44
SECTION 4.02. SUCCESSOR SUBSTITUTED......................................... 45
ARTICLE 5
DEFAULTS AND REMEDIES
SECTION 5.01. EVENTS OF DEFAULT............................................. 46
SECTION 5.02. ACCELERATION.................................................. 48
SECTION 5.03. OTHER REMEDIES................................................ 48
SECTION 5.04. WAIVER OF PAST DEFAULTS....................................... 48
SECTION 5.05. CONTROL BY MAJORITY........................................... 49
SECTION 5.06. LIMITATION ON SUITS........................................... 49
SECTION 5.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.......................... 49
SECTION 5.08. COLLECTION SUIT BY TRUSTEE.................................... 50
SECTION 5.09. TRUSTEE MAY FILE PROOFS OF CLAIM.............................. 50
SECTION 5.10. PRIORITIES.................................................... 50
SECTION 5.11. UNDERTAKING FOR COSTS......................................... 51
SECTION 5.12. WAIVER OF STAY OR EXTENSION LAWS.............................. 51
ARTICLE 6
TRUSTEE
SECTION 6.01. DUTIES OF TRUSTEE............................................. 51
SECTION 6.02. RIGHTS OF TRUSTEE............................................. 52
SECTION 6.03. INDIVIDUAL RIGHTS OF TRUSTEE.................................. 53
SECTION 6.04. TRUSTEES DISCLAIMER........................................... 53
SECTION 6.05. NOTICE OF DEFAULTS............................................ 53
SECTION 6.06. REPORTS BY TRUSTEE TO HOLDERS................................. 53
SECTION 6.07. COMPENSATION AND INDEMNITY.................................... 53
SECTION 6.08. REPLACEMENT OF TRUSTEE........................................ 54
SECTION 6.09. SUCCESSOR TRUSTEE BY MERGER, ETC.............................. 55
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SECTION 6.10. ELIGIBILITY; DISQUALIFICATION................................. 55
SECTION 6.11. PREFERENTIAL COLLECTIONS OF CLAIMS AGAINST COMPANY............ 55
ARTICLE 7
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 7.01. DISCHARGE OF LIABILITY ON NOTES; DEFEASANCE................... 56
SECTION 7.02. DEFEASANCE AND DISCHARGE OF INDENTURE......................... 56
SECTION 7.03. DEFEASANCE OF CERTAIN OBLIGATIONS............................. 58
SECTION 7.04. APPLICATION OF TRUST MONEY.................................... 59
SECTION 7.05. REPAYMENT TO COMPANY.......................................... 59
SECTION 7.06. REINSTATEMENT................................................. 60
ARTICLE 8
AMENDMENTS AND SUPPLEMENTS
SECTION 8.01. WITHOUT CONSENT OF HOLDERS.................................... 60
SECTION 8.02. WITH CONSENT OF HOLDERS....................................... 61
SECTION 8.03. SUPPLEMENTAL INDENTURES....................................... 62
SECTION 8.04. REVOCATION AND EFFECT OF CONSENTS............................. 62
SECTION 8.05. NOTATION ON OR EXCHANGE OF NOTES.............................. 62
SECTION 8.06. TRUSTEE TO SIGN AMENDMENTS.................................... 63
SECTION 8.07. FIXING OF RECORD DATES........................................ 63
ARTICLE 9
SECURITY AGREEMENT
SECTION 9.01. SECURITY AGREEMENT............................................ 63
SECTION 9.02. HOLDERS' CONSENT.............................................. 64
SECTION 9.03. TRUST INDENTURE ACT OF 1939 REQUIREMENTS...................... 64
SECTION 9.04. RELEASE UPON TERMINATION OF THE COMPANY'S OBLIGATIONS......... 64
SECTION 9.05. RETIREMENT OF NOTES........................................... 64
ARTICLE 10
REDEMPTION
SECTION 10.01. NOTICE TO TRUSTEE............................................ 65
SECTION 10.02. SELECTION OF NOTES TO BE REDEEMED............................ 66
SECTION 10.03. NOTICE OF REDEMPTION......................................... 66
SECTION 10.04. EFFECT OF NOTICE OF REDEMPTION............................... 67
SECTION 10.05. DEPOSIT OF REDEMPTION PRICE.................................. 67
SECTION 10.06. NOTES REDEEMED IN PART....................................... 67
SECTION 10.07. OPTIONAL REDEMPTION FOR CHANGES IN WITHHOLDING TAXES......... 67
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ARTICLE 11
MISCELLANEOUS
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SECTION 11.01. TRUST INDENTURE ACT CONTROLS................................. 68
SECTION 11.02. NOTICES...................................................... 68
SECTION 11.03. COMMUNICATION BY HOLDERS WITIH OTHER HOLDERS................. 69
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT........... 69
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION................ 69
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.................................. 69
SECTION 11.07. SUCCESSORS; NO RECOURSE AGAINST OTHERS....................... 70
SECTION 11.08. DUPLICATE ORIGINALS.......................................... 70
SECTION 11.09. OTHER PROVISIONS............................................. 70
SECTION 11.10. GOVERNING LAW................................................ 70
SECTION 11.11. CONSENT TO JURISDICTION...................................... 70
SECTION 11.12. JUDGMENT CURRENCY............................................ 71
SECTION 11.13. EFFECT OF HEADINGS........................................... 71
SECTION 11.14. WAIVER OF IMMUNITY........................................... 71
SECTION 11.15. TAX CONSIDERATIONS........................................... 72
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EXHIBIT A - FORM OF NOTE
iv
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INDENTURE dated as of December 19, 1996, between AES China Generating
Co. Ltd., a corporation established under the laws of Bermuda (the "Company")
and Bankers Trust Company, a New York banking corporation, as trustee (the
"Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the holders of the Company's 10 1/8 % Notes
Due 2006:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person existing at the
time at which such Person became a Subsidiary and not incurred in connection
with, or in contemplation of, such Person becoming a Subsidiary. Acquired
Indebtedness shall be deemed to be Incurred on the date the acquired Person
becomes a Project Company.
"ADDITIONAL AMOUNTS" has the meaning set forth in Section 3.06 hereof.
Any reference in this Indenture to principal or interest in respect of the Notes
shall be deemed also to refer to any Additional Amounts that may be payable as
set forth herein and under the Notes.
"ADDITIONAL ASSETS" means (i) any property or assets related to the
Line of Business which will be owned and used by the Company or a Project
Company, (ii) the Capital Stock of a Person that becomes a Project Company as a
result of the acquisition of such Capital Stock by the Company or another
Project Company, or (iii) Capital Stock in any Person that at the time of
acquisition of such Capital Stock is a Project Company.
"ADJUSTED CASH FLOW" means, for any period, the excess of (A) the
aggregate amount (without duplication ) of (i) dividends, distributions,
payments of interest and scheduled repayments of loans or advances, in each
case, that are received by the Company and its Wholly Owned Subsidiaries from
the Project Companies during such period, (ii) 50% of the dividends,
distributions, payments of interest and scheduled repayments of loans or
advances, in each case, that are received by the Company and its Wholly Owned
Subsidiaries from any Person other than a Project Company during such period,
(iii) all payments received by the Company and its Wholly Owned Subsidiaries
during such period from any Person with respect to agreements to provide
development, construction or operations management and the provision of
consulting or advisory services; (iv) 50% of the combined interest income of the
Company and its Wholly Owned Subsidiaries for such period from cash, cash
equivalents and investments in marketable securities; (v) the interest income
(net of interest expense) of the Company and its Wholly Owned Subsidiaries from
the transactions referred to in clause (viii) of the definition of Permitted
Investments over (B) the aggregate amount (without duplication) of (i) the
combined selling, general and administrative expenses of the Company and its
Wholly Owned Subsidiaries for such period determined in accordance with GAAP and
(ii) the Company Designated Costs for such period and (iii) the total income
taxes paid by the Company and its Wholly Owned Subsidiaries during such period.
"ADJUSTED INTEREST EXPENSE" means, for any period, the sum of (without
duplication) (a) the combined interest expense of the Company and its Wholly
Owned Subsidiaries for such period as determined in accordance with GAAP,
including, without limitation or duplication, (i) amortization of debt issuance
costs or of original issue discount on any Indebtedness and the interest portion
of any deferred payment obligation, calculated in accordance with the effective
interest method of accounting, (ii) accrued interest, (iii) noncash interest
payments, (iv) commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing, (v) interest
actually paid by the Company or any Wholly Owned Subsidiary under any guarantee
of Indebtedness or other obligation of any other Person and (vi) net costs
associated with Interest Rate Agreements (including amortization of discounts)
and Currency Agreements of the Company or any Wholly Owned Subsidiary relating
to Indebtedness, plus (b) all but the principal component of rentals in respect
of Capitalized Lease Obligations paid, accrued, or scheduled to be paid or
accrued by the Company or any Wholly Owned Subsidiary, plus (c) capitalized
interest, plus (d) dividends paid in respect of Preferred Stock of the Company
or any Wholly Owned Subsidiary held by Persons other than the Company or any
Wholly Owned Subsidiary, plus (e) cash contributions to any employee stock
ownership plan to the extent such contributions are used by such employee stock
ownership plan to pay interest or fees to any person (other than the Company) in
connection with loans Incurred by such employee stock ownership plan to purchase
Capital Stock of the Company, plus (f) the interest expense of any Project
Company to the extent attributable to any Indebtedness of such Project Company
to the extent guaranteed by the Company or any Wholly Owned Subsidiary, minus
(g) interest expense of the Company or any Wholly Owned Subsidiary attributable
to Indebtedness referred to in clause (viii) of the definition of "Permitted
Investments."
"AES" means The AES Corporation, a Delaware corporation, its
successors, and any Subsidiary thereof.
"AFFILIATE" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Section 3.11 only, "Affiliate" shall also mean any beneficial owner
of 5% or more of the total Voting Shares (on a fully Diluted Basis) of the
Company or of rights or warrants to purchase such stock (whether or not
currently exercisable) and any Person who would be an Affiliate of any such
beneficial owner pursuant to the first sentence hereof.
"AGENT" means any Registrar, Paying Agent, authenticating agent,
co-registrar or additional paying agent.
"ASSET SALE" means any sale, transfer or other disposition (including
by way of merger, consolidation or sale leaseback transactions, but excluding
(except as provided for in the provisions described in the last paragraph of
Section 3.12(b)) those permitted by Article 4 hereof and those permitted by
Section 3.03 hereof) in one or a series of transactions by the Company or any
Project Company to any Person other than the Company or any Wholly Owned
Subsidiary, of (i) all or any of the Capital Stock of the Project Company, (ii)
all or substantially all of the assets of any operating unit, Facility or
division of the Company or any Project Company or (iii) any other property or
assets or rights to acquire property or assets of the Company or any Project
Company outside of the ordinary course of business of the Company or such
Project Company.
"ATTRIBUTABLE COSTS" means, for any period, the Company Designated
Costs for such period to the extent that such amount does not exceed an amount
calculated for such period at a rate equal to $10 million per annum (which shall
increase by 5% for each fiscal year beginning on or after December 1, 1997).
"AUTHORIZED OFFICERS" means with respect to the Company, the President,
the Chief Financial Officer and any vice president.
"AVERAGE LIFE" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the products of (A) the numbers of years from the date of determination
to the dates of each successive scheduled principal payment of such Indebtedness
or scheduled redemption or similar payment with respect to such Indebtedness or
Preferred Stock multiplied by (B) the amount of such payment by (ii) the sum of
all such payments.
"BANKRUPTCY CUSTODIAN" means any receiver, trustee, assignee,
liquidator, custodian or similar official under any Bankruptcy Law.
"BANKRUPTCY LAW" means Title 11, United States Code, or any similar
federal or state law or laws of Bermuda for the relief of debtors or the
administration, reorganization or liquidation of debtors' estates for the
benefit of their creditors.
"BERMUDA" means the British colony of Bermuda.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or any
authorized committee thereof.
"BOARD RESOLUTION" means a copy of a resolution certified by a director
of the Company to have been duly adopted by the Board of Directors to be in full
force and effect on the date of such certification, and delivered to the
Trustee.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York are authorized by law to close or
are otherwise not open for business. If any payment date hereunder or under the
Notes is not a Business Day, payment may be made at that place on the next
succeeding day that is a Business Day, and no interest shall accrue for the
intervening period. If a regular record date hereunder or under the Notes is not
a Business Day, the regular record date shall not be affected.
"CAPITAL STOCK" means any and all shares, interests (including joint
venture interests), participations or other equivalents (however designated) of
capital stock of a corporation or any and all equivalent ownership interests in
a Person (other than a corporation).
"CAPITALIZED LEASE" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person; the Stated
Maturity thereof shall be the date of the last payment of rent or any other
amount due under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty; and "Capitalized Lease
Obligations" means the rental obligations, as aforesaid, under such lease.
"CHANGE OF CONTROL" means the occurrence of any of the following
events: (i) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than AES or an underwriter engaged in a firm commitment
underwriting on behalf of the Company, is or becomes the beneficial owner (as
such term is used in Rules 13d-3 and 13d-5 under the Exchange Act, except that
for purposes of this clause (i) a person shall be deemed to have beneficial
ownership of all shares that such person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time), directly or
indirectly, of more than 35% of the total outstanding shares of Class A Common
Stock; (ii) AES is no longer entitled to elect at least one half of the members
of the Board of Directors; (iii) AES ceases to be the beneficial owner (as such
term is used in Rules 13d-3 and 13d-5 under the Exchange Act) of at least
6,000,000 Voting Shares of the Company (as adjusted from time to time for any
stock dividends, splits or recombinations after the Issue Date); or (iv) during
any period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors (together with any new directors whose
election by the Board of Directors or whose nomination for election by the
stockholders was approved by a vote of 66-2/3% of the directors of the Company
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of Directors then in
office.
"CHANGE OF CONTROL TRIGGERING EVENT" means either (x) the occurrence of
both an event specified in clause (i) or (iv) of the definition of Change of
Control and a Rating Decline or (y) the occurrence of an event specified in
clause (ii) or (iii) of the definition of Change of Control.
"CLASS A COMMON STOCK" means the Class A Common Stock, par value $0.01
per share, of the Company.
"CLASS B COMMON STOCK" means the Class B Common Stock, par value $0.01
per share, of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" has the meaning set forth in the Security Agreement.
"COLLATERAL ACCOUNT" has the meaning set forth in the Security
Agreement.
"COLLATERAL AGENT" means Bankers Trust Company as collateral agent, and
any successor thereof, under the Security Agreement.
"COMMISSION" means the Securities and Exchange Commission.
"COMPANY" means AES China Generating Co. Ltd., a Bermuda corporation,
until a successor replaces it pursuant to the terms and conditions of this
Indenture and thereafter means the successor.
"COMPANY DESIGNATED COSTS" means the total costs of development,
construction or operations management and the provision of consulting or
advisory services incurred by the Company and its Wholly Owned Subsidiaries (net
of any amounts received in reimbursement of such costs to the extent not in
excess of such costs).
"CONSOLIDATED CURRENT LIABILITIES," as of the date of determination,
means the aggregate amount of liabilities of the Company and its Consolidated
Restricted Subsidiaries which may properly be classified as current liabilities
(including taxes accrued as estimated), after eliminating (i) all inter-company
items between the Company and any Consolidated Subsidiary and (ii) deducting all
current maturities of long-term Indebtedness, all as determined in accordance
with GAAP.
"CONSOLIDATED NET INCOME (LOSS)" means, for any period, as applied to
the Company, the consolidated net income (loss) of the Company and its
Consolidated Restricted Subsidiaries for such period, determined in accordance
with GAAP, adjusted by excluding (without duplication), to the extent included
in such net income (loss), the following: (i) all extraordinary gains or losses;
(ii) any net income of any Person (other than the Company and its Consolidated
Restricted Subsidiaries), except that (A) the Company's equity in the net income
of any such Person for such period shall be included in Consolidated Net Income
(Loss) up to the aggregate amount of cash actually distributed by such Person
during such period to the Company or a Restricted Subsidiary as a dividend or
other distribution and (B) the equity of the Company or a Restricted Subsidiary
in a net loss of any such Person for such period shall be included in
determining Consolidated Net Income (Loss); (iii) the net income of any
Restricted Subsidiary to the extent that the declaration or payment of dividends
or similar distributions by such Restricted Subsidiary of such income is not at
the time thereof permitted, directly or indirectly, by operation of the terms of
its charter or bye-laws or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Restricted
Subsidiary or its stockholders; (iv) any net income (or loss) of any Person
combined with the Company or any of its Restricted Subsidiaries on a "pooling of
interests" basis attributable to any period prior to the date of such
combination; and (v) any gain (but not loss) realized upon the sale or other
disposition of any property, plant or equipment of the Company or its Restricted
Subsidiaries (including pursuant to any sale-and-leaseback arrangement) which is
not sold or otherwise disposed of in the ordinary course of business and any
gain (but not loss) realized upon the sale or other disposition by the Company
or any Restricted Subsidiary of any Capital Stock of any Person, provided that
losses shall be included on an after-tax basis; and further adjusted by
subtracting from such net income the tax liability of any parent of the Company
to the extent of payments made to such parent by the Company pursuant to any tax
sharing agreement or other arrangement for such period.
"CONSOLIDATED NET TANGIBLE ASSETS" means, as of any date of
determination, as applied to the Company, the total amount of assets (less
accumulated depreciation or amortization, allowances for doubtful receivables,
other applicable reserves and other properly deductible items) as set forth on
the most recently available quarterly or annual consolidated balance sheet of
the Company and its Consolidated Restricted Subsidiaries, determined in
accordance with GAAP, and after giving effect to purchase accounting and after
deducting therefrom, to the extent otherwise included, the amounts of: (i)
Consolidated Current Liabilities; (ii) minority interests in Consolidated
Subsidiaries held by Persons other than the Company or a Restricted Subsidiary;
(iii) excess of cost over fair value of assets of businesses acquired, as
determined in good faith by the Board of Directors as evidenced by a Board
Resolution; (iv) any revaluation or other write-up in value of assets subsequent
to December 31, 1995 as a result of a change in the method of valuation in
accordance with GAAP; (v) unamortized debt discount and expenses and other
unamortized deferred charges, goodwill, patents, trademarks, service marks,
trade names, copyrights, licenses, organization or developmental expenses and
other intangible items; (vi) treasury stock; (vii) any cash set apart and held
in a sinking or other analogous fund established for the purpose of redemption
or other retirement of Capital Stock to the extent such obligation is not
reflected in Consolidated Current Liabilities; and (viii) any Indebtedness of
the Company or a Restricted Subsidiary referred to in clause (viii) of the
definition of Permitted Investments.
"CONSOLIDATED NET WORTH" means, at any date of determination, as
applied to the Company, stockholders' equity as set forth on the most recently
available quarterly or annual consolidated balance sheet of the Company and its
Consolidated Restricted Subsidiaries, less any amounts attributable to
Redeemable Stock or Exchangeable Stock, the cost of treasury stock and the
principal amount of any promissory notes receivable from the sale of Capital
Stock of the Company or any Subsidiary.
"CONSOLIDATION" means, with respect to any Person, the consolidation of
accounts of such Person and each of its subsidiaries if and to the extent the
accounts of such Person and such subsidiaries are consolidated in accordance
with GAAP. The term "Consolidated" shall have a correlative meaning.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any Project Company against fluctuations in currency values to or
under which the Company or any Project Company is a party on the Issue Date or
becomes a party thereafter.
"DEBT SERVICE RESERVE ACCOUNT" has the meaning set forth in the
Security Agreement.
"DEFAULT" means any event which is, or, after notice or passage of time
or both, would be, an Event of Default.
"DEFAULTED INTEREST" means any interest on any Note which is payable,
but is not punctually paid or duly provided for on any Interest Payment Date.
"DEPOSITARY" means The Depository Trust Company, its nominees, and
their respective successors until a successor Depositary shall have become such
pursuant to the applicable provisions of this Indenture and thereafter
"Depositary" shall mean or include each Person who is then a Depositary
hereunder.
"DESIGNATED FINANCING" means any Incurrence of Indebtedness by an
Existing Subsidiary or Existing Joint Venture that refinances Shareholder Loans
in whole or in part.
"DOLLAR PERMITTED INVESTMENTS" means investments which are denominated
and payable in US dollars in any one or more of the following: (i)(a) direct,
interest-bearing obligations of the United States in certificated form; (b)
direct, interest-bearing obligations of, and guaranteed as to timely payment of
principal and interest by, the United States, but only if such obligations are
issued in the form of any entry made on the records of the Federal Reserve Bank
of New York; and (c) direct interest bearing obligations of, and interest
bearing obligations guaranteed as to timely payment of principal and interest
by, the Federal National Mortgage Association, the Government National Mortgage
Association, the Federal Home Loan Mortgage Corporation or the Student Loan
Marketing Association, but only if (A) at the time of investment, such
obligations are assigned the highest credit rating by the Rating Agency and (B)
such obligations have been deposited with The Depository Trust Company and its
successors, or are issued in the form of an entry made on the records of the
Federal Reserve Bank of New York; (ii) certificates of deposit with an original
term to maturity (x) of not more than 180 days or (y) with respect to the
amounts representing the interest payment amounts due on June 15, 1997 or
December 15, 1997, not exceeding the second Business Day prior to such date,
issued by any U.S. depositary institution or trust company whose principal
offices are located in the Borough of Manhattan, City and State of New York, New
York (including the Trustee acting in its individual capacity); provided that
the short-term unsecured debt obligations of such depositary institution or
trust company at the time of such investment are assigned a rating of "A-1" by
S&P and "P1" by Moody's or the long-term unsecured debt obligations of such
depositary institution or trust company at the time of such investment, are
assigned a rating of "A-" or higher by S&P and "A3" or higher by Moody's; (iii)
repurchase obligations pursuant to a written agreement (a) with respect to any
obligation described in clause (i) above, where (in each case) the Trustee has
taken delivery of such obligation and (b) by a U.S. depositary institution or
trust company whose principal offices are located in the Borough of Manhattan,
City and State of New York, New York the short-term unsecured debt obligations
of which are rated "A-1" by S&P and "P-1" by Moody's at the time of such
investment or the long-term unsecured debt obligations of which are rated "A-"
or higher by S&P and "A3" or higher by Moody's (including, if applicable, the
Trustee acting in its individual capacity) at time of such investment; or (iv)
commercial paper that (a) is assigned a rating of "A-1" by S&P and "P-1" by
Moody's at the time of such investment and (b) had an original term to maturity
of not more than 180 days.
"DOLLARS," "$" AND "US DOLLARS" mean United States dollars.
"ELIGIBLE JOINT VENTURE" means a Joint Venture (other than a
Subsidiary) (i) that is formed with respect to the construction, development,
acquisition, servicing, ownership, improvement, operation or management of a
single Facility; (ii) in which the Company, directly or indirectly, owns at
least 25% of the Capital Stock therein and (iii) in respect of which the
Company, directly or indirectly, either (a) controls, by voting power,
membership on the board of directors or management committee or other similar
governing body, or through the provisions of any applicable partnership, joint
venture, shareholder or other similar agreement or under an operating,
maintenance or management agreement or otherwise, the management and operation
of the Joint Venture and any Facility of such Joint Venture or (b) otherwise has
the right to control or veto material acts and decisions with respect to the
management or operation of the Joint Venture that, taken as a whole, are
substantially similar to the rights of the Company with respect to the Existing
Joint Ventures as of the Issue Date.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EXCHANGEABLE STOCK" means any Capital Stock which by its terms is
exchangeable or convertible at the option of any Person other than the Company
into another security (other than Capital Stock of the Company which is neither
Exchangeable Stock nor Redeemable Stock).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXISTING JOINT VENTURE" means any of Chengdu-AES-Kaihua Gas Turbine
Power Co. Ltd., Wuhu Shaoda Electric Power Company Ltd. and Yangchun Fuyang
Diesel Engine Power Co. Ltd., and their respective successors, in each case, so
long as such Person is a Project Company.
"EXISTING PROJECT COMPANY NET CASH FLOW" means, for any period, (A) the
aggregate amount (without duplication) of dividends, distributions, payments of
interest and scheduled repayments of loans or advances (excluding any of such
amounts that constitute Special Proceeds), in each case, that are received by
the Company and its Wholly Owned Subsidiaries from Existing Joint Ventures and
Existing Subsidiaries during such period less (B) the sum of (i) Attributable
Costs for such period, (ii) the aggregate interest expense accrued with respect
to the Notes after June 15, 1998 and (iii) the aggregate principal amount of
Notes purchased from time to time by the Company (other than pursuant to an
Offer or a Change of Control Offer).
"EXISTING SUBSIDIARY" means any of Sichuan Fuling Aixi Power Company
Ltd., Hunan Xiangci-AES Hydro Power Company Ltd., Anhui Liyuan AES Power Company
Limited, the Hefei Zhongli Energy Company Ltd., Jiaozuo Wan Fang Power Ltd.,
Wuxi-AES-CAREC Gas Turbine Power Company Ltd. and Wuxi-AES-Zhonghang Power
Company Ltd., and their respective successors, in each case, so long as such
Person is a Project Company.
"FACILITY" means a power or steam generation facility or energy
producing facility and related assets (including without limitation electric
power transmission facilities or lines).
"FIXED CHARGE COVERAGE RATIO" as of any date of determination means the
ratio of (i) Adjusted Cash Flow for the period of the most recent four
consecutive fiscal quarters for which financial information is available to (ii)
the Adjusted Interest Expense for such period plus the Adjusted Interest Expense
for such period with respect to any Indebtedness proposed to be Incurred by the
Company and its Wholly Owned Subsidiaries; PROVIDED, HOWEVER, that, in making
such computation, the Adjusted Interest Expense attributable to interest on any
Indebtedness bearing a floating interest rate shall be computed on a pro forma
basis as if the rate in effect on the date of computation had been the
applicable rate for the entire period; and provided further, that in the event
(A) of the designation of any Restricted Subsidiary or Restricted Joint Venture
to be an Unrestricted Company during or after such period, or (B) the Company or
any Wholly Owned Subsidiary has made any Asset Sales, Designated Financings or
acquisitions of assets not in the ordinary course of business (including
acquisitions of other Persons by merger, consolidation or purchase of Capital
Stock), or has Incurred or repaid any Indebtedness (or any guarantee thereof has
terminated), during or after such period, or any Project Company has been
designated to be an Unrestricted Company (or redesignated as a Project Company)
during or after such period, such computation shall be made on a pro forma basis
as if such event had taken place on the first day of such period; and provided
further that the Adjusted Cash Flow with respect to any acquisitions shall not
exceed the net income attributable to the acquired assets for such period.
"FULLY DILUTED BASIS" means after giving effect to the exercise of any
outstanding options, warrants or rights to purchase Voting Shares and the
conversion or exchange of any securities convertible into or exchangeable for
Voting Shares.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect and, to the extent optional, adopted by the
Company on the Issue Date, consistently applied, including, without limitation,
those set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board.
"GUARANTEE" means, as applied to any obligation, contingent or
otherwise, of any Person, (i) a guarantee, direct or indirect, in any manner, of
any part or all of such obligation, (other than by endorsement of negotiable
instruments for collection in the ordinary course of business) and (ii) an
agreement, direct or indirect, contingent or otherwise, the practical effect of
which is to ensure in any way the payment or performance (or payment of damages
in the event of nonperformance) of any part or all of such obligation, including
the payment of amounts drawn down under letters of credit.
"HOLDER" OR "NOTEHOLDER" means the Person in whose name a Note is
registered on the Registrar's books.
"INCUR" means, as applied to any obligation, to create, incur, issue,
assume, guarantee or in any other manner become liable with respect to,
contingently or otherwise, such obligation, and "INCURRED," "INCURRENCE," and
"INCURRING" shall each have a correlative meaning; PROVIDED, HOWEVER, that any
Indebtedness or Capital Stock of a Person existing at the time such Person
becomes (after the Issue Date) a Project Company (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Project Company at the time it becomes a Project Company, and PROVIDED, FURTHER,
that any amendment, modification or waiver of any provision of any document
pursuant to which Indebtedness was previously Incurred shall not be deemed to be
an Incurrence of Indebtedness as long as (i) such amendment, modification or
waiver does not (A) increase the principal or premium thereof or interest rate
thereon, (B) change to an earlier date the Stated Maturity thereof or the date
of any scheduled or required principal payment thereon or the time or
circumstances under which such Indebtedness may or shall be redeemed, (C) if
such Indebtedness is contractually subordinated in right of payment to the
Notes, modify or affect, in any manner adverse to the Holders, such
subordination, (D) if the Company is the obligor thereon, provide that a Project
Company shall be an obligor, (E) if such Indebtedness is Non-Recourse Debt,
cause such Indebtedness to no longer constitute Non-Recourse Debt or (F)
violate, or cause the Indebtedness to violate, the provisions of Section 3.05 or
3.07 and (ii) such Indebtedness would, after giving effect to such amendment,
modification or waiver as if it were an Incurrence, comply with clause (i) of
the first proviso to the definition of "Refinancing Indebtedness."
"INDEBTEDNESS" of any Person means, without duplication, (i) the
principal of and premium (if any such premium is then due and owing) in respect
of (A) indebtedness of such Person for money borrowed and (B) indebtedness
evidenced by notes, debentures, bonds or other similar instruments for the
payment of which such Person is responsible or liable; (ii) all Capitalized
Lease Obligations of such Person; (iii) all obligations of such Person Incurred
as the deferred purchase price of property, all conditional sale obligations of
such Person and all obligations of such Person under any title retention
agreement; (iv) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction (other than obligations with respect to letters of credit securing
obligations (other than obligations described in (i) through (iii) above)
entered into in the ordinary course of business of such Person to the extent
such letters of credit are not drawn upon or, if and to the extent drawn upon,
such drawing is reimbursed no later than the tenth Business Day following
receipt by such Person of a demand for reimbursement following payment on the
letter of credit); (v) Redeemable Stock of such Person and, in the case of any
Subsidiary, any other Preferred Stock not owned by the Company or a Wholly Owned
Subsidiary, in either case valued at, in the case of Redeemable Stock, the
greater of its voluntary or involuntary maximum fixed repurchase price exclusive
of accrued and unpaid dividends or, in the case of Preferred Stock that is not
Redeemable Stock, its liquidation preference exclusive of accrued and unpaid
dividends; (vi) all obligations of such Person in respect of Interest Rate
Agreements and Currency Agreements; (vii) all obligations of the type referred
to in clauses (i) through (vi) of other Persons and all dividends of other
Persons for the payment of which, in either case, such Person is responsible or
liable, directly or indirectly, as obligor, guarantor or otherwise, including by
means of any guarantee; and (viii) all obligations of the type referred to in
clauses (i) through (vii) of other Persons secured by any Lien on any property
or asset of such Person (whether or not such obligation is assumed by such
Person), the amount of such obligation being deemed to be the lesser of the
value of such property or assets or the amount of the obligation so secured;
PROVIDED, HOWEVER, that Indebtedness shall not include trade accounts payable
arising in the ordinary course of business. For purposes hereof, the "maximum
fixed repurchase price" of any Redeemable Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Stock as if such Redeemable Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to this Indenture, and
if such price is based upon, or measured by, the fair market value of such
Redeemable Stock, such fair market value to be determined in good faith by the
Board of Directors as evidenced by a Board Resolution. The amount of
Indebtedness of any Person at any date shall be, with respect to unconditional
obligations, the outstanding balance at such date of all such obligations as
described above and, with respect to any contingent obligations at such date,
the maximum liability determined by such Person's board of directors, in good
faith, as, in light of the facts and circumstances existing at the time,
reasonably likely to be Incurred upon the occurrence of the contingency giving
rise to such obligation; provided that the amount outstanding at any time of any
Indebtedness issued with original issue discount is the face amount of such
Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness as determined in accordance with GAAP.
"INTEREST PAYMENT DATE" means the stated maturity of an installment of
interest on the Notes.
"INTEREST RATE AGREEMENT" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement or other similar agreement or arrangement designed
to protect against fluctuations in interest rates to or under which the Company
or any Project Company is a party on the Issue Date or becomes a party
thereunder.
"INVESTMENT" means, with respect to any Person, any direct or indirect
advance, loan or other extension of credit or capital contribution to (by means
of any transfer of cash or other property to others or any payment for property
or services for the account or use of others), or any other investment in any
other Person, or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or assets issued or owned by
any other Person (whether by merger, consolidation, amalgamation, sale of assets
or otherwise). For purposes of the provisions set forth in Section , (i)
"Investment" shall include the portion (proportionate to the Company's Equity
Interest in such Project Company) of the fair market value of the net assets of
any Project Company at the time such Project Company is designated an
Unrestricted Company and shall exclude the fair market value of the net assets
of any Unrestricted Company at the time that such Unrestricted Company is
designated a Project Company, as the case may be, and (ii) any property
transferred to or from an Unrestricted Company shall be valued at its fair
market value at the time of such transfer, in each case as determined by the
Board of Directors in good faith as evidenced by a Board Resolution.
"ISSUE DATE" means the date on which the Notes are originally issued
under this Indenture.
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether corporation, partnership or other legal form.
"LIEN" means any mortgage, lien, pledge, charge, or other security
interest or encumbrance of any kind (including any conditional sale or other
title retention agreement and any lease in the nature thereof).
"LINE OF BUSINESS" means the direct or indirect construction,
development, acquisition, servicing, ownership, improvement, operation and
management of Facilities and consulting or advisory activities related thereto.
"MOODY'S" means Moody's Investors Service, Inc. and its successors.
"NET AVAILABLE CASH" means, (A) with respect to any Designated
Financing, the aggregate amount of cash received by the Company or a Restricted
Subsidiary in repayment of Shareholder Loans in connection therewith; (B) with
respect to any Restricted Designation Event, an amount equal to the fair market
value of an Existing Subsidiary or Existing Joint Venture that is designated an
Unrestricted Company; and (C) with respect to any Asset Sale, the cash or cash
equivalent payments received by the Company or a Project Company in connection
with such Asset Sale (including any cash received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
or when received and also including the proceeds of other property received when
converted to cash or cash equivalents) net of the sum of, without duplication,
(i) all reasonable legal, title and recording tax expenses, reasonable
commissions, and other reasonable fees and expenses incurred directly relating
to such Asset Sale, (ii) all local, state, federal and foreign taxes required to
be paid or accrued as a liability by the Company or any Project Company as a
consequence of such Asset Sale, (iii) payments made to repay Indebtedness which
is secured by any assets subject to such Asset Sale in accordance with the terms
of any Lien upon or other security agreement of any kind with respect to such
assets, or which must by its terms, or by applicable law, be repaid out of the
proceeds from such Asset Sale and (iv) all distributions required by any
contract entered into other than in contemplation of such Asset Sale to be paid
to any holder of an Equity Interest in such Project Company as a result of such
Asset Sale, so long as such distributions do not exceed such holder's pro rata
portion (based on such holder's proportionate Equity Interest) of the cash or
cash equivalent payments described above, net of the amounts set forth in
clauses (i)-(iii) above.
"NET CASH PROCEEDS" means, with respect to any issuance or sale of
Capital Stock by any Person, the cash proceeds to such Person of such issuance
or sale net of attorneys' fees, accountants' fees, underwriters' or placement
agents' fees, discounts or commissions and brokerage, consultancy and other fees
actually incurred by such Person in connection with such issuance or sale and
net of taxes paid or payable by such Person as a result thereof.
"NON-CONVERTIBLE CAPITAL STOCK" means, with respect to any Person, any
Capital Stock of such Person which is not convertible into another security
other than non-convertible common stock of such Person; PROVIDED, HOWEVER, that
Non-Convertible Capital Stock shall not include any Redeemable Stock or
Exchangeable Stock.
"NON-RECOURSE DEBT" means Indebtedness of any Project Company (or of
any other Person that directly or indirectly owns the Capital Stock of such
Project Company as its sole assets) that is Incurred to acquire, develop,
improve, construct or to provide working capital for a Facility owned by such
Project Company, PROVIDED that such Indebtedness is without recourse to any
assets of the Company or any Project Company other than the assets or Capital
Stock of the Project Company Incurring such Indebtedness (or any other Person
that, directly or indirectly owns such Capital Stock as its sole assets) and the
income and proceeds therefrom. Indebtedness that does not comply with the
foregoing sentence because of a guarantee provided by the Company or another
Project Company will nevertheless qualify as Non-Recourse Debt so long as such
guarantee complies with the restrictions set forth under Section 3.04.
"NOTES" means all series of the 10 1/8 % Notes Due 2006 that are issued
under and pursuant to the terms of this Indenture, as amended or supplemented
from time to time.
"OFFERING" means the public offering and sale of the Notes.
"OFFICERS' CERTIFICATE" means a certificate signed by two Authorized
Officers of the Company, one of whom must be the President or Chief Financial
Officer of the Company. Each Officers' Certificate (other than certificates
provided pursuant to TIA Section 314(a)(4)) shall include the statements
provided for in TIA Section 314(e).
"OPERATING LEASE OBLIGATIONS" means any obligation of the Company and
its Restricted Subsidiaries on a Consolidated basis incurred or assumed under or
in connection with any lease of real or personal property which, in accordance
with GAAP, is not required to be classified and accounted for as a capital
lease.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel, if so acceptable, may be an employee of
or counsel to the Company or the Trustee. Each such Opinion of Counsel shall
include the statements provided for in TIA Section 314(e).
"PERMITTED INVESTMENTS" means (i) any Investment in any Restricted
Subsidiary (or any Person that would become a Restricted Subsidiary as a result
of such Investment) by the Company or any other Restricted Subsidiary or in the
Company by any Restricted Subsidiary; (ii) any Restricted Joint Venture
Investment; (iii) Investments in existence on the date of this Indenture and
Investments pursuant to letters of intent or legally binding commitments in
existence on the date of this Indenture; (iv) loans and advances made to
employees of the Company in the ordinary course of business consistent with past
practices; (v) loans and advances made by a Project Company to any Person in
connection with the provision of services by such Person to such Project
Company, the construction by such Person of fuel transportation facilities for
such Project Company or the construction by such Person of transmission
facilities or lines interconnecting such Project Company's Facility with an
electric power grid; (vi) any Investment in (a) obligations of the U.S.
government and its agencies or instrumentalities; (b) bank deposits and bank
obligations (including certificates of deposit, time deposits and bankers'
acceptances); (c) floating rate securities and other instruments issued by
governments or international development agencies; (d) commercial paper and
other short-term corporate debt obligations; (e) money market funds; and (f)
repurchase agreements with banks and broker-dealers with respect to securities
described in clauses (a) through (d) above; (vii) Dollar Permitted Investments;
and (viii) any loan made to or deposit made with any commercial banking
institution rated "A-" or higher by S&P and "A3" or higher by Moody's in
connection with a substantially similar loan made by an affiliate of such
commercial banking institution to the Company or a Wholly Owned Subsidiary.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"PREFERRED STOCK," as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"PRINCIPAL" of a Note means the principal of the Note plus, if
applicable, the premium on the Note.
"PROJECT COMPANIES" means the Restricted Subsidiaries and Restricted
Joint Ventures and "Project Company" means any of them.
"RATING AGENCIES" means (i) S&P and Moody's or (ii) if S&P or Moody's
or both shall not make a rating of the Notes publicly available, an
internationally recognized securities rating agency or agencies, as the case may
be, selected by the Company which shall be substituted for S&P or Moody's or
both, as the case may be.
"RATING CATEGORY" means (i) with respect to S&P, any of the following
categories: AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor
categories, (ii) with respect to Moody's, any of the following categories: Aaa,
Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories) and
(iii) the equivalent of any such category used by another Rating Agency). In
determining whether the rating of the Notes has decreased by one or more
gradations, gradations within Rating Categories (+ and - for S&P; 1, 2 and 3 for
Moody's) shall be taken into account (e.g., with respect to S&P, a decline in a
rating from BB+ to BB, as well as from BB- to B+, will constitute a decrease of
one gradation).
"RATING DECLINE" means the occurrence of (i) or (ii) below on, or
within 90 days after, the earliest of (A) the Company having become aware that a
Change of Control has occurred, (B) the date of public notice of the occurrence
of a Change of Control or (C) the date of public notice of the intention by AES
or the Company to approve, recommend or enter into, any transaction which, if
consummated, would result in a Change of Control (which period shall be extended
so long as the rating of the Notes is under publicly announced consideration or
possible downgrade by either of the Rating Agencies), (i) a decrease of the
rating of the Notes by either Rating Agency by one or more rating gradations or
(ii) the failure by the Company to advise the Rating Agencies, in writing, of
such occurrence or any subsequent material developments or to use its best
efforts to obtain, from at least one Rating Agency, a written, publicly
announced affirmation of its rating of the Notes, stating that it is not
downgrading and is not considering downgrading the Notes.
"REDEEMABLE STOCK" means any class or series of Capital Stock of any
Person that (a) by its terms, by the terms of any security into which it is
convertible or exchangeable or otherwise is, or upon the happening of an event
or passage of time would be, required to be redeemed (in whole or in part) on or
prior to the first anniversary of the Stated Maturity of the Notes, (b) is
redeemable at the option of the holder thereof at any time on or prior to the
first anniversary of the Stated Maturity of the Notes (other than on a Change of
Control or Asset Sale, provided that such Change of Control or Asset Sale shall
not yet have occurred) or (c) is convertible into or exchangeable for Capital
Stock referred to in clause (a) or clause (b) above or debt securities at any
time prior to the first anniversary of the Stated Maturity of the Notes.
"REFINANCING INDEBTEDNESS" means Indebtedness that refunds, refinances,
replaces, renews, repays or extends (including pursuant to any defeasance or
discharge mechanism) (collectively, "refinances," and "refinanced" shall have a
correlative meaning) any Indebtedness of the Company or a Project Company
existing on the Issue Date or Incurred in compliance with this Indenture
(including Indebtedness of the Company that refinances Indebtedness of any
Project Company and Indebtedness of any Project Company that refinances
Indebtedness of another Project Company) including Indebtedness that refinances
Refinancing Indebtedness; PROVIDED, HOWEVER, that (i) if the Indebtedness being
refinanced is contractually subordinated in right of payment to the Notes, the
Refinancing Indebtedness shall be contractually subordinated in right of payment
to the Notes to at least the same extent as the Indebtedness being refinanced,
(ii) if the Indebtedness being refinanced is Non-Recourse Debt, such Refinancing
Indebtedness shall be Non-Recourse Debt, (iii) the Refinancing Indebtedness is
scheduled to mature either (a) no earlier than the Indebtedness being refinanced
or (b) after the Stated Maturity of the Notes, (iv) the Refinancing Indebtedness
has an Average Life at the time such Refinancing Indebtedness is Incurred that
is equal to or greater than the Average Life of the Indebtedness being
refinanced and (v) such Refinancing Indebtedness is in an aggregate principal
amount (or if issued with original issue discount, an aggregate issue price)
that is equal to or less than the aggregate principal amount (or if issued with
original issue discount, the aggregate accreted value) then outstanding (plus
fees and expenses, including any premium, swap breakage and defeasance costs)
under the Indebtedness being refinanced; and PROVIDED, FURTHER, that (x)
Refinancing Indebtedness shall not include Indebtedness of a Project Company
that refinances Indebtedness of the Company; (y) the provisions of clauses (iii)
and (iv) above shall not be applicable with respect to any Refinancing
Indebtedness that refinances Shareholder Loans; and (z) Refinancing Indebtedness
that refinances Shareholder Loans of any Person other than the Company or any of
its Subsidiaries shall be PARI PASSU or subordinated to the Shareholder Loans
being refinanced.
"RESTRICTED DESIGNATION EVENT" means the designation by the Board of
Directors of the Company of any Existing Subsidiary or Existing Joint Venture to
be an Unrestricted Company.
"RESTRICTED JOINT VENTURE" means any Eligible Joint Venture of the
Company that is not designated an Unrestricted Joint Venture by the Board of
Directors.
"RESTRICTED JOINT VENTURE INVESTMENT" means any Investment which is
made by the Company or a Restricted Subsidiary in a Restricted Joint Venture;
PROVIDED that (i) at the time such Investment is made, no Default or Event of
Default shall have occurred and be continuing (or would result therefrom); (ii)
the aggregate Investment in one or more Restricted Joint Ventures operating the
same Facility does not exceed 15% of Consolidated Net Tangible Assets; PROVIDED
THAT such restriction shall not apply to any Investment in (A) Yangcheng
International Power Generating Company Ltd., or its successors and (B) Tianjin
TEDA-AES Power Co. Ltd. or its successors, and PROVIDED, FURTHER, that such
restriction shall not apply to a single additional Investment of up to $100
million in the event that the Company does not make either of the Investments
described in clauses (A) and (B); and (iii) any encumbrance or restriction on
the ability of the Person in which the Investment is made to make the payments,
distributions, loans, advances or transfers referred to in clauses (i) through
(iii) under Section that would apply immediately following the making of the
Investment could be created or permitted to exist pursuant to clause (d), (g) or
(h) under Section 3.05 or in the written opinion of the President or Chief
Financial Officer of the Company (x) are not materially more restrictive, taken
as a whole, than encumbrances and restrictions customarily accepted (or, in the
absence of any industry custom, reasonably acceptable) in substantially
non-recourse project financings and (y) apply only to the assets of the Person
in whom the Investment is made, the Capital Stock of such Person (or any other
Person that, directly or indirectly owns such Capital Stock as its sole assets)
and the income and proceeds therefrom.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company that is not
designated an Unrestricted Subsidiary by the Board of Directors.
"S&P" means Standard and Poor's Corporation and its successors.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time.
"SECURITY AGREEMENT" means the security agreement dated as of the date
hereof among the Company, the Trustee and the Collateral Agent.
"SERVICES AGREEMENT" means the Services Agreement dated as of December
29, 1993 between the Company and ------------------ AES.
"SHAREHOLDER LOAN" means Indebtedness of a Project Company that is
payable to a holder of Equity Interests in such Project Company.
"SPECIAL PROCEEDS EVENT" means (i) any Asset Sale of the assets,
property or Capital Stock of any Existing Subsidiary or Existing Joint Venture
(or any other Person that, directly or indirectly, owns such Capital Stock as
its sole assets), (ii) any Designated Financing or (iii) any Restricted
Designation Event.
"SPECIAL PROCEEDS" means, with respect to any Special Proceeds Event,
the Net Available Cash from such Special Proceeds Event; PROVIDED that the Net
Available Cash from a Special Proceeds Event relating to an Existing Subsidiary
shall not constitute Special Proceeds if and to the extent that: (A) the
aggregate amount of Net Available Cash from all Special Proceeds Events excluded
from the definition of Special Proceeds under this proviso after the Issue Date
does not exceed $30 million; (B) at the date of such Special Proceeds Event, the
Fixed Charge Coverage Ratio is greater than 2.25:1.0; and (C) with respect to
any Asset Sale, the Facilities owned by each of the Existing Subsidiaries and
each of the Existing Joint Ventures have commenced commercial operation; and
PROVIDED FURTHER, that the Net Available Cash from any Special Proceeds Event
relating to an Existing Joint Venture shall not constitute Special Proceeds if
and to the extent that (A) at the date thereof, the Fixed Charge Coverage Ratio
is greater than 2.25:1.0 and (B) with respect to any Asset Sale, the Facilities
owned by each of the Existing Subsidiaries and each of the Existing Joint
Ventures have commenced commercial operation.
"STATED MATURITY" means, with respect to any security, the date
specified in such security as the fixed date on which the principal is due and
payable, including pursuant to any mandatory redemption provision (but excluding
any provision providing for the repurchase of such security at the option of the
holder thereof upon the happening of any contingency).
"SUBORDINATED INDEBTEDNESS" means any Indebtedness of the Company
(whether outstanding on the Issue Date or thereafter Incurred) which is
contractually subordinated or junior in right of payment to the Notes or any
other Indebtedness of the Company.
"SUBSIDIARY" means, as applied to any Person, any corporation or other
entity of which a majority of the outstanding Voting Shares is, at the time,
directly or indirectly, owned by such Person.
"TAX" means any tax, duty, levy, impost, assessment or other
governmental charge of a similar nature (including penalties, interest and any
other liabilities related thereto.
"TAXING AUTHORITY" means any government or political subdivision or
territory or possession of any government or any authority or agency therein or
thereof having power to tax.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ss.ss.
77aaa-77bbbb) as in effect on the date first above written.
"TRUSTEE" means the party named as such above until a successor
replaced it and thereafter means the successor.
"TRUST OFFICER" means any officer of the Trustee within its Corporate
Trust and Agency Group assigned by the Trustee to administer its corporate trust
matters or to whom any corporate trust matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"UNIFORM COMMERCIAL CODE" means the New York Uniform Commercial Code as
in effect from time to time.
"UNRELATED BUSINESS" means any business other than the Line of
Business.
"UNRESTRICTED COMPANIES" means the Unrestricted Subsidiaries and
Unrestricted Joint Ventures and "Unrestricted Company" means any of them.
"UNRESTRICTED JOINT VENTURE" means: (i) any Eligible Joint Venture that
at the time of determination shall be designated an Unrestricted Joint Venture
by the Board of Directors in the manner provided below; (ii) any Joint Venture
of an Unrestricted Subsidiary; or (iii) any Joint Venture of the Company that is
not an Eligible Joint Venture. The Board of Directors may designate any Eligible
Joint Venture (including any newly acquired or newly formed Eligible Joint
Venture) to be an Unrestricted Joint Venture unless such Eligible Joint Venture
owns any Capital Stock of, or owns or holds any Lien on any property of, the
Company or any other Restricted Joint Venture; provided, that either (A) the
Eligible Joint Venture to be so designated has total assets of $1,000 or less or
(B) if such Eligible Joint Venture has assets greater than $1,000, that such
designation would be an investment permitted pursuant to the provisions under
Section 3.03. The Board of Directors may designate any Unrestricted Joint
Venture to be a Restricted Joint Venture; PROVIDED, HOWEVER, that immediately
after giving effect to such designation (x) the Company could Incur $1.00 of
additional Indebtedness pursuant to Subsection 3.04(a) and no Default or Event
of Default shall have occurred and be continuing. Any such designation by the
Board of Directors shall be evidenced to the Trustee by promptly filing with the
Trustee a copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions; PROVIDED, HOWEVER, that the failure to so file such
resolution and/or Officers' Certificate with the Trustee shall not impair or
affect the validity of such designation.
"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds
any Lien on any property of, the Company or any Project Company that is not a
Subsidiary or Joint Venture of the Subsidiary to be so designated; provided,
that either (A) the Subsidiary to be so designated has total assets of $1,000 or
less or (B) if such Subsidiary has assets greater than $1,000, that such
designation would be permitted pursuant to Section 3.03. The Board of Directors
may designate any Unrestricted Subsidiary to be a Restricted Subsidiary of the
Company; PROVIDED, HOWEVER, that immediately after giving effect to such
designation (x) the Company could Incur $1.00 of additional Indebtedness
pursuant to Section 3.04(a) and (y) no Default or Event of Default shall have
occurred and be continuing. Any such designation by the Board of Directors shall
be evidenced to the Trustee by promptly filing with the Trustee a copy of the
Board Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing provisions;
PROVIDED, HOWEVER, that the failure to so file such resolution and/or Officers'
Certificate with the Trustee shall not impair or affect the validity of such
designation.
"U.S. GOVERNMENT OBLIGATIONS" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America which, in either case under
clauses (i) or (ii) are not callable or redeemable before the maturity thereof.
"VOTING SHARES," with respect to any Person, means the Capital Stock
having the general voting power under ordinary circumstances to vote on the
election of the members of the board of directors or other governing body of
such Person (irrespective of whether or not at the time stock of any other class
or classes shall have or might have voting power by reason of the happening of
any contingency) and, with respect to the Company, shall include the Class A
Common Stock and the Class B Common Stock and any other Voting Shares of the
Company.
"WHOLLY OWNED SUBSIDIARY" means a Subsidiary (other than an
Unrestricted Subsidiary) all the Capital Stock of which (other than directors'
qualifying shares) is owned by the Company or another Wholly Owned Subsidiary.
SECTION 1.02. OTHER DEFINITIONS.
TERM DEFINED IN SECTION
---- ------------------
"Additional Amounts"............................... 3.06
"Change of Control Offer".......................... 3.08
"Change of Control Purchase Date".................. 3.08
"Event of Default"................................. 5.01
"Excess Proceeds".................................. 3.12(b)
"Excess Proceeds Offer"............................ 3.12(b)
"Global Note"...................................... 2.01
"Intermediate Holding Company"..................... 3.20
"Notice of Default"................................ 5.01
"Offer"............................................ 3.12(d)
"Offer Amount"..................................... 3.12(d)
"Paying Agent"..................................... 2.03
"Purchase Date".................................... 3.12(d)
"Registrar"........................................ 2.03
"Restricted Payment"............................... 3.03(a)
"Successor Corporation"............................ 4.01
"Special Proceeds Offer"........................... 3.12(d)
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder or Noteholder;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and
"OBLIGOR" on the indenture securities means the Company.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule under
the TIA have the meanings assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means, and any
accounting term not otherwise defined has the meaning assigned to it and shall
be construed in accordance with, GAAP;
(c) "OR" is not exclusive
(d) words in the singular include the plural, and in the plural include
the singular;
(e) provisions apply to successive events and transactions;
(f) "INCLUDING" means including, without limitation; (g) unsecured debt
shall not be deemed to be subordinate or junior to secured debt merely by virtue
of its nature as unsecured debt;
(h) the principal amount of any non-interest bearing or other discount
security at any date shall be the principal amount thereof that would be shown
on a balance sheet of the issuer dated such date prepared in accordance with
generally accepted accounting principles and accretion of principal on such
security shall be deemed to be the Incurrence of Indebtedness; and
(i) the principal amount (if any) of any Preferred Stock shall be the
greatest of (i) the stated value, (ii) the redemption price or (iii) the
liquidation preference of such Preferred Stock.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication, shall be
substantially in the form of Exhibit A annexed hereto, which is part of this
Indenture. The Notes may have notation, legends or endorsements required by law,
stock exchange rule or usage. Each Note shall be dated the date of its
authentication.
The terms and provisions contained in the form of Note annexed hereto
as Exhibit A shall constitute, and are expressly made, a part of this Indenture.
To the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.
The Notes shall be issued initially in the form of a single permanent
global note in fully registered form without interest coupons substantially in
the form of Exhibit A with such legends as may be applicable thereto, only in
denominations of $1,000 and integral multiples thereof (the "Global Note"),
deposited with the Trustee as custodian for the Depositary and registered in the
name of Cede & Co., as nominee of the Depositary, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The Global Note shall
bear such legend as may be required or reasonably requested by the Depositary.
The definitive Notes shall be typed, printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes may
be listed, all as determined by the officers executing such Notes, as evidenced
by their execution of such Notes.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
An Authorized Officer shall sign the Notes for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Notes.
If an Authorized Officer whose signature is on a Note no longer holds
that office at the time the Note is authenticated, the Note shall nevertheless
be valid.
A Note shall not be valid until authenticated by the manual signature
of an authorized signatory of the Trustee. The signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.
The Trustee shall authenticate Notes for original issue up to the
aggregate principal amount stated in paragraph 1 of Exhibit A upon a written
order of the Company signed by two Authorized Officers (except as otherwise
provided in Section 2.07). Such order shall specify the amount of the Notes to
be authenticated and the date on which the original issue of Notes is to be
authenticated. The aggregate principal amount of Notes outstanding at any time
may not exceed that amount except as provided in Section 2.07.
The Trustee shall initially act as authenticating agent and may
subsequently appoint another Person acceptable to the Company as authenticating
agent to authenticate Notes. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company or an Affiliate of the Company. Provided that the
authenticating agent has entered into an agreement with the Company concerning
authentication agent's duties, the Trustee shall not be liable for any act or
any failure of the authenticating agent to perform any duty either required
herein or authorized herein to be performed by such person in accordance with
this Indenture.
Typographical and other minor errors or defects in any such
reproduction of the seal or any such signature shall not affect the validity or
enforceability of any Note which has been duly authenticated and delivered by
the Trustee.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("REGISTRAR") and an
office or agency where Notes may be presented for payment ("PAYING AGENT"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "PAYING AGENT" includes any additional paying agent and
the term "REGISTRAR" includes any co-registrar.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture. The
agreement shall implement the provisions of this Indenture that relate to such
agent. The Company shall promptly notify the Trustee of the name and address of
any such agent and change in the address of such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 6.07. The
Company or any Subsidiary or Affiliate of the Company may act as Paying Agent,
Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
On or prior to 11:00 a.m., eastern standard time, on each due date of
the principal and interest on any Note (including any redemption date fixed
under the terms of such Note or this Indenture) the Company shall deposit with
the Paying Agent a sum of money, in immediately available funds, sufficient to
pay such principal and interest in funds available when such becomes due. The
Company shall require each Paying Agent (other than the Trustee) to agree in
writing that the Paying Agent shall hold in trust for the benefit of Noteholders
or the Trustee all money held by the Paying Agent for the payment of principal
of or interest on the Notes (whether such money has been paid to it by the
Company or any other obligor on the Notes) and shall notify the Trustee of any
default by the Company (or any other obligor on the Notes) in making any such
payment. If the Company or a Subsidiary or an affiliate of the Company acts as
Paying Agent, it shall segregate the money held by it as Paying Agent and hold
it as a separate trust fund for the benefit of the Noteholders. If the Company
defaults in its obligation to deposit funds for the payment of principal and
interest the Trustee may, during the continuation of such default, require a
Paying Agent to pay all money held by it to the Trustee. The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed by it. Upon doing so, the Paying Agent (other
than the Company or a Subsidiary or Affiliate of the Company) shall have no
further liability for the money delivered to the Trustee.
SECTION 2.05. NOTEHOLDER LISTS.
The Trustee shall preserve in as current a form as reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders. If the Trustee is not the Registrar, the Company shall furnish to
the Trustee at least five Business Days before each Interest Payment Date and at
such other times as the Trustee may request in writing a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Noteholders and the Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE; DEFINITIVE NOTE.
(a) The Notes shall be transferable only upon the surrender of a Note
for registration of transfer. When a Note is presented to the Registrar or a
co-registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of Section 8-401(1) of the Uniform
Commercial Code are met (and the Registrar shall be entitled to assume such
requirements have been met unless it receives written notice to the contrary)
and, if so required by the Trustee or the Company, if the Note presented is
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Company, duly executed by the registered owner or by his or her
attorney duly authorized in writing. When Notes are presented to the Registrar
or a co-registrar with a request to exchange them for an equal principal amount
of Notes of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit registration of transfers
and exchanges, the Company shall execute and the Trustee shall authenticate
Notes at the Registrar's or co-registrar's request. No service charge shall be
made for any registration of transfer or exchange of the Notes, but the Company
may require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchange pursuant to
Section 2.10 or 8.05 of this Indenture). The Company shall not be required to
make and the Registrar need not register transfers or exchanges of Notes
selected for redemption (except, in the case of Notes to be redeemed in part,
the portion thereof not to be redeemed) or for a period of 15 days before a
selection of Notes to be redeemed or 15 days before an interest payment date.
(b) Prior to the due presentation for registration of transfer of any
Note, the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Note is registered as
the absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Note and for all other purposes whatsoever,
whether or not such Note is overdue, and none of the Company, the Trustee, the
Paying Agent, the Registrar or any co-registrar shall be affected by notice to
the contrary.
(c) Notwithstanding any other provisions of this Section 2.06, unless
and until it is exchanged in whole or in part for Notes in definitive registered
form, the Global Note representing all or a portion of the Notes may not be
transferred except as a whole by the Depositary to a nominee of such Depositary
or by a nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary.
(d) If the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for the Global Notes or if at any time the
Depositary shall no longer be registered under the next sentence of this
paragraph, the Company shall appoint a successor Depositary with respect to the
Notes. Each Depositary appointed pursuant to this Section 2.06 must, at the time
of its appointment and at all times while it serves as Depositary, be a clearing
agency registered under the Exchange Act and any other applicable statute or
regulation. The Company will execute, and the Trustee will authenticate and
deliver upon a written order of the Company signed by two Authorized Officers,
Notes in definitive registered form in any authorized denominations representing
such Notes in exchange for the Global Note if (i) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for the Global
Note or if at any time the Depositary ceases to be a clearing agency registered
under the Exchange Act at any time when it is required to be and, in either
case, a successor Depositary for the Notes is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware that the
Depositary is no longer so registered, (ii) the Company determines in accordance
with the next paragraph of this subsection (d) that the Global Note shall be
exchanged or exchangeable for Notes in definitive registered form or (iii) an
Event of Default has occurred and is continuing.
The Company may at any time and in its sole discretion determine that
the Notes shall no longer be represented by the Global Note. In such event the
Company will execute, and the Trustee will authenticate and deliver upon a
written order of the Company signed by two Authorized Officers, Notes in
definitive registered form in any authorized denominations representing such
Notes in exchange for such Global Note.
(e) Upon the exchange of the Global Note for Notes in definitive
registered form without coupons, in authorized denominations, such Global Note
shall be canceled by the Trustee. Notes in definitive registered form issued in
exchange for the Global Note pursuant to this Section 2.06 shall be registered
in such names and in such authorized denominations as the Depositary for the
Global Note pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver such Notes to
or as directed by the Persons in whose names such Notes are so registered.
All Notes issued upon any transfer or exchange pursuant to the terms of
this Indenture will evidence the same debt and will be entitled to the same
benefits under this Indenture as the Notes surrendered upon such transfer or
exchange.
SECTION 2.07. REPLACEMENT NOTES.
If a mutilated security is surrendered to the Registrar or if the
Holder of a Note claims that the Note has been lost, destroyed or wrongfully
taken and the Holder furnishes to the Company and the Trustee evidence to their
satisfaction of such loss, destruction or wrongful taking, the Company shall
issue and the Trustee shall, in the absence of notice to the Company or the
Trustee that such Note has been acquired by a bona fide purchaser, authenticate
a replacement Note if the requirements of Section 8-405 of the Uniform
Commercial Code are met (and the Registrar shall be entitled to assume such
requirements have been met unless it receives written notice to the contrary)
and if there is delivered to the Company and the Trustee such security or
indemnity as may be required to save each of them harmless, satisfactory to the
Company or the Trustee, as the case may be. The Company and the Trustee may
charge the Holder for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to the benefits of (but shall be subject to all the
limitations of rights set forth in) this Indenture.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, and those described in this section as not outstanding.
If a Note is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Note is held by a bona fide purchaser.
If all the principal and interest on any Notes are considered paid
under Section 3.01, such Notes cease to be outstanding under this Indenture and
interest on such Notes shall cease to accrue. If the Paying Agent (other than
the Company or a Subsidiary or an Affiliate of the Company) holds in accordance
with this Indenture on a redemption date or maturity date money sufficient to
pay all principal and interest due on that date then on and after that date such
Notes cease to be outstanding and interest on them ceases to accrue (unless
there shall be a default in such payment).
If a Note is called for redemption, the Company and the Trustee need
not treat the Note as outstanding in determining whether Holders of the required
principal amount of Notes have concurred in any direction, waiver or consent.
Subject to Section 2.09, a Note does not cease to be outstanding
because the Company or an Affiliate thereof holds the Note.
SECTION 2.09. DETERMINATION OF HOLDERS' ACTION.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, amendment, waiver or consent, Notes owned
by or pledged to the Company, any other obligor upon the Notes or any Affiliate
of the Company or such other obligor shall be disregarded and deemed not to be
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which the Trustee knows are so owned or pledged shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes. Without unreasonable delay,
the Company shall prepare and the Trustee, upon the written order of the Company
signed by two Authorized Officers, shall authenticate definitive Notes in
exchange for temporary Notes. Until such exchange, temporary Notes shall be
entitled to the same rights, benefits and privileges as definitive Notes.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee shall cancel all Notes surrendered for registration of transfer,
exchange, payment or cancellation and shall destroy the same or otherwise
dispose of canceled Notes as the Company directors by written order signed by
two Authorized Officers. The Company may not issue new Notes to replace Notes
that it has paid or delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it shall
pay defaulted interest, plus any interest payable on the defaulted interest to
the extent permitted by law, in any lawful manner. The Company may pay the
defaulted interest to the Persons who are Noteholders on a subsequent special
record date which date shall be at least five Business Days prior to the payment
date. The Company shall fix the special record date and payment date. At least
15 days before the special record date, the Company (or the Trustee, in the name
of and at the expense of the Company) shall mail to Noteholders a notice that
states the special record date, payment date and amount of interest to be paid.
ARTICLE 3
COVENANTS
SECTION 3.01. PAYMENT OF NOTES.
(a) The Company shall pay the principal of and interest on the Notes on
the dates and in the manner provided in the Notes. The Company shall pay
interest on overdue principal at the rate borne by the Notes; it shall pay
interest on overdue installments of interest at the rate borne by the Notes to
the extent lawful. Principal and interest shall be considered paid on the date
due (including a redemption date) if the Trustee or the Paying Agent (other than
the Company or a Subsidiary or an Affiliate of the Company) has received from or
on behalf of the Company on or prior to 11:00 a.m., eastern standard time, on
that date, in immediately available funds, money sufficient to pay all principal
and interest then due. To the extent that the Trustee or the Paying Agent shall
not have received all or any part of such money at such time, the Trustee shall
request the Collateral Agent to transfer to the Trustee from the Debt Service
Reserve Account an amount equal to any such defficiency.
(b) At least five Business Days prior to the first interest payment
date and, if there has been any change with respect to the matters set forth in
the below-mentioned certificate, at least five Business Days prior to each
interest payment date thereafter, the Company shall furnish the Trustee with an
Officers' Certificate instructing the Trustee as to any circumstances in which
payments of principal of or interest on the Notes due on such date shall be
subject to deduction or withholding for or on account of any taxes described in
Section 3.06 and the rate of any such deduction or withholding. If any such
deduction or withholding shall be required and if the Company therefore becomes
liable to pay Additional Amounts, if any, pursuant to Section 3.06, then, at
least five Business Days prior to each interest payment date, the Company will
furnish the Trustee with a certificate which specifies the amount required to be
withheld on such payment to Holders of the Notes and the Additional Amounts, if
any, due to Holders of the Notes, and will pay to the Trustee such Additional
Amounts, if any, as shall be required to be paid to such Holders.
SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency where Notes may be surrendered for registration of
transfer or exchange or for presentation for payment and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in Section 11.02 of this Indenture.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York, for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby initially designates the office of Bankers Trust
Company in the Borough of Manhattan, the City of New York, as such office of the
Company in accordance with Section 2.03.
SECTION 3.03. LIMITATION ON RESTRICTED PAYMENTS.
(a) So long as any of the Notes are outstanding, the Company shall not,
and shall not permit any Project Company to, directly or indirectly, (i) declare
or pay (either in cash or property) any dividend on or make any distribution or
similar payment of any sort in respect of its Equity Interests (including any
payment in connection with any merger or consolidation involving the Company) to
the direct or indirect holders of its Equity Interests (other than dividends or
distributions payable solely in its Non-Convertible Capital Stock or rights to
acquire its Non-Convertible Capital Stock and dividends or distributions by a
Project Company that are paid to the Company or a Wholly Owned Subsidiary and to
the other holders of Equity Interests in such Project Company (A) in accordance
with the joint venture contract, articles of association or other constituent
document governing such Project Company or (B) as permitted by applicable law),
(ii) purchase, redeem, defease or otherwise acquire or retire for value any
Equity Interests of the Company or AES, or, with respect to the Company,
exercise any option to exchange any Equity Interests that by their terms are
exchangeable solely at the option of the Company (other than into Capital Stock
of the Company which is neither Exchangeable Stock nor Redeemable Stock), (iii)
purchase, repurchase, redeem, defease or otherwise acquire or retire for value,
prior to scheduled maturity or scheduled repayment thereof or scheduled sinking
fund payment thereon, any Subordinated Indebtedness or (iv) make any Investment,
other than a Permitted Investment (each such payment described in clauses
(i)-(iv) of this paragraph, a "Restricted Payment"), unless at the time of and
after giving effect to the proposed Restricted Payment:
(1) no Default or Event of Default shall have occurred and be
continuing (or would result therefrom);
(2) the Company would be permitted to Incur an additional $1.00 of
Indebtedness pursuant to the provisions of Section 3.04(a); and
(3) the aggregate amount of all such Restricted Payments subsequent to
the Issue Date shall not exceed the sum of
(A) 50% of aggregate Consolidated Net Income accrued during
the period (treated as one accounting period) from December 1, 1996
to the end of the most recent fiscal quarter for which financial
statements are available (or if such Consolidated Net Income is a
deficit, minus 100% of such deficit);
(B) the aggregate Net Cash Proceeds received by the Company
after the Issue Date from the sale of Equity Interests (other than
Redeemable Stock or Exchangeable Stock) of the Company to any person
other than the Company, any of its Subsidiaries or an employee stock
ownership plan;
(C) the amount by which the principal amount of, and any
accrued interest on, Indebtedness of the Company or its Restricted
Subsidiaries (other than Shareholder Loans) is reduced on the
Company's Consolidated balance sheet upon the conversion or exchange
(other than by a Subsidiary) subsequent to the Issue Date of any
Indebtedness of the Company or any Restricted Subsidiary converted
or exchanged for Capital Stock (other than Redeemable Stock or
Exchangeable Stock) of the Company (less the amount of any cash, or
the value of any other property, distributed by the Company or any
such Restricted Subsidiary upon such conversion or exchange); and
(D) an amount equal to the net reduction in Investments after
the Issue Date in Unrestricted Companies resulting from payments of
interest on Indebtedness, dividends, repayments of loans or
advances, or other transfers of assets, in each case to the Company
or any Project Company from Unrestricted Companies or from
redesignations of Unrestricted Companies as Project Companies
(valued in each case as provided in the definition of
"Investments"), not to exceed in the case of any Unrestricted
Company the amount of Investments previously made by the Company or
any Project Company in such Unrestricted Company.
(b) The failure to satisfy the conditions set forth in clauses (2) and
(3) of Subsection 3.03(a) shall not prohibit any of the following as long as the
condition set forth in clause (1) of Subsection 3.03(a) is satisfied (except as
set forth below):
(i) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with Subsection 3.03(a); PROVIDED that, solely for purposes of this clause
(i), it shall not be necessary to satisfy the condition set forth in clause
(1) of Subsection 3.03(a) at the date of payment if such clause is
satisfied at the date of declaration;
(ii) any purchase, redemption, defeasance, or other acquisition or
retirement for value of Capital Stock of the Company or Subordinated
Indebtedness made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock of the Company (other than
Redeemable Stock or Exchangeable Stock and other than stock issued or sold
to a Subsidiary or to an employee stock ownership plan), PROVIDED, that
such purchase, redemption, defeasance or other acquisition or retirement
shall not be included in the calculation of Restricted Payments made for
purposes of clause (3) of Subsection and PROVIDED, FURTHER, that the Net
Cash Proceeds from such sale shall be excluded from sub-clause B of clause
(3) of Subsection 3.03(a);
(iii) any purchase, redemption, defeasance or other acquisition or
retirement for value of Subordinated Indebtedness made by exchange for, or
out of the proceeds of the substantially concurrent Incurrence of for cash
(other than to a Subsidiary), new Indebtedness of the Company, PROVIDED,
HOWEVER, that (A) such new Indebtedness shall be contractually subordinated
in right of payment to the Notes at least to the same extent as the
Indebtedness being so redeemed, repurchased, defeased, acquired or retired,
(B) such new Indebtedness has a Stated Maturity either (1) no earlier than
the Stated Maturity of the Indebtedness redeemed, repurchased, defeased,
acquired or retired or (2) after the Stated Maturity of the Notes and (C)
such Indebtedness has an Average Life equal to or greater than the Average
Life of the Indebtedness redeemed, repurchased, defeased, acquired or
retired, and provided further, that such purchase, redemption, defeasance
or other acquisition or retirement shall not be included in the calculation
of Restricted Payments made for purposes of clause (3) of Subsection
3.03(a); and
(iv) any purchase, redemption, defeasance or other acquisition or
retirement for value of Subordinated Indebtedness upon a Change of Control
or an Asset Sale to the extent required by this Indenture or other
agreement pursuant to which such Subordinated Indebtedness was issued, but
only if (A) in the case of a Change of Control, the Company has made an
offer to repurchase the Notes as described under Section 3.08 or (B) in the
case of an Asset Sale, the Company or the applicable Project Company, as
the case may be, has applied the Net Available Cash from such Asset Sale in
accordance with the provisions of Section 3.12; and
(v) Restricted Payments not otherwise permitted by the foregoing
provisions in an aggregate amount not in excess of $10 million.
SECTION 3.04. LIMITATION ON INCURRENCE OF INDEBTEDNESS.
(a) The Company shall not, and shall not permit any Project Company to,
directly or indirectly, Incur any Indebtedness, except that the Company may
Incur Indebtedness if, after giving effect thereto, the Fixed Charge Coverage
Ratio would be greater than (i) 1.75:1.0 through November 30, 1998, (ii)
2.00:1.0 from December 1, 1998 through November 30, 2001, and (iii) 2.25:1.0
thereafter.
(b) Notwithstanding the foregoing, this section shall not limit the
ability of the Company or any Project Company to Incur the following
Indebtedness:
(i) Indebtedness under the Notes and this Indenture;
(ii) Refinancing Indebtedness;
(iii) Indebtedness of the Company which is owned to and held by a
Wholly Owned Subsidiary and Indebtedness of a Project Company which is owed
to and held by the Company or a Wholly Owned Subsidiary, provided, however,
that any subsequent issuance or transfer of any Capital Stock which results
in any such Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary
or any transfer of such Indebtedness (other than to the Company or a Wholly
Owned Subsidiary) shall be deemed, in each case, to constitute the
Incurrence of such Indebtedness by the Company or by a Project Company, as
the case may be;
(iv) Acquired Indebtedness that is Non-Recourse Debt;
(v) Indebtedness of the Company or a Project Company outstanding on
the Issue Date;
(vi) Indebtedness under any Currency Agreement or Interest Rate
Agreement in each case entered into in the ordinary course of the financial
management of the Company and the Project Companies and not for speculative
purposes; provided that, in the case of any Currency Agreement, such
Currency Agreement does not increase the Indebtedness of the obligor
outstanding at any time other than as a result of fluctuations in foreign
currency exchange rates or by reason of fees, indemnities and compensation
payable thereunder;
(vii) Indebtedness incurred in connection with a purchase of the
Notes as required in connection with a Change of Control Triggering Event;
provided that the aggregate principal amount of such indebtedness does not
exceed 101% of the aggregate principal amount of the Notes purchased
pursuant to such Change of Control Triggering Event (plus the amount of
reasonable fees and expenses, including underwriting discounts and
commissions, incurred by the Company in connection with obtaining such
Indebtedness) and that such Indebtedness does not mature prior to the
Stated Maturity of the Notes so purchased;
(viii) Indebtedness referred to in clause (viii) of the
definition of Permitted Investments;
(ix) Non-Recourse Debt of a Project Company (other than any
Existing Subsidiary);
(x) Shareholder Loans to the extent that the aggregate principal
amount of Shareholder Loans of a Project Company is not greater than an
amount equal to the principal amount of Shareholder Loans of such Project
Company payable to the Company or a Wholly Owned Subsidiary divided by the
Company's percentage ownership of the Capital Stock of such Project
Company;
(xi) Non-Recourse Debt of any Existing Subsidiary Incurred to pay
for construction cost overruns; provided that the aggregate principal
amount of all such Non-Recourse Debt incurred under this clause (xi) shall
not exceed $15 million;
(xii) Non-Recourse Debt of any Existing Subsidiary Incurred to
provide for working capital; provided that the aggregate principal amount
outstanding at any time of all such Non-Recourse Debt under this clause
(xii) shall not exceed $10 million; and
(xiii) other Indebtedness Incurred by the Company or any Project
Company (other than an Existing Subsidiary) in an aggregate principal
amount outstanding at any time of not more than 5% of Consolidated Net
Worth.
(c) Notwithstanding Sections 3.04(a) and (b), the Company shall not
Incur any Indebtedness if the proceeds thereof are used, directly or indirectly,
to repay, prepay, redeem, defease, retire, refund or refinance any Subordinated
Indebtedness unless such repayment, prepayment, redemption, defeasance,
retirement, refunding or refinancing is not prohibited by Section 3.03 or unless
such Indebtedness shall be contractually subordinated to the Notes at least to
the same extent as such Subordinated Indebtedness.
SECTION 3.05. LIMITATION ON PAYMENT RESTRICTIONS AFFECTING PROJECT
COMPANIES.
The Company shall not, and shall not permit any Project Company to,
create or otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Project Company to (i) pay
dividends to or make any other distributions on its Capital Stock, or pay any
Indebtedness or other obligations owed to the Company or any other Project
Company, (ii) make any loans or advances to the Company or any Project Company
or (iii) transfer any of its property or assets to the Company or any other
Project Company; PROVIDED, HOWEVER, that the foregoing shall not apply to:
(a) any encumbrance or restriction existing pursuant to this Indenture
or any other agreement or instrument as in effect or entered into on the Issue
Date;
(b) any encumbrance or restriction with respect to any Person or the
assets of such Person acquired by the Company or any Project Company and
existing at the time of such acquisition; PROVIDED, HOWEVER, that such
encumbrance or restriction was not Incurred in connection with or in
contemplation of such Project Company becoming a Project Company;
(c) any encumbrance or restriction pursuant to an agreement effecting a
refinancing of Indebtedness referred to in clause (a) or (b) above or contained
in any amendment or modification with respect to such Indebtedness; provided,
however, that the encumbrances and restrictions contained in any such agreement,
amendment or modification are no less favorable in any material respect with
respect to the matters referred to in clauses (i), (ii) and (iii) above than the
encumbrances and restrictions with respect to the Indebtedness being refinanced,
amended or modified;
(d) in the case of clause (iii) above, customary non-assignment
provisions of (A) any leases governing a leasehold interest or (B) any supply,
license or other agreement entered into in the ordinary course of business of
the Company or any Project Company;
(e) any restrictions with respect to a Project Company imposed pursuant
to an agreement entered into for the sale or disposition of all or substantially
all of the Capital Stock or assets of such Project Company pending the closing
of such sale or disposition;
(f) any encumbrances or restrictions imposed pursuant to the terms of
Non-Recourse Debt incurred pursuant to Section 3.04(b)(x), provided that such
encumbrances or restrictions, in the written opinion of the President or Chief
Financial Officer of the Company, (x) are required in order to obtain such
financing, (y) are not materially more restrictive, taken as a whole, than
encumbrances and restrictions customarily accepted (or, in the absence of any
industry custom, reasonably acceptable), in substantially non-recourse project
financings and (z) apply only to the assets of the Project Company that has
Incurred such Non-Recourse Debt, the Capital Stock of such Person (or any other
Person that, directly or indirectly, owns such Capital Stock as its sole assets)
and the income and proceeds therefrom;
(g) any encumbrance or restriction existing by reason of applicable
law; and
(h) any restriction under a joint venture, shareholders' or similar
agreement to pay dividends or make other distributions, so long as there is a
contemporaneous agreement providing for the payment of dividends or the making
of distributions according to a schedule or calculation notwithstanding such
restriction.
Nothing contained in this Section 3.05 shall prevent the Company or any
Project Company from (1) creating, incurring, assuming or suffering to exist any
Liens otherwise permitted in Section 3.07 or (2) restricting the sale or other
disposition of property or assets of the Company or any Project Company that
secure Indebtedness.
SECTION 3.06. PAYMENT OF ADDITIONAL AMOUNTS.
All payments of principal and interest in respect of each Note shall be
made free and clear of, and without withholding or deduction for, any taxes,
duties, assessments or governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by or within Bermuda or any other jurisdiction
in which the Company is organized or any authority therein or thereof having
power to tax or from which any payment is made with respect to the Notes, unless
such withholding or deduction is required by law or by regulation or
governmental policy having the force of law. In the event that any such
withholding or deduction in respect of principal or interest is so required, the
Company shall pay such additional amounts ("Additional Amounts") as will result
in receipt by each Holder of any Note of such amounts as would have been
received by such Holder or the beneficial owner with respect to such Note had no
such withholding or deduction been required, except that no Additional Amounts
shall be payable:
(a) for or on account of:
(i) any tax, duty, assessment or other governmental charge
that would not have been imposed but for
(A) the existence of any present or former connection
between such Holder or the beneficial owner of such Note and
Bermuda or such other jurisdiction in which the Company is
organized, as the case may be, other than merely holding
such Note, including, without limitation, such Holder or the
beneficial owner of such Note being or having been a
national, domiciliary or resident of or treated as a
resident thereof or being or having been present or engaged
in a trade or business therein or having or having had a
permanent establishment therein;
(B) presentation of such Note (where presentation is
required) more than thirty (30) days after the date on which
the payment in respect of such Note became due and payable
or provided for, whichever is later, except to the extent
that such Holder would have been entitled to such Additional
Amounts if it had presented such Note for payment on any day
within such period of thirty (30) days; or
(C) the presentation of such Note for payment in
Bermuda or any political subdivision thereof or therein,
unless such Note could not have been presented for payment
elsewhere;
(ii) any estate, inheritance, gift, sale, transfer, personal
property or similar tax, assessment or other governmental charge;
(iii) any tax, assessment or other governmental charge that
is imposed or withheld by reason of the failure of such Holder or the
beneficial owner of such Note to comply with a request by the Company
addressed to such Holder (A) to provide information concerning the
nationality, residence or identity of such Holder or such beneficial owner
or (B) to make any declaration or other similar claim or satisfy any
information or reporting requirement, which, in the case of (A) or (B), is
required or imposed by a statute, treaty, regulation or administrative
practice of the taxing jurisdiction as a precondition to exemption from all
or part of such tax, assessment or other governmental charge;
(iv) any tax, duty, assessment or governmental charge which
is payable other than by withholding or deduction from payments with
respect to the Notes; or
(v) any combination of items (1), (2), (3) and (4);
(b) with respect to any payment of the principal of or interest on such
Note to such Holder (including a fiduciary or partnership) to the extent that
the beneficial owner of such Note would not have been entitled to such
Additional Amounts had it been the Holder of the Note.
Whenever there is mentioned, in any context, the payment of principal
or interest in respect of any Note or the net proceeds received on the sale or
exchange of any Note, such mention shall be deemed to include the payment of
Additional Amounts provided for in this Indenture to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof
pursuant to this Indenture.
SECTION 3.07. LIMITATION ON LIENS.
The Company shall not, and shall not permit any Project Company to
directly or indirectly, incur or permit to exist any Lien of any nature
whatsoever on any of its properties (including, without limitation, Capital
Stock), whether owned at the date of such Indenture or the