EXHIBIT 4.1(a)
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TRUST INDENTURE
Dated as of March 1, 2000
among
AES RED OAK, L.L.C.,
THE BANK OF NEW YORK,
as Trustee
and
THE BANK OF NEW YORK,
as Depositary Bank
Providing for the Issuance from Time to Time of
Bonds in One or More Series
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830 MW (Net) Gas-Fired Combined Cycle Electric Generating Facility
Borough of Sayreville, Middlesex County, New Jersey
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.................................................2
SECTION 1.1 DEFINITIONS, CONSTRUCTION...................................................................2
SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS.......................................................23
SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.....................................................24
SECTION 1.4 ACTS OF BONDHOLDERS........................................................................25
SECTION 1.5 NOTICES, ETC. TO TRUSTEE AND COMPANY.......................................................26
SECTION 1.6 NOTICES TO BONDHOLDERS; WAIVER.............................................................26
SECTION 1.7 EFFECT OF HEADING AND TABLE OF CONTENTS....................................................26
SECTION 1.8 SUCCESSORS AND ASSIGNS.....................................................................27
SECTION 1.9 SEVERABILITY...............................................................................27
SECTION 1.10 BENEFITS OF INDENTURE......................................................................27
SECTION 1.11 GOVERNING LAW..............................................................................27
SECTION 1.12 LEGAL HOLIDAYS.............................................................................27
SECTION 1.13 EXECUTION IN COUNTERPARTS..................................................................28
ARTICLE II THE BONDS.............................................................................................28
SECTION 2.1 FORM OF BOND TO BE ESTABLISHED BY SERIES SUPPLEMENTAL INDENTURE............................28
SECTION 2.2 FORM OF TRUSTEE'S AUTHENTICATION...........................................................28
SECTION 2.3 AMOUNT UNLIMITED; ISSUABLE IN SERIES; LIMITATIONS ON ISSUANCE..............................28
SECTION 2.4 AUTHENTICATION AND DELIVERY OF BONDS.......................................................29
SECTION 2.5 FORM AND DENOMINATIONS.....................................................................30
SECTION 2.6 EXECUTION OF BONDS.........................................................................31
SECTION 2.7 TEMPORARY BONDS............................................................................31
SECTION 2.8 REGISTRATION, TRANSFER AND EXCHANGE........................................................32
SECTION 2.9 MUTILATED, DESTROYED, LOST AND STOLEN BONDS................................................33
SECTION 2.10 PAYMENT OF PRINCIPAL AND INTEREST, PRINCIPAL AND INTEREST RIGHTS PRESERVED.................33
SECTION 2.11 PERSONS DEEMED OWNERS......................................................................35
SECTION 2.12 CANCELLATION...............................................................................35
SECTION 2.13 DATING OF BONDS, COMPUTATION OF INTEREST...................................................35
SECTION 2.14 SOURCE OF PAYMENTS LIMITED; RIGHTS AND LIABILITIES OF THE COMPANY..........................35
SECTION 2.15 PARITY OF BONDS............................................................................35
SECTION 2.16 ALLOCATION OF PRINCIPAL AND INTEREST.......................................................36
SECTION 2.17 MONIES UNCLAIMED...........................................................................36
ARTICLE III REPRESENTATIONS AND WARRANTIES.......................................................................36
SECTION 3.1 ORGANIZATION, POWER AND STATUS OF THE COMPANY..............................................36
SECTION 3.2 AUTHORIZATION, ENFORCEABILITY, EXECUTION AND DELIVERY......................................36
SECTION 3.3 NO CONFLICTS; APPLICABLE LAWS AND CONTRACTS; NO DEFAULT....................................37
SECTION 3.4 GOVERNMENTAL APPROVALS.....................................................................37
SECTION 3.5 LITIGATION.................................................................................38
SECTION 3.6 COLLATERAL.................................................................................38
SECTION 3.7 TAXES......................................................................................38
SECTION 3.8 ENVIRONMENTAL MATTERS......................................................................38
SECTION 3.9 COMPLIANCE WITH APPLICABLE LAW.............................................................39
SECTION 3.10 SECURITY DOCUMENTS.........................................................................39
SECTION 3.11 UTILITY REGULATION; EWG STATUS.............................................................39
SECTION 3.12 INVESTMENT COMPANY ACT.....................................................................39
SECTION 3.13 ERISA AND EMPLOYEES........................................................................39
SECTION 3.14 SUBSIDIARIES...............................................................................40
SECTION 3.15 CERTIFICATES...............................................................................40
ARTICLE IV ACCOUNTS..............................................................................................40
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TABLE OF CONTENTS
PAGE
SECTION 4.1 ESTABLISHMENT OF ACCOUNTS..................................................................40
SECTION 4.2 INVESTMENT OF FUNDS IN THE INDENTURE ACCOUNTS..............................................41
SECTION 4.3 VALUATION AND SALE OF INVESTMENTS..........................................................41
SECTION 4.4 POSSESSION OF ACCOUNTS; LIQUIDATION........................................................42
SECTION 4.5 THE DEPOSITARY BANK; LIMITED COMPANY RIGHTS................................................42
ARTICLE V COLLECTION AND APPLICATION OF FUNDS IN THE INDENTURE ACCOUNTS..........................................44
SECTION 5.1 BOND PROCEEDS ACCOUNT......................................................................44
SECTION 5.2 BOND PAYMENT ACCOUNT.......................................................................44
SECTION 5.3 INTEREST PAYMENT SUBACCOUNT, PRINCIPAL PAYMENT SUBACCOUNT AND REDEMPTION SUBACCOUNT........44
SECTION 5.4 CONSTRUCTION INTEREST ACCOUNT..............................................................45
ARTICLE VI COVENANTS.............................................................................................45
SECTION 6.1 PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST........................................45
SECTION 6.2 INSURANCE..................................................................................45
SECTION 6.3 REPORTING REQUIREMENTS.....................................................................46
SECTION 6.4 MAINTENANCE OF EXISTENCE, LIENS AND GOVERNMENTAL APPROVALS.................................49
SECTION 6.5 NATURE OF BUSINESS.........................................................................49
SECTION 6.6 OPERATING AND MAINTENANCE..................................................................49
SECTION 6.7 COMPLIANCE WITH APPLICABLE LAWS............................................................49
SECTION 6.8 PROHIBITION ON CHANGE IN CONTROL...........................................................50
SECTION 6.9 PROJECT CONTRACTS; WILLIAMS GUARANTY; OPERATION OF THE FACILITY............................50
SECTION 6.10 TRANSACTIONS WITH AFFILIATES...............................................................51
SECTION 6.11 AMENDMENTS TO PROJECT CONTRACTS............................................................51
SECTION 6.12 PROHIBITION ON FUNDAMENTAL CHANGES AND DISPOSITION OF ASSETS...............................51
SECTION 6.13 ANNUAL BUDGET..............................................................................52
SECTION 6.14 INSURANCE REPORT...........................................................................52
SECTION 6.15 LIENS......................................................................................53
SECTION 6.16 INSPECTION.................................................................................53
SECTION 6.17 LIMITATIONS ON ADDITIONAL INDEBTEDNESS.....................................................53
SECTION 6.18 RESTRICTED PAYMENTS........................................................................53
SECTION 6.19 CONSTRUCTION OF THE FACILITY...............................................................53
SECTION 6.20 CONTRACTOR PERFORMANCE TESTS; FINAL ACCEPTANCE.............................................53
SECTION 6.21 CHANGE ORDERS..............................................................................54
SECTION 6.22 CASUALTY PROCEEDS; EMINENT DOMAIN PROCEEDS.................................................54
SECTION 6.23 PAYMENT OF TAXES AND IMPOSITIONS...........................................................54
SECTION 6.24 PRESERVATION OF LIEN OF MORTGAGE...........................................................55
SECTION 6.25 OWNERSHIP OF URC...........................................................................55
ARTICLE VII REDEMPTION AND PREPAYMENT OF BONDS...................................................................55
SECTION 7.1 APPLICABILITY OF ARTICLE...................................................................55
SECTION 7.2 ELECTION TO REDEEM OR PREPAY; NOTICE TO TRUSTEE............................................55
SECTION 7.3 OPTIONAL REDEMPTION; MANDATORY REDEMPTION; PREPAYMENT; SELECTION
OF BONDS TO BE REDEEMED OR PREPAID.........................................................56
SECTION 7.4 NOTICE OF REDEMPTION OR PREPAYMENT.........................................................58
SECTION 7.5 BONDS PAYABLE ON REDEMPTION DATE OR PREPAYMENT DATE........................................59
SECTION 7.6 BONDS REDEEMED OR PREPAID IN PART..........................................................59
ARTICLE VIII SINKING FUNDS.......................................................................................60
SECTION 8.1 APPLICABILITY OF ARTICLE...................................................................60
SECTION 8.2 SINKING FUNDS FOR BONDS....................................................................60
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ARTICLE IX EVENTS OF DEFAULT; REMEDIES...........................................................................60
SECTION 9.1 EVENTS OF DEFAULT..........................................................................60
SECTION 9.2 ENFORCEMENT OF REMEDIES....................................................................63
SECTION 9.3 SPECIFIC REMEDIES..........................................................................64
SECTION 9.4 JUDICIAL PROCEEDINGS INSTITUTED BY TRUSTEE.................................................65
SECTION 9.5 HOLDERS MAY DEMAND ENFORCEMENT OF RIGHTS BY TRUSTEE........................................67
SECTION 9.6 CONTROL BY BONDHOLDERS.....................................................................67
SECTION 9.7 WAIVER OF PAST DEFAULTS....................................................................67
SECTION 9.8 HOLDER MAY NOT BRING SUIT EXCEPT UNDER CERTAIN CONDITIONS..................................67
SECTION 9.9 UNDERTAKING TO PAY COURT COSTS.............................................................68
SECTION 9.10 RIGHT OF BONDHOLDERS TO RECEIVE PAYMENT NOT TO BE IMPAIRED.................................68
SECTION 9.11 APPLICATION OF FUNDS COLLECTED BY TRUSTEE..................................................69
SECTION 9.12 BONDS HELD BY CERTAIN PERSONS NOT TO SHARE IN DISTRIBUTION.................................70
SECTION 9.13 WAIVER OF APPRAISEMENT, VALUATION, STAY, RIGHT TO MARSHALLING..............................70
SECTION 9.14 REMEDIES CUMULATIVE, DELAY OR OMISSION NOT A WAIVER........................................70
SECTION 9.15 THE COLLATERAL AGENCY AGREEMENT............................................................71
SECTION 9.16 AFFILIATE CURE RIGHTS......................................................................71
ARTICLE X THE TRUSTEE............................................................................................71
SECTION 10.1 CERTAIN DUTIES AND RESPONSIBILITIES........................................................71
SECTION 10.2 NOTICE OF DEFAULTS.........................................................................72
SECTION 10.3 CERTAIN RIGHTS OF TRUSTEE..................................................................72
SECTION 10.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF BONDS..........................................73
SECTION 10.5 MAY HOLD BONDS.............................................................................74
SECTION 10.6 FUNDS MAY BE HELD BY TRUSTEE OR PAYING AGENT; INVESTMENTS..................................74
SECTION 10.7 COMPENSATION, REIMBURSEMENT AND INDEMNIFICATION............................................74
SECTION 10.8 DISQUALIFICATION; CONFLICTING INTERESTS....................................................75
SECTION 10.9 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY....................................................80
SECTION 10.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR..........................................80
SECTION 10.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.....................................................81
SECTION 10.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS................................82
SECTION 10.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ANY OBLIGOR......................................82
SECTION 10.14 MAINTENANCE OF OFFICES AND AGENCIES........................................................85
SECTION 10.15 CO-TRUSTEE OR SEPARATE TRUSTEE.............................................................88
SECTION 10.16 TAXES......................................................................................89
ARTICLE XI HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY.....................................................89
SECTION 11.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF BONDHOLDERS..............................89
SECTION 11.2 PRESERVATION OF INFORMATION; COMMUNICATIONS TO BONDHOLDERS.................................89
ARTICLE XII SUPPLEMENTAL INDENTURES..............................................................................90
SECTION 12.1 SUPPLEMENTAL INDENTURES AND AMENDMENTS TO
FINANCING DOCUMENTS WITHOUT CONSENT OF BONDHOLDERS ........................................90
SECTION 12.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS........................................91
SECTION 12.3 DOCUMENTS AFFECTING IMMUNITY OR INDEMNITY..................................................93
SECTION 12.4 EXECUTION OF SUPPLEMENTAL INDENTURES.......................................................93
SECTION 12.5 EFFECT OF SUPPLEMENTAL INDENTURES..........................................................93
SECTION 12.6 REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES..............................................93
ARTICLE XIII SATISFACTION AND DISCHARGE..........................................................................93
SECTION 13.1 SATISFACTION AND DISCHARGE OF BONDS........................................................93
SECTION 13.2 SATISFACTION AND DISCHARGE OF INDENTURE....................................................95
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SECTION 13.3 APPLICATION OF TRUST MONEY.................................................................95
ARTICLE XIV MEETINGS OF BONDHOLDERS; ACTION WITHOUT MEETING......................................................96
SECTION 14.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED..................................................96
SECTION 14.2 CALL, NOTICE AND PLACE OF MEETINGS.........................................................96
SECTION 14.3 PERSONS ENTITLED TO VOTE AT MEETINGS.......................................................96
SECTION 14.4 QUORUM; ACTION.............................................................................97
SECTION 14.5 ATTENDANCE AT MEETINGS; DETERMINATION OF VOTING RIGHTS;
CONDUCT OF ADJOURNMENT OF MEETINGS.......................................................98
SECTION 14.6 COUNTING VOTES AND RECORDING ACTION OF MEETINGS............................................98
SECTION 14.7 ACTION WITHOUT MEETING.....................................................................99
ARTICLE XV NONRECOURSE LIABILITY.................................................................................99
SECTION 15.1 NONRECOURSE LIABILITY......................................................................99
ARTICLE XVI DEPOSITARY BANK.....................................................................................100
SECTION 16.1 DEPOSITARY BANK...........................................................................100
SCHEDULES
SCHEDULE 3.4 GOVERNMENTAL APPROVALS
SCHEDULE 6.2 INSURANCE REQUIREMENTS
EXHIBITS
EXHIBIT 5.1 FORM OF WIRE INSTRUCTIONS
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TRUST INDENTURE
TRUST INDENTURE, dated as of March 1, 2000 (this "INDENTURE"), by and among
AES RED OAK, L.L.C., a Delaware limited liability company, (the "COMPANY"), its
principal office and mailing address being 1001 North 19th Street, Arlington,
Virginia 22209, THE BANK OF NEW YORK, as trustee (the "TRUSTEE"), its corporate
trust office and mailing address being at 101 Barclay Street, Floor 21W, New
York, New York 10286, and THE BANK OF NEW YORK, as depositary bank (the
"DEPOSITARY BANK"), its office and mailing address being at 101 Barclay Street,
Floor 21W, New York, New York 10286.
W I T N E S S E T H:
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WHEREAS, the Company has duly authorized the creation of bonds, debentures,
promissory notes or other evidences of indebtedness to be issued in one or more
series (the "Bonds") up to such principal amount or amounts as may from time to
time be authorized in accordance with the terms of this Indenture; and the
Company has duly authorized the execution and delivery of this Indenture to
secure the Bonds and to provide for the authentication and delivery thereof by
the Trustee;
WHEREAS, the Company wishes to secure the payment of the principal of,
premium, if any, and interest on all the Bonds authenticated and delivered under
this Indenture and issued by the Company and the performance of the covenants
therein and herein contained and to mortgage, pledge and assign substantially
all of its assets, including the proceeds of the sale of the Bonds to the
Trustee pursuant to this Indenture;
WHEREAS, all obligations of the Company under this Indenture shall be
secured as set forth in this Indenture and the other Security Documents; and
WHEREAS, all acts necessary to make this Indenture and the other Security
Documents valid instruments, in accordance with its and their terms, have been
done.
NOW, THEREFORE, in consideration of the premises and of the purchase of the
Bonds by the Bondholders thereof, and in order to secure the payment of the
principal of and premium, if any, and interest on all the Bonds from time to
time Outstanding and the performance of the covenants therein and herein
contained and to declare the terms and conditions on which such Bonds are
secured, the Company has granted certain security interests as provided in the
other Security Documents and hereby grants, bargains, mortgages, sells,
releases, conveys, assigns, transfers, pledges, sets over and confirms to the
Trustee, and grants to the Trustee a security interest in, all right, title and
interest of the Company in and to the Indenture Accounts (including any and all
funds contained therein or hereafter delivered to the Trustee for deposit
therein), including, in each case, all funds received and the right to receive
funds thereunder;
TO HAVE AND TO HOLD all the same with all privileges and appurtenances
hereby given, granted, pledged and assigned or agreed or intended so to be, unto
the Trustee, and its successors in such trust and to it and its assigns forever;
IN TRUST, NEVERTHELESS, for the equal and proportionate benefit and
security of the Bondholders from time to time of all Outstanding Bonds;
PROVIDED, HOWEVER, that if the right, title and interest of the Trustee in
and to the Indenture Accounts shall have ceased, terminated and become void in
accordance with Article XIII hereof, then and in that case, subject to the
provisions of Article XII, this Indenture and the estate and rights hereby
granted shall cease, terminate and be void, and the Trustee shall cancel and
discharge this Indenture and execute and deliver to the Company such instruments
as the Company shall prepare and require to evidence the discharge hereof;
otherwise this Indenture shall be and remain in full force and effect; and
THE PARTIES HEREBY COVENANT AND AGREE AS FOLLOWS:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1 DEFINITIONS, CONSTRUCTION.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(i) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(ii) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles of the United States;
(iii) all references in this Indenture to designated "Schedules,"
"Exhibits," "Articles," "Sections" and other subdivisions are to the
designated Schedules, Exhibits, Articles, Sections and other subdivisions
of this Indenture;
(iv) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(v) unless otherwise specified herein, any agreement or instrument
defined or referred to herein shall include any amendments, modifications
and supplements thereto and waivers thereof made in accordance with the
terms of such agreement or instrument;
(vi) unless otherwise specified herein, each reference to a Person
shall include the successors and permitted assigns of such Person; and
(vii) unless otherwise specified herein, each reference to an act,
law, rule, regulation or ordinance shall include such act, law, rule,
regulation or ordinance as
2
amended, modified or supplemented and any successor or replacement for any
such act, law, rule, regulation or ordinance.
"ACCEPTABLE CREDIT PROVIDER" has the meaning specified in the Collateral
Agency Agreement.
"ACCEPTABLE CREDIT SUPPORT" has the meaning specified in the Collateral
Agency Agreement.
"ACT" when used with respect to any Bondholder, has the meaning specified
in Section 1.4.
"ADVANCES" has the meaning specified in the Collateral Agency Agreement.
"AES" means The AES Corporation, a Delaware corporation.
"AES RED OAK" means AES Red Oak, Inc., a Delaware corporation.
"AES URC" means AES Red Oak Urban Renewal Corporation, a New Jersey
corporation.
"AFFILIATE" with respect to any Person, means any other Person directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, the term "CONTROL"
(including the correlative meanings of the terms "CONTROLLING", "CONTROLLED BY"
and "UNDER COMMON CONTROL WITH"), as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting stock or other equity interests or by contract or otherwise.
"AFFILIATE SUBORDINATED DEBT" means an unsecured, subordinated loan or
loans from any Affiliate of the Company pursuant to an Affiliate Subordinated
Loan Agreement.
"AFFILIATE SUBORDINATED DEBT PROVIDER" means any Affiliate of the Company
providing Affiliate Subordinated Debt pursuant to an Affiliate Subordinated Loan
Agreement.
"AFFILIATE SUBORDINATED LOAN AGREEMENT" means a binding agreement providing
nonrecourse, unsecured debt financing from an Affiliate Subordinated Debt
Provider to the Company on terms and conditions which meet the requirements set
forth in this Indenture and the Collateral Agency Agreement.
"AFFILIATE TRANSACTION" has the meaning specified in Section 6.10.
"ANNUAL BUDGET" means the annual budget prepared by the Company for each
Fiscal Year in accordance with the requirements of this Indenture.
"APPLICABLE LAW" means any constitution, statute, law, rule, regulation,
ordinance, judgment, order, decree, Governmental Approval, or any published
directive, guideline, requirement or other governmental restriction which has
the force of law, or any determination by, or interpretation of any of the
foregoing by, any judicial authority, binding on a given Person
3
whether in effect as of the date of any Financing Documents or thereafter and in
each case as amended (including, without limitation, all Environmental Laws and
any of the foregoing pertaining to land use or zoning restrictions).
"ASSIGNMENT OF LEASES AND INCOME" means the Assignment of Leases and
Income, by and between the Company and the Collateral Agent.
"AUTHENTICATING AGENT" means any Person acting as Authenticating Agent
hereunder pursuant to Section 10.14(b).
"AUTHORIZED AGENT" means any Paying Agent, Authenticating Agent or Security
Registrar or other agent appointed by the Trustee in accordance with this
Indenture to perform any function that this Indenture authorizes the Trustee or
such agent to perform.
"AUTHORIZED REPRESENTATIVE" of any Person means the individual or
individuals authorized to act on behalf of such Person by the board of
directors, managing member, management committee, board of control or any other
governing body of such Person as designated from time to time in a certificate
of such Person with specimen signatures.
"AUTHORIZED SIGNATORY" means any officer of the Trustee or any other
individual who shall be duly authorized by appropriate corporate action on the
part of the Trustee to authenticate Bonds.
"AVAILABLE ACCOUNTS" means the Project Accounts other than the Construction
Account and the Distribution Account.
"BANKRUPTCY CODE" means the Bankruptcy Reform Act of 1978, Title II of the
United States Code, as amended, and any other Applicable Law with respect to
bankruptcy, insolvency or reorganization that is successor thereto.
"BANKRUPTCY EVENT" has the meaning specified in Section 9.1(h).
"BOARD RESOLUTION" when used with respect to the Company, means a copy of a
resolution certified by the Corporate Secretary or an Assistant Corporate
Secretary of the Company as having been adopted by the board of directors of the
Company and to be in full force and effect on the date of such certification.
"BOND PAYMENT ACCOUNT" means the Bond Payment Account established pursuant
to Section 4.1.
"BOND PAYMENT DATE" has the meaning set forth in the Collateral Agency
Agreement.
"BOND PROCEEDS ACCOUNT" means the Bond Proceeds Account established
pursuant to Section 4.1.
"BONDHOLDER" means a holder of record of any of the Bonds from time to
time.
"BONDS" has the meaning specified in the introductory recitals to this
Indenture.
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"BUSINESS DAY" means any day other than a Saturday or Sunday or other day
on which banks in New York, New York, are authorized or required by law or
executive order to remain closed.
"BUY-DOWN AMOUNTS" means amounts received by the Company from the
Contractor in respect of performance liquidated damages under the EPC Contract.
"CASH AVAILABLE FOR DEBT SERVICE" means, in respect of a specified period,
all funds (i) deposited in the Revenue Account (other than amounts transferred
to such account from the Major Maintenance Reserve Account, the Distribution
Account or the Construction Account), to the extent such specified period
occurred prior to the date of determination, or (ii) projected by the Company on
a reasonable basis to be deposited, to the extent such specified period is to
occur subsequent to the date of determination, in the Revenue Account during
such period minus all funds transferred or projected to be transferred to (a)
the Company for payment of Operating and Maintenance Costs, (b) the Trustee,
Collateral Agent, Working Capital Provider, DSR LOC Provider and the PPA LOC
Provider in respect of Trustee Claims, Collateral Agent Claims, Working Capital
Provider Claims, DSR LOC Provider Claims and PPA LOC Provider Claims,
respectively, and (c) the Working Capital Provider in respect of payments on
working capital loans under the Working Capital Agreement during such period.
"CASUALTY PROCEEDS" means all insurance proceeds (including title insurance
proceeds) or other amounts actually received on account of an Event of Loss,
except proceeds of business interruption insurance.
"CHANGE IN CONTROL" means any failure by AES, at any time while Bonds are
Outstanding, to maintain directly or indirectly at least a 51% voting and
economic interest in the Company, unless prior to giving effect to the reduction
in AES's voting or economic interest in the Company either (i) each of the
Rating Agencies provides a Ratings Reaffirmation to the Trustee or (ii) the
reduction in AES's voting or economic interest in the Company has been approved
by Bondholders holding at least 66-2/3% in aggregate principal amount of the
Bonds.
"CLOSING DATE" means the date of original issuance of the Bonds.
"CODE" means the Internal Revenue Code of 1986, as amended, or any
comparable successor federal statute.
"COLLATERAL" means: (i) all revenues of the Company and of AES URC; (ii)
the Project Accounts (other than the Debt Service Reserve Account); (iii) all
real and personal property and property interests of the Company (including its
interest in the URC Collateral) and its ownership interests in AES URC; (iv)
Eminent Domain Proceeds, insurance proceeds, Casualty Proceeds, condemnation
proceeds and liquidated damages payments, if any, of the Company; (v) all
Project Contracts; (vi) all ownership interests in the Company; (vii) the Equity
Contributions and all rights under the Equity Subscription Agreement; and (viii)
in respect of the Bondholders only, the Indenture Accounts, the Debt Service
Reserve Account and the DSR Letter of Credit (other than the DSR LOC Provider's
right to certain proceeds under the DSR Letter of Credit.
5
"COLLATERAL AGENCY AGREEMENT" means the Collateral Agency and Intercreditor
Agreement, by and among the Company, the Trustee, the Collateral Agent, the
Working Capital Provider, the DSR LOC Provider, the PPA LOC Provider and the
Depositary Bank.
"COLLATERAL AGENT" means THE BANK OF NEW YORK and any successor or assign
as Collateral Agent under the Collateral Agency Agreement.
"COMMERCIAL OPERATION DATE" has the meaning set forth in the Power Purchase
Agreement.
"COMPANY" has the meaning specified in the preamble to this Indenture.
"COMPANY REQUEST" and "COMPANY ORDER" means, respectively, a written
request or order signed in the name of the Company by an Authorized
Representative of the Company, and delivered to the Trustee.
"CONSENTS TO ASSIGNMENT" means the consents to assignment with respect to
the Project Contracts.
"CONSTRUCTION ACCOUNT" has the meaning specified in the Collateral Agency
Agreement.
"CONSTRUCTION INTEREST ACCOUNT" means the Construction Interest Account
established pursuant to Section 4.1.
"CONTRACTOR" means Raytheon Engineers & Constructors, Inc., a Delaware
corporation.
"CORPORATE TRUST OFFICE" means the designated corporate trust office of the
Trustee at which at any particular time corporate trust business of the Trustee
shall be administered, which at the date of this Indenture is Corporate Trust
Administration, 101 Barclay Street, Floor 21W, New York, New York 10286, or such
other office as may be designated by the Trustee to the Company.
"DATE CERTAIN" means June 30, 2003, the final date by which the Facility
must commence commercial operation pursuant to the Power Purchase Agreement.
"DEBT" means, in respect of any Person, Indebtedness.
"DEFAULT" means an event or condition that, with the giving of notice or
lapse of time, or both, would become an Event of Default.
"DEPOSITARY BANK" has the meaning specified in the preamble to this
Indenture.
"DISTRIBUTION ACCOUNT" has the meaning specified in the Collateral Agency
Agreement.
"DSR LETTER OF CREDIT" means a letter of credit provided by the Company in
respect of all or a portion of the DSRA Required Balance.
6
"DSR LOC ISSUING BANK" means Dresdner Bank AG, acting through its New York
Branch, or any other financial institution providing the DSR Letter of Credit
pursuant to the DSR LOC Reimbursement Agreement.
"DSR LOC LOAN" means a loan resulting from a drawing on the DSR Letter of
Credit.
"DSR LOC PROVIDER" means the Agent under the DSR LOC Reimbursement
Agreement acting for and on behalf of the Banks party thereto and the DSR LOC
Issuing Bank; PROVIDED, HOWEVER, that references to the long-term debt rating of
the DSR LOC Provider shall be deemed to refer to the debt rating of the DSR LOC
Issuing Bank.
"DSR LOC PROVIDER CLAIMS" means all obligations of the Company, now or
hereafter existing, to pay administrative fees, costs, expenses, liabilities or
indemnities under the DSR LOC Reimbursement Agreement.
"DSR LOC REIMBURSEMENT AGREEMENT" means the Debt Service Reserve Letter of
Credit and Reimbursement Agreement, by and among the DSR LOC Provider, the
Company and the banks named therein, pursuant to which the DSR LOC Issuing Bank
will issue the DSR Letter of Credit.
"DSRA REQUIRED BALANCE" means an amount equal to the next succeeding two
quarterly scheduled payments of principal and interest due on the Outstanding
Bonds, plus, if a DSR Letter of Credit is to be provided, six months of interest
on the maximum amount of such DSR Letter of Credit.
"EMERGENCY CAPITAL EXPENDITURES" means capital expenditures required to be
made to prevent or mitigate an emergency situation in respect of the Facility.
"EMINENT DOMAIN PROCEEDS" means all amounts and proceeds actually received
in respect of any Event of Eminent Domain.
"ENVIRONMENTAL LAW" means any Governmental Requirement in effect from time
to time governing or relating to (i) the environment, (ii) releases or
threatened releases of Hazardous Materials including, without limitation,
investigation, monitoring and abatement of such releases and (iii) the
manufacture, handling, transport, use, treatment, storage or disposal of
Hazardous Materials or materials containing Hazardous Materials.
"EPC CONTRACT" means the Agreement for Engineering, Procurement and
Construction Services, dated as of October 15, 1999 by and between the Company
and the Contractor.
"EQUITY CONTRIBUTIONS" means the equity contributions required to be made
by AES Red Oak pursuant to the Equity Subscription Agreement.
"EQUITY SUBSCRIPTION AGREEMENT" means the Equity Subscription Agreement, by
and among AES Red Oak, the Company and the Collateral Agent, pursuant to which
AES Red Oak shall agree to make certain equity contributions to the Company.
7
"ERISA" means the United States Employee Retirement Income Security Act of
1974, as amended.
"EVENT OF DEFAULT" has the meaning specified in Section 9.1.
"EVENT OF EMINENT DOMAIN" means any compulsory transfer or taking or
transfer under threat of compulsory transfer or taking of all or a material
portion of the Facility or Site by any Governmental Authority for more than one
year unless such transfer or taking is the subject of a Good Faith Contest.
"EVENT OF LOSS" means an event which causes all or a material portion of
the Facility or Site to be damaged, destroyed or rendered unfit for normal use
for any reason whatsoever including through a failure of title.
"FACILITY" means the 830 megawatt (net) gas-fired combined cycle electric
generating facility located in the Borough of Sayreville, Middlesex County, New
Jersey, together with all machinery, equipment, improvements and other personal
property and fixtures constituting such facility.
"FACILITY CAPACITY" has the meaning specified in the Power Purchase
Agreement.
"FINAL MATURITY DATE" means the latest Stated Maturity of any of the Bonds.
"FINANCING DOCUMENTS" means the Indenture, the Bonds, the Working Capital
Agreement and any evidence of indebtedness thereunder entered into, the DSR LOC
Reimbursement Agreement and any evidence of indebtedness thereunder entered
into, the PPA LOC Reimbursement Agreement and any evidence of indebtedness
thereunder entered into, the Equity Subscription Agreement, the Collateral
Agency Agreement, the Registration Rights Agreement and the Security Documents.
"FINANCING LIABILITIES" has the meaning specified in the Collateral Agency
Agreement.
"FISCAL YEAR" means the period of time beginning on January 1 of each year
and ending on December 31 of such year; PROVIDED, that the initial Fiscal Year
shall commence on the Closing Date and shall end on December 31, 2000.
"GAAP" means generally accepted accounting principles in the United States
as in effect from time to time.
"GDPIPD" means the Gross Domestic Product Implicit Price Deflator for a
calendar year as published in the United States Department of Commerce, Bureau
of Analysis publication entitled "SURVEY OF CURRENT BUSINESS". If the Gross
Domestic Product Implicit Price Deflator ceases to exist or is no longer
available, the Company, with the approval of the Independent Engineer (such
approval not to be unreasonably withheld or delayed), shall designate a
substitute index that is reasonably similar to the Gross Domestic Product
Implicit Price Deflator.
8
"GOOD FAITH CONTEST" means the contest of an item if: (i) the item is
diligently contested in good faith by appropriate proceedings timely instituted,
(ii) adequate reserves or bonding are established in accordance with GAAP with
respect to the contested item and (iii) during the period of such contest, the
enforcement of any contested item is effectively stayed.
"GOVERNMENTAL APPROVAL" means any authorization, consent, approval,
concession privilege, waiver, exemption, variance, registration, filing,
certification, permission, permit and license with or notice to any Governmental
Authority.
"GOVERNMENTAL AUTHORITY" means the federal government of the United States,
any state of the United States or political subdivision thereof, and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government and any other governmental entity,
instrumentality, agency, authority or commission.
"GOVERNMENTAL OBLIGATIONS" means any of the following which are noncallable
and which at the time of investment are legal investments under the laws of the
state for the funds proposed to be invested therein: (i) direct obligations of,
or obligations the payment of principal of and interest on which are
unconditionally guaranteed as to full and timely payment by, the United States;
(ii) direct obligations of, or participation certificates guaranteed by, Federal
National Mortgage Association, Government National Mortgage Association, or
Federal Home Loan Mortgage Corporation so long as such entities shall be
federally chartered or any other comparable federal agency hereafter created to
the extent that such obligations or certificates are unconditionally guaranteed
by the United States; or (iii) obligations of any state of the United States,
any political subdivision thereof or any agency or instrumentality thereof, if
such obligations are secured by direct obligations of, or obligations the
principal and interest on which are fully or unconditionally guaranteed by, the
United States, and the principal of and interest on which shall be sufficient to
pay as due the principal of and interest on such obligations.
"GOVERNMENTAL REQUIREMENT" means any Applicable Law or Governmental
Approval applicable to the Company or the Facility.
"GUARANTEED INVESTMENT CONTRACT" means an agreement with a Guaranteed
Investment Contract Provider and providing for the investment of funds.
"GUARANTEED INVESTMENT CONTRACT PROVIDER" means a bank, insurance company
or other financial institution whose senior unsecured debt obligations are rated
at least "A" or the equivalent by Moody's or S&P.
"GUARANTEED PROVISIONAL ACCEPTANCE DATE" has the meaning set forth in the
EPC Contract.
"HAZARDOUS MATERIALS" means (i) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, and transformers or other equipment that
contain dielectric fluid containing polychlorinated biphenyls ("PCBs") and any
other chemicals, materials or substances which are now or hereafter become
defined as or included in the definition of "hazardous substances", "hazardous
wastes",
9
"hazardous materials", "extremely hazardous wastes", "restricted hazardous
wastes", "toxic substances" or "toxic pollutants", or words of similar import,
under Environmental Laws, including but not limited to the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended (42
U.S.C. Section 9601 ET SEQ.); the Hazardous Material Transportation Act, as
amended (42 U.S.C. Section 1801 ET SEQ.); the Resource Conservation and Recovery
Act, as amended (42 U.S.C. Section 6901 ET SEQ.); the Toxic Substances Control
Act, as amended (15 U.S.C. Section 2601); the Clean Air Act, as amended (42
U.S.C. Section 7401 ET SEQ.); the Federal Water Pollution Control Act, as
amended (33 U.S.C. Section 1251 ET SEQ.); or (ii) any other chemical, material,
substance or waste declared to be hazardous or toxic by any Governmental
Authority, exposure to which is now or hereafter prohibited, limited or
regulated by any Governmental Authority.
"HOLDER" means a Person whose name is registered in the Security Register.
"IMPOSITIONS" means all duties, taxes, assessments, dues, charges, fees,
excises, levies, license and permit fees, impositions, water rates, sewer rents
and other charges, ordinary or extraordinary, whether foreseen or unforeseen, of
any kind whatsoever, (i) now or hereafter levied or assessed or imposed against
or upon or in respect of the Mortgaged Property or (ii) which now is or may be
levied or assessed against the Income (as defined in the Mortgage) by virtue of
any present or future law, as well as all income taxes, assessments and other
governmental charges levied and imposed by any Governmental Authority upon or
against the Company in respect of the Mortgaged Property or any part thereof, to
the extent the same is in lieu of or in substitution of the items described in
clause (i). Impositions shall not include any taxes imposed on the net income,
gross receipts or any franchise taxes of the Trustee or Collateral Agent, except
as provided in this Indenture.
"INDEBTEDNESS" of any Person means, at any date, without duplication, (i)
all obligations of such Person for borrowed money (including obligations with
respect to letters of credit issued for the account of such Person), (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments (excluding "deposit only" endorsements on checks payable to
the order of such Person), (iii) all obligations of such Person to pay the
deferred purchase price of property or services (excluding accounts payable and
similar obligations arising in the ordinary course of business which are not
more than 90 days past due), (iv) all obligations of such Person as lessee under
capital leases to the extent required to be capitalized on the books of such
Person in accordance with GAAP and the debt portion of any leveraged lease not
required to be capitalized, (v) all obligations of other Persons of the type
referred to in clauses (i) through (iv) of this definition guaranteed by such
Person, whether or not secured by a Lien or other security interest on any asset
of such Person and (vi) all Indebtedness of another Person secured by a Lien on
any property owned by the first Person (whether or not such indebtedness has
been assumed or guaranteed by such first Person).
"INDENTURE" means this instrument as originally executed and as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into in accordance with the provisions hereof.
"INDENTURE ACCOUNTS" has the meaning specified in Section 4.1.
10
"INDENTURE COLLATERAL" has the meaning specified in Section 9.3.
"INDEPENDENT ENGINEER" means, initially, Stone & Webster Management
Consultants, Inc., and thereafter any other engineering or consulting entity
acting as independent engineer under the Financing Documents.
"INDEPENDENT FORECAST" has the meaning specified in Section 6.3.
"INDEPENDENT INSURANCE ADVISOR" means, initially, AON Risk Services, Inc.,
or another nationally recognized insurance advisory firm appointed as insurance
advisor by the Company.
"INITIAL PURCHASERS" means Lehman Brothers Inc. (as Lead Manager) and
Dresdner Kleinwort Benson North America LLC (as Co-Manager), the initial
purchasers of the Bonds.
"INSTITUTIONAL ACCREDITED INVESTORS" means "accredited investors" as such
term is defined under the Securities Act, Rule 501(a)(1), (2), (3) or (7).
"INTERCONNECTION AGREEMENT" means the Generation Facility Transmission
Interconnection Agreement, dated as of April 27, 1999, by and between the
Company and Jersey Central Power & Light Company d/b/a GPU Energy.
"INTEREST PAYMENT DATE" means each February 28, May 31, August 31 and
November 30, commencing on the date set forth in the Bonds.
"INTEREST PAYMENT SUBACCOUNT" means the Interest Payment Subaccount of the
Bond Payment Account established pursuant to Section 4.1.
"INVESTMENT GRADE" means a rating in one of the four highest categories
(without regard to subcategories within such rating categories) by S&P and
Moody's (or an equivalent rating by another nationally recognized credit rating
agency if none of such corporations is rating the subject debt instrument).
"LIEN" means any mortgage, pledge, security interest, hypothecation,
collateral assignment, encumbrance, lien (statutory or other), or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of any financing statement under the
Uniform Commercial Code or comparable law of any jurisdiction).
"MAINTENANCE SERVICES AGREEMENT" means the Maintenance Program Parts, Shop
Repairs and Scheduled Outage TFA Services Contract, dated as of December 8,
1999, by and between the Company and Siemens Westinghouse Power Corporation.
"MAJOR MAINTENANCE RESERVE ACCOUNT" has the meaning specified in the
Collateral Agency Agreement.
11
"MAKE-WHOLE PREMIUM" means an amount calculated as of the date (the
"DETERMINATION DATE") set for the redemption or repurchase of the Bonds of any
series as follows:
(i) the average life of the remaining scheduled payments of principal
in respect of Outstanding Bonds of such series (the "REMAINING AVERAGE
LIFE") shall be calculated as of the Determination Date;
(ii) the yield to maturity shall be calculated for the United States
Treasury security having an average life equal to the Remaining Average
Life of such series and trading in the secondary market at the price
closest to the principal amount thereof (the "PRIMARY ISSUE"); PROVIDED,
HOWEVER, that if no United States Treasury security has an average life
equal to the Remaining Average Life of such series, the yields (the "OTHER
YIELDS") for the two maturities of United States Treasury securities having
average lives most closely corresponding to such Remaining Average Life and
trading in the secondary market at the price closest to the principal
amount thereof shall be calculated, and the yield to maturity for the
Primary Issue shall be the yield interpolated or extrapolated from such
Other Yields on a straightline basis, rounding in each of such relevant
periods to the nearest month;
(iii) the discounted present value of the then remaining scheduled
payments of principal and interest (but excluding that portion of any
scheduled payment of interest that is actually due and paid on the
Determination Date) in respect of Outstanding Bonds of such series shall be
calculated as of the Determination Date using a discount factor equal to
the sum of (x) the yield to maturity for the Primary Issue, PLUS (y) 50
basis points;
(iv) the amount of Make-Whole Premium in respect of Bonds of such
series to be redeemed or repurchased shall be an amount equal to (x) the
discounted present value of such Bonds to be redeemed determined in
accordance with clause (iii) above, MINUS (y) the unpaid principal amount
of such Bonds; PROVIDED, HOWEVER, that the Make-Whole Premium shall not be
less than zero; and
(v) such calculation shall be made by an independent investment
banking institution of national standing appointed by the Company.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse change, or an event
or occurrence which would reasonably be expected to result in a material adverse
change, in the financial condition, or results of operation, of the Company, AES
Red Oak, AES URC or operation of the Facility or (ii) any event or occurrence of
whatever nature which would materially and adversely change (a) the Company's,
AES Red Oak's, or AES URC's ability to perform their respective obligations
under the Financing Documents or (b) the Senior Parties' security interests in
the Collateral under the Security Documents.
"MEMBER" means a Person who holds an ownership interest in the Company,
which for federal income tax purposes is treated as a partner.
12
"MOODY'S" means Moody's Investor Services, Inc., a Delaware corporation.
"MORTGAGE" means the Mortgage, by and between the Company and the
Collateral Agent.
"MORTGAGED PROPERTY" has the meaning specified in the Mortgage and the URC
Mortgage.
"OFFICER'S CERTIFICATE" means a certificate delivered to the Trustee or the
Collateral Agent, as applicable, that has been signed by an Authorized
Representative of the Company or an Authorized Representative of the board of
directors of the Company.
"OPERATING AND MAINTENANCE COSTS" means all actual cash maintenance and
operation costs to be incurred and paid for with respect to the Facility in any
particular period (other than any amounts paid under the URC Documents),
including franchise, sales, property and other similar taxes (but not taxes on
or measured by net income), payments for the supply and transportation of fuels,
insurance, consumables, payments under any lease (other than lease payments
under the URC Documents), payments pursuant to the Project Contracts (including
payments under the Operations Agreement, but excluding payments made under the
EPC Contract, the URC Documents (other than additional rent payments thereunder)
and any payments under the Project Contracts that are expressly subordinated),
repair and replacement costs for equipment included in the Facility, reasonable
legal fees and expenses paid by the Company in connection with the management,
maintenance or operation of the Facility, fees paid in connection with
obtaining, transferring, maintaining or amending any Governmental Approvals,
employee salaries, wages and other employment-related costs and reasonable
general and administrative expenses, all fees, expenses and other payments due
to and all indemnities and other arrangements providing for the payment of
amounts to the lenders, arrangers, underwriters, Initial Purchasers, independent
consultants, their agents, counsel and employees in connection with the
Indebtedness of the Company (but excluding transaction costs associated with the
offering and issuance of the Bonds), but exclusive in all cases of (i) non-cash
charges, including depreciation or obsolescence charges or reserves therefor,
amortization of intangibles or other bookkeeping entries of a similar nature,
(ii) all interest charges, (iii) all commitment fees, underwriting fees and
other similar fees due and payable in connection with Indebtedness of the
Company, (iv) maintenance costs funded from amounts on deposit in the Major
Maintenance Reserve Account and (v) solely for purposes of priority of payment,
fees (but not costs) payable to the Operator, except to the extent that there
are sufficient funds available in the Revenue Account to make all required
payments and deposits specified in clauses FIRST through SIXTH of Section 3.10
of the Collateral Agency Agreement.
"OPERATIONS AGREEMENT" means the Development and Operations Services
Agreement, by and between the Company and the Operator.
"OPERATOR" means AES Sayreville, L.L.C., a Delaware limited liability
company.
"OPINION OF COUNSEL" means a written opinion of counsel for any Person
either expressly referred to herein or otherwise satisfactory to the Trustee
which may include, without limitation, counsel for the Company, whether or not
such counsel is an employee of any of such Person.
13
"OPTIONAL MODIFICATIONS" means all material modifications to the Facility
that are not Required Modifications to the extent that the Company certifies and
the Independent Engineer confirms, which confirmation may not be unreasonably
withheld or delayed, that such modifications: (i) are not reasonably likely to
result in a Material Adverse Effect, (ii) are technically feasible and (iii) are
reasonably expected to improve the operation or reliability of the Facility.
"OUTSTANDING," when used with respect to Bonds, means, as of the date of
determination, all Bonds theretofore authenticated and delivered under this
Indenture, except: (i) Bonds theretofore canceled by the Trustee or delivered to
the Trustee for cancellation; (ii) Bonds or portions thereof deemed to have been
paid within the meaning of Section 13.1; and (iii) Bonds that have been
exchanged for other Bonds or Bonds in lieu of which other Bonds have been
authenticated and delivered pursuant to this Indenture; PROVIDED, HOWEVER, that
in determining whether the Bondholders of the requisite principal amount of
Outstanding Bonds have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or whether or not a quorum is present at a
meeting of Bondholders, Bonds owned by the Company or any Affiliate of the
Company shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver or upon any
such determination as to presence of a quorum, only Bonds that a Responsible
Officer of the Trustee actually knows to be so owned shall be so disregarded.
"PAYING AGENT" means any Person acting as Paying Agent hereunder pursuant
to Section 10.14(b).
"PERMITTED INDEBTEDNESS" means, collectively: (i) the Bonds, (ii)
indebtedness incurred under the DSR LOC Reimbursement Agreement or any PPA LOC
Reimbursement Agreement; (iii) letters of credit and other financial obligations
arising under the Project Contracts other than the PPA; (iv) Affiliate
Subordinated Debt; (v) purchase money obligations incurred to finance discrete
items of equipment not comprising an integral part of the Project that extend
only to the equipment being financed and that do not in the aggregate have
annual debt service or lease obligations exceeding $5 million (escalated at
GDPIPD); (vi) trade accounts payable (other than for borrowed money) arising,
and accrued expenses incurred, in the ordinary course of business so long as
such trade accounts payable are payable within ninety (90) days of the date the
respective goods are delivered or the respective services are rendered; (vii)
obligations in respect of surety bonds or similar instruments in an aggregate
amount not exceeding $5 million at any one time outstanding; (viii) any lines of
credit for working capital purposes, including the Working Capital Agreement, in
the maximum amount of $5 million; (ix) Senior Debt or Subordinated Debt (from
Persons who are not Affiliates of the Company) for Required Modifications and
Optional Modifications; PROVIDED, HOWEVER, that the Company may issue (a) Senior
Debt on a parity basis with the Bonds only for Required Modifications and only
if (1) the projected average and minimum Senior Debt Service Coverage Ratios
(after giving effect to such Senior Debt) are at least 1.30 to 1.0 and 1.20 to
1.0, respectfully, through the end of the PPA Term (taken as one period) and at
least 2.0 to 1.0 and 1.70 to 1.0, respectfully, during the Post-PPA Period
(taken as one period) or (2) the Company provides a Ratings Reaffirmation from
each of the Ratings Agencies; (b) Subordinated Debt for Required Modifications
only if (1)(A) the projected average Total Debt Service Coverage Ratio (after
taking
14
into account such Subordinated Debt) is at least 1.20 to 1.0 through the end of
the PPA Term (taken as one period) and at least 1.65 to 1.0 during the Post-PPA
Period (taken as one period) and (B) the projected minimum Total Debt Service
Coverage Ratio (after giving effect to such Subordinated Debt) is at least 1.1
to 1.0 through the PPA Term and at least 1.35 to 1.0 during the Post-PPA Period,
or (2) the Company provides a Ratings Reaffirmation from each of the Ratings
Agencies; or (c) Subordinated Debt for Optional Modifications only if the
Company provides a Ratings Reaffirmation from each of the Ratings Agencies. In
the case of clauses (b) and (c) of the preceding proviso, the final maturity
date of such Subordinated Debt shall not be earlier than the Final Maturity Date
and the average life of such Subordinated Debt must be no shorter than the
average remaining life of the Bonds.
"PERMITTED INVESTMENTS" means investments that are any of the following,
which investments shall be made so as to mature or be subject to potential
redemption not later than the date on which the proceeds of the same are
expected to be required to pay Project Costs or Operating and Maintenance Costs:
(i) Governmental Obligations; (ii) interest-bearing deposit accounts (which may
be represented by certificates of deposit) in national, state or foreign
commercial banks whose outstanding long-term debt is rated at least A or the
equivalent by S&P and Moody's; (iii) bankers' acceptances drawn on and accepted
by any domestic or foreign commercial banks whose outstanding long-term debt is
rated at least A or the equivalent by S&P and Moody's; (iv) direct obligations
of, obligations guaranteed by, and any other obligations the interest on which
is excluded from income for federal income tax purposes issued by, any state of
the United States, the District of Columbia or the Commonwealth of Puerto Rico
or any political subdivision, agency, authority or instrumentality of any of the
foregoing, which are rated at least A or the equivalent by S&P and Moody's; (v)
commercial paper issued by any corporation which is rated at least A-1 or the
equivalent by S&P and at least P-1 or the equivalent by Moody's; (vi)
instruments issued by an investment company rated at least A or the equivalent
by S&P and Moody's having a portfolio consisting of at least ninety-five percent
(95%) or more of the securities described in paragraphs (i) through (v) above;
(vii) repurchase agreements with banking institutions and securities dealers
recognized as primary dealers by the Federal Reserve Bank of New York whose
outstanding long-term and short-term debt is rated at least A or the equivalent
by S&P and Moody's; (viii) Guaranteed Investment Contracts; (ix) funding
agreements with primary dealers reasonably acceptable to the Trustee; and (x)
other Investment Grade instruments or instruments issued or guaranteed by
Investment Grade entities (including unsecured promissory notes) or permitted
investments mutually agreed to by the Trustee and the Company. Each of the
investments described in clauses (vii), (viii), (ix) and (x) above shall contain
a provision for the unwinding of such investment within three (3) Business Days
if the long-term or short-term debt rating of the bank, primary dealer or other
financial institution, as the case may be, providing such investment falls below
A or the equivalent by S&P and Moody's or such entity defaults on the payment of
any of its obligations to or on behalf of the Company, unless such investment is
collateralized with government obligations in an amount equal to at least one
hundred two percent (102%) of the face amount of such investments or such rating
is reinstated on or prior to such unwind date.
"PERMITTED LIENS" means, collectively, (i) Liens specifically created,
required or permitted by the Financing Documents; (ii) Liens for taxes which are
either not yet due, are due but payable
15
without penalty or are the subject of a Good Faith Contest by the Company; (iii)
any exceptions to title which are contained in the title insurance policy for
the Site; (iv) such minor defects, easements, rights of way, restrictions,
irregularities, encumbrances and clouds on title and statutory liens that do not
materially impair the property affected thereby and that do not individually or
in the aggregate materially impair the value of the security interests granted
under the Security Documents; (v) deposits or pledges to secure statutory
obligations or appeals; release of attachments, stay of execution or injunction;
performance of bids, tenders, contracts (other than for the repayment of
borrowed money) or leases, or for purposes of like general nature in the
ordinary course of business; (vi) Liens in connection with workmen's
compensation, unemployment insurance or other social security or pension
obligations; (vii) legal or equitable encumbrances deemed to exist by reason of
the existence of any litigation or other legal proceeding if the same is the
subject of a Good Faith Contest (excluding any attachment prior to judgment,
judgment lien or attachment in aid of execution on a judgment); and (viii)
mechanic's, workmen's, materialmen's, construction or other like Liens arising
in the ordinary course of business or incident to the construction or
improvement of any property in respect of obligations which are not yet due or
which are the subject of a Good Faith Contest.
"PERSON" means any individual, sole proprietorship, corporation,
partnership, joint venture, trust, unincorporated association, institution,
Governmental Authority, limited liability company or any other entity, except
under certain provisions of this Indenture, the Trustee is not a "PERSON".
"PJM MARKET" means the control area recognized by the North American
Electric Reliability Council as the "PJM Control Area".
"PLACE OF PAYMENT," when used with respect to the Bonds of any series,
means the office or agency maintained pursuant to Section 10.14(a) and such
other place or places, if any, where the principal of, and premium, if any, and
interest on the Bonds of such series are payable as specified in the Series
Supplemental Indenture setting forth the terms of the Bonds of such series.
"PLEDGE AGREEMENT" means the Pledge and Security Agreement, by and among
AES Red Oak, the Company and the Collateral Agent.
"POST-PPA PERIOD" means that period commencing six (6) months prior to the
end of the PPA Term and ending on the Final Maturity Date.
"POWER MARKETING PLAN" means a marketing and procurement plan prepared by
or on behalf of the Company which describes in reasonable detail the Company's
plan to (i) procure gas to be burned at the Facility and (ii) sell electric
power from the Facility without a Replacement Power Purchase Agreement.
"POWER PURCHASE AGREEMENT" or "PPA" means the Fuel Conversion Services
Capacity and Ancillary Services Purchase Agreement, dated as of September 17,
1999, as amended, by and between the Company and the Power Purchaser.
"POWER PURCHASER" means Williams Energy Marketing & Trading Company, a
Delaware corporation.
16
"PPA GUARANTOR" means The Williams Companies, Inc., a Delaware corporation.
"PPA LETTER OF CREDIT" means the letter of credit issued pursuant to the
PPA LOC Reimbursement Agreement as provided by the Company to the Power
Purchaser in satisfaction of the requirements of Section 18.2 of the Power
Purchase Agreement.
"PPA LOC ISSUING BANK" means Dresdner Bank AG, acting through its New York
Branch, or any other financial institution providing the PPA Letter of Credit
pursuant to the PPA LOC Reimbursement Agreement.
"PPA LOC PROVIDER" means the Agent under the PPA LOC Reimbursement
Agreement acting for and on behalf of the Banks party thereto and the PPA LOC
Issuing Bank; PROVIDED, HOWEVER, that references to the long-term debt rating of
the PPA LOC Provider shall be deemed to refer to the debt rating of the PPA LOC
Issuing Bank.
"PPA LOC PROVIDER CLAIMS" means all obligations of the Company, now or
hereafter existing, to pay administrative fees, costs, expenses, liabilities or
indemnities to the PPA LOC Provider under the PPA LOC Reimbursement Agreement.
"PPA LOC REIMBURSEMENT AGREEMENT" means the Power Purchase Agreement Letter
of Credit and Reimbursement Agreement, by and among the PPA LOC Provider, the
Company and the banks named therein, pursuant to which the PPA LOC Issuing Bank
may issue the PPA Letter of Credit.
"PPA TERM" means that period during which the Power Purchaser is obligated
to purchase the Facility Capacity pursuant to the terms of the Power Purchase
Agreement.
"PREDECESSOR BONDS" with respect to any particular Bond, means every
previous Bond evidencing all or a portion of the same debt as that evidenced by
such particular Bond, for the purposes of this definition, any Bond
authenticated and delivered under Section 2.9 in lieu of a lost, destroyed or
stolen Bond shall be deemed to evidence the same debt as the lost, destroyed or
stolen Bond.
"PREPAYMENT DATE" has the meaning specified in Section 7.2.
"PRINCIPAL PAYMENT DATE" means each February 28, May 31, August 31 and
November 30, on which principal payments are due to the Bondholders, commencing
on the date set forth in the Bonds.
"PRINCIPAL PAYMENT SUBACCOUNT" means the Principal Payment Subaccount of
the Bond Payment Account established pursuant to Section 4.1.
"PROJECT ACCOUNTS" has the meaning specified in Section 3.1 of the
Collateral Agency Agreement.
"PROJECT CONTRACTS" means the Power Purchase Agreement, the Williams
Guaranty, the EPC Contract, the Raytheon Guaranty, the Operations Agreement, the
Maintenance Services
17
Agreement, the Interconnection Agreement, the Services Agreement, the Water
Supply Agreement, the leases between the Company and AES URC related to the
Facility and the Site and each other material contract, license or agreement
related to the development, construction, ownership, leasing, operation or
maintenance of the Facility or the Site, including any agreement referred to in
Section 6.12 with respect to spare parts, but excluding any Financing Document
or Security Document not expressly referred to in this definition.
"PROJECT COSTS" means all costs of developing, financing, constructing,
testing and initial operation of the Facility, including but not limited to: (i)
all amounts payable under the EPC Contract including any contractor bonuses,
Site acquisition and preparation costs, costs of acquisition and construction of
fuel handling and processing equipment, any electric interconnection and
transmission upgrade costs payable by the Company pursuant to the Power Purchase
Agreement, all water interconnection costs payable by the Company and all gas
interconnection costs payable by the Company; (ii) rent payments by the Company
to AES URC and loans by the Company to AES URC, the proceeds of which shall be
used by the Company to construct the portion of the Facility that will be owned
by AES URC; (iii) all development costs and fees, which shall be paid to, or as
designated by, the Company on the Closing Date; (iv) all other Facility-related
costs, including but not limited to fuel-related costs, fees and expenses
payable pursuant to the Operations Agreement and expenses to complete the
construction and financing of the Facility; (v) start-up and testing costs and
initial working capital costs; (vi) initial reserve fund requirements; (vii)
fees and costs payable during construction with respect to the Working Capital
Agreement or with respect to any DSR Letter of Credit, PPA Letter of Credit and
any other letters of credit or security provided under any Project Contract;
(viii) legal and other transaction costs and financing-related fees; (ix) any
other out-of-pocket expenses related to the financing; (x) interest on the Bonds
during construction; (xi) any amounts owed to the Power Purchaser pursuant to
Section 2 of the Power Purchase Agreement; (xii) all amounts payable in respect
of principal of and interest on amounts borrowed under the Working Capital
Agreement prior to the earlier of the Commercial Operation Date and the
Guaranteed Provisional Acceptance Date.
"PROJECT REVENUES" means, for any period, the Company's revenues or income
received (but excluding all revenues received under the URC Documents),
including, without limitation: (i) except as otherwise specified in the
Collateral Agency Agreement, interest and other income earned and credited on
funds deposited in the Project Accounts; (ii) amounts paid by the Power
Purchaser pursuant to the Power Purchase Agreement; (iii) the proceeds of the
sale of any part of the Facility which is not prohibited under this Indenture;
(iv) the proceeds of any insurance claims in respect of an event or occurrence
concerning the Facility that is not an Event of Loss or an Event of Eminent
Domain; and (v) all amounts received by the Company under the Williams Guaranty.
"PROJECTED OPERATING RESULTS" means financial projections relating to
revenues, expenses, and debt service coverage during the period the Bonds are
scheduled to remain Outstanding and included in the final offering circular with
respect to the Bonds.
"PRUDENT OPERATING AND MAINTENANCE PRACTICES" has the meaning specified in
the Operations Agreement.
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"PUHCA" means the Public Utility Holding Company Act of 1935.
"QUALIFIED INSTITUTIONAL BUYER" or "QIB" means a "qualified institutional
buyer" as such term is defined in Rule 144A.
"RATING AGENCY" means each of Moody's and S&P; PROVIDED, that such rating
agency maintains a rating on any Outstanding Bonds.
"RATINGS REAFFIRMATION" means a reaffirmation by each of the Rating
Agencies of their then current credit ratings of any Outstanding Bonds, giving
effect to any transactions giving rise to a request for such reaffirmation.
"RAYTHEON GUARANTY" means the Guaranty, dated as of December 17, 1999, by
Raytheon Company and in favor of the Company.
"REDEMPTION DATE" has the meaning specified in Section 7.2.
"REDEMPTION SUBACCOUNT" means the Redemption Subaccount of the Bond Payment
Account established pursuant to Section 4.1.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement, by
and among the Company and the Initial Purchasers.
"REGULAR RECORD DATE" means, for the Stated Maturity of any Bond of a
series, or for the Stated Maturity of any installment of principal thereof or
payment of interest thereon, the first day of the month (whether or not a
Business Day) in which such Stated Maturity occurs, or any other date specified
for such purpose in the form of Bond of such series attached to the Series
Supplemental Indenture relating to the Bonds of such series.
"REPLACEMENT POWER PURCHASE AGREEMENT" means one or more power purchase
agreements between the Company and one or more Persons, pursuant to which the
Company sells, in aggregate, all or substantially all of the capacity and/or
associated electric energy from the Facility to such Person or Persons at a
commercially reasonable price for a term of not less than the remaining term of
the Power Purchase Agreement.
"REQUIRED BONDHOLDERS" means, at any time, the persons that at such time
own a majority in aggregate principal amount of the Outstanding Bonds.
"REQUIRED CAPITAL EXPENDITURES" means capital expenditures that are
identified as required capital expenditures in the Annual Budget then in effect.
"REQUIRED MODIFICATIONS" means, collectively, those modifications
reasonably necessary for the Facility to (i) remain in compliance with all
material Applicable Laws and Governmental Approvals and (ii) maintain, at a
minimum, the capacity production levels contemplated by the Projected Operating
Results, in either case, as confirmed by the Independent Engineer.
"REQUIRED RATING" means a rating of at least "A" by S&P and "A2" by
Moody's.
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"RESPONSIBLE OFFICER" when used with respect to the Trustee, means any
officer in the Corporate Trust Office of the Trustee (or any successor group of
the Trustee), including any vice president, secretary, assistant vice president,
assistant treasurer and any trust officer or assistant or any other authorized
officer in the Corporate Trust Office of the Trustee that customarily performs
functions similar to those performed by any of the above-designated officers,
and also means, with respect to a particular corporate trust matter, any other
officers to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"RESTRICTED PAYMENTS" means, collectively, (i) distributions including
payments of dividends to holders of ownership interests in the Company, (ii)
payments of principal, interest or premium, if any, on, and any repurchase of,
any Affiliate Subordinated Debt, (iii) prepayments or repurchases of any
Subordinated Debt and (iv) the repurchase by the Company of any ownership
interests in the Company.
"REVENUE ACCOUNT" has the meaning specified in the Collateral Agency
Agreement.
"RULE 144A" means Rule 144A promulgated under the Securities Act.
"S&P" means Standard & Poor's Rating Group, a division of the McGraw-Hill
Companies, Inc.
"SECURED OBLIGATIONS" has the meaning specified in the Collateral Agency
Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"SECURITY AGREEMENT" means the Security Agreement, by and between the
Company and the Collateral Agent.
"SECURITY DOCUMENTS" means, collectively, (i) the Mortgage, (ii) the
Collateral Agency Agreement, (iii) the Security Agreement, (iv) this Indenture,
(v) the Consents to Assignment, (vi) the Pledge Agreement, (vii) the URC
Security Documents and (viii) the Assignment of Leases and Income.
"SECURITY REGISTER" has the meaning specified in Section 2.8.
"SECURITY REGISTRAR" means any Person acting as Security Registrar
hereunder pursuant to Section 10.14.
"SENIOR DEBT" means, collectively, the Outstanding Bonds and any other Debt
outstanding which ranks pari passu with the Bonds upon liquidation or
foreclosure, including any amounts owed to the Working Capital Provider, the DSR
LOC Provider and the PPA LOC Provider; PROVIDED, HOWEVER, that no Debt of the
Company shall rank senior to the Bonds.
"SENIOR DEBT SERVICE" means, for any period, an amount calculated by the
Company as equal to the aggregate of (i) all amounts payable by the Company
during such period in respect of
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principal of, and interest and premium, if any, on, the Bonds, (ii) all amounts
payable by the Company during such period to the provider of any other Senior
Debt, and (iii) all amounts payable by the Company during such period as fees
and other expenses (including any interest thereon) to any fiduciary acting in
such capacity under any of the Security Documents.
"SENIOR DEBT SERVICE COVERAGE RATIO" means for any period, the ratio of (i)
Cash Available for Debt Service for such period to (ii) the amount of Senior
Debt Service due and payable for such period.
"SENIOR PARTIES" has the meaning specified in the Collateral Agency
Agreement.
"SERIES SUPPLEMENTAL INDENTURE" means an indenture supplemental to this
Indenture entered into by the Company and the Trustee for the purpose of
establishing, in accordance with this Indenture, the title, form and terms of
the Bonds of any series; "SERIES SUPPLEMENTAL INDENTURES" means each and every
Series Supplemental Indenture.
"SERVICES AGREEMENT" means the Services Agreement, by and between AES and
the Operator.
"SINKING FUND" has the meaning specified in Section 8.2.
"SINKING FUND REDEMPTION DATES" has the meaning specified in Section 8.2.
"SINKING FUND REQUIREMENTS" has the meaning specified in Section 8.2.
"SITE" means the location of the Facility in the Borough of Sayreville,
Middlesex County, New Jersey, as further described in the Mortgage and the URC
Mortgage.
"SITE LEASE" means the Ground Lease Agreement between the Company as lessor
and AES URC as lessee, in respect of the lease of the Site and all improvements
now or hereafter constructed on the Site (but excluding the part of the Facility
owned by AES URC).
"SPECIAL RECORD DATE" for the payment of any defaulted principal or
interest means a date fixed by the Trustee pursuant to Section 2.10.
"STATED MATURITY," when used with respect to any Bond or any installment of
principal thereof or payment of interest thereon, means the date specified in
such Bond as the fixed date on which such Bond or such installment of principal
or payment of interest is due and payable.
"SUBLEASE" means the Sublease Agreement between AES URC as sublessor and
the Company as sublessee, in respect of the sublease and lease of the Site and
all improvements now or hereafter constructed on the Site (including the part of
the Facility owned by AES URC).
"SUBORDINATED DEBT" means all Debt of the Company issued by a Subordinated
Debt Provider pursuant to a Subordinated Loan Agreement and subordinated in
right of payment to the Bonds in accordance with the terms of the Collateral
Agency Agreement.
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"SUBORDINATED DEBT PROVIDER" means any Person (other than an Affiliate of
the Company) providing Subordinated Debt pursuant to a Subordinated Loan
Agreement.
"SUBORDINATED LOAN AGREEMENT" means a binding agreement with a Subordinated
Debt Provider providing non-recourse debt financing to the Company for
application toward the payment of Project Costs or Operating and Maintenance
Costs on terms and conditions which meet the requirements of the Collateral
Agency Agreement.
"TERM EXPIRATION DATE" has the meaning specified in Section 6.3(e).
"THIRD-PARTY ENGINEER" has the meaning specified in the Collateral Agency
Agreement.
"TOTAL DEBT" means, collectively, (i) Senior Debt, (ii) Subordinated Debt
and (iii) any other Debt permitted under this Indenture and incurred by the
Company.
"TOTAL DEBT SERVICE" means, for any period, an amount calculated by the
Company as equal to the aggregate of (i) all amounts payable by the Company
during such period in respect of Senior Debt Service, (ii) all amounts payable
by the Company during such period in respect of principal of, and interest on,
and premium, if any, on Subordinated Debt and any other Permitted Indebtedness
incurred by the Company and (iii) all amounts payable by the Company during such
period as fees and other expenses (including any interest thereon) to any
fiduciary acting in such capacity with respect to any Debt referred to in clause
(ii) of this definition.
"TOTAL DEBT SERVICE COVERAGE RATIO" means for any period, the ratio of (i)
Cash Available for Debt Service for such period to (ii) the amount of Total Debt
Service due and payable for such period.
"TRANSACTION DOCUMENTS" means the Project Contracts and the Financing
Documents.
"TRUSTEE" has the meaning specified in the preamble of this Indenture until
a successor Trustee shall have become Trustee pursuant to the applicable
provisions of this Indenture, and thereafter "Trustee" means such successor
Trustee.
"TRUSTEE CLAIMS" means all obligations of the Company, now or hereafter
existing, to pay fees, costs, expenses, liabilities or indemnities to the
Trustee under this Indenture.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of New York.
"UNITED STATES" or "U.S." means the United States of America.
"URC COLLATERAL" means (i) all revenues of AES URC, (ii) all real and
personal property and contract rights of AES URC and (iii) all Eminent Domain
Proceeds, Casualty Proceeds, insurance proceeds and liquidated damage payments,
if any, of AES URC.
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"URC DOCUMENTS" means the Site Lease, the Sublease, the Construction Agency
Agreement, the URC Loan Agreement and the URC Security Documents, in each case
by and between the Company and AES URC.
"URC LOAN AGREEMENT" means the promissory note from AES URC payable to the
Company in connection with the loan between AES URC as borrower and the Company
as lender.
"URC MORTGAGE" means the mortgage from AES URC for the benefit of the
Company.
"URC SECURITY AGREEMENT" means the URC Security Agreement by and between
the Company and AES URC.
"URC SECURITY DOCUMENTS" means the URC Mortgage, the URC Assignment of
Leases and Income and the URC Security Agreement, by and between the Company and
AES URC.
"WATER SUPPLY AGREEMENT" means the Water Supply Agreement, dated as of
December 22, 1999, by and between the Company and the Borough of Sayreville.
"WILLIAMS GUARANTY" means the Guaranty, dated as of March 1, 2000, by the
PPA Guarantor in favor of the Company.
"WORKING CAPITAL AGREEMENT" means the Working Capital Agreement, dated as
of March 1, 2000 by and among the Company, Dresdner Bank AG, acting through its
New York Branch, as Agent, Dresdner Bank AG, acting through its New York Branch
and/or Grand Cayman Branch, as Initial Bank and a Bank, and the other Banks
party thereto.
"WORKING CAPITAL PROVIDER" means the Agent under the Working Capital
Agreement acting for and on behalf of the Banks party thereto and the Initial
Bank, and any successors or assigns thereto as Agent for the Banks under the
Working Capital Agreement.
"WORKING CAPITAL PROVIDER CLAIMS" means all obligations of the Company now
or hereafter existing, to pay administrative fees, costs, expenses, liabilities
or indemnities under the Working Capital Agreement.
SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officer's Certificate (upon which the Trustee may conclusively rely
to take such requested action) stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel (upon which the Trustee may conclusively
rely to take such requested action) stating that in the opinion of such counsel
all such conditions precedent, if any, have been complied with, except that in
the case of any such application or request as to which the furnishing of
documents is specifically required by any provision of this Indenture relating
to such particular application or request, no additional certificate or opinion
need be furnished.
23
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.
SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such Person, or
that they be so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and one or more
other such Persons as to other matters, and any such Person may certify or give
an opinion as to such matters in one or several documents. The Trustee may
conclusively presume that all matters required to take action have been covered
by such certificates and opinions delivered at one time.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows or has reason to believe
that the certificate or opinion or representations with respect to the matters
upon which his certificate or opinion is based are erroneous. Any such
certificate or Opinion of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Company, stating that the information with respect to such
factual matters is in the possession of the Company, unless such counsel knows
that the certificate or opinion or representations with respect to such matters
are erroneous.
Any Opinion of Counsel stated to be based on the opinion of other counsel
shall be accompanied by a copy of such other opinion.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
24
SECTION 1.4 ACTS OF BONDHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by any
Bondholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Bondholders in person or by an agent
duly appointed in writing or, alternatively, may be embodied in and evidenced by
the record of such Bondholders voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of such Bondholders duly
called and held in accordance with the provisions of Article XIV, or a
combination of such instruments and any such record. Except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments or record, or both are delivered to the Trustee. Such instrument or
instruments and any such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "ACT" of the Bondholders
signing such instrument or instruments and so voting at any such meeting. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
10.1) conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section 1.4. The record of any meeting of any Bondholders shall
be proved in the manner provided in Section 14.6.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the certificate of any notary public or other
officer of any jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the Person executing such instrument acknowledged to him
the execution thereof, or by an affidavit of a witness to such execution sworn
to before any such notary or other such officer, and where such execution is by
an officer of a corporation or association or a member of a partnership, on
behalf of such corporation, association or partnership, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and
date of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner which the
Trustee deems sufficient.
(c) The principal amount and serial numbers of Bonds held by any Person,
and the date or dates of holding the same, shall be proved by the Security
Register, and the Trustee shall not be affected by notice to the contrary.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by any Bondholder shall bind such Bondholder of every Bond
issued upon the transfer thereof or in exchange therefor or in lieu thereof,
whether or not notation of such action is made upon such Bond.
(e) Until such time as written instruments shall have been delivered with
respect to the requisite percentage of principal amount of Bonds for the action
contemplated by such instruments, any such instrument executed and delivered by
or on behalf of any Bondholder may be revoked with respect to any or all of such
Bonds by written notice by such Bondholder or any subsequent Bondholder, proven
in the manner in which such instrument was proven.
25
(f) Bonds of any series authenticated and delivered after any Act of any
Bondholder may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any action taken by such Act of such Bondholder.
If the Company shall so determine, new Bonds of any series so modified as to
conform, in the opinion of the Company, to such action may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Bonds of such series.
SECTION 1.5 NOTICES, ETC. TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of any Bondholder or other document provided or permitted by this Indenture
to be made upon, given or furnished to, or filed with,
(a) the Trustee by any Bondholder, by the Company or by an Authorized Agent
shall be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with a Responsible Officer of the Trustee at its
Corporate Trust Office, or
(b) the Company by the Trustee, by any Bondholder or by an Authorized Agent
shall be sufficient for every purpose hereunder if in writing and mailed,
first-class postage prepaid, to the Company addressed to it at the address of
its principal office specified in the first paragraph of this instrument or at
any other address previously furnished in writing to the Trustee by the Company
for such purpose.
SECTION 1.6 NOTICES TO BONDHOLDERS; WAIVER.
Where this Indenture provides for notice to the Bondholders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Bondholder, at its address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by any Bondholder shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver. In any case where
notice to the Bondholders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Bondholder
shall affect the sufficiency of such notice with respect to other Bondholders,
and any notice that is mailed in the manner herein provided shall be
conclusively presumed to have been duly given.
SECTION 1.7 EFFECT OF HEADING AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
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SECTION 1.8 SUCCESSORS AND ASSIGNS.
All covenants, agreements, representations and warranties in this Indenture
by the Trustee and the Company shall bind and, to the extent permitted hereby,
shall inure to the benefit of and be enforceable by their respective successors
and assigns, whether so expressed or not.
SECTION 1.9 SEVERABILITY.
In case any provision in this Indenture or in the Bonds shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.10 BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Bonds, expressed or implied, shall give
to any Person, other than the parties hereto and their successors hereunder and
the Bondholders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
SECTION 1.11 GOVERNING LAW.
THIS INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN THE STATE OF NEW YORK EXCEPT THAT SUCH LAWS SHALL NOT APPLY WITH
RESPECT TO (I) ANY COLLATERAL WHERE IT IS NECESSARY TO APPLY THE LAWS OF ANOTHER
JURISDICTION TO PERFECT LIENS RELATING TO DEBT ISSUED HEREUNDER OR (II)
ENFORCEMENT OF REMEDIES UPON COLLATERAL LOCATED IN ANOTHER JURISDICTION OR (III)
ENVIRONMENTAL MATTERS GOVERNED BY THE LAWS OF ANOTHER JURISDICTION.
SECTION 1.12 LEGAL HOLIDAYS.
In any case where the Redemption Date, Prepayment Date or the Stated
Maturity of any Bond or of any installment of principal thereof or payment of
interest thereon, or any date on which any defaulted interest is proposed to be
paid, shall not be a Business Day, then (notwithstanding any other provision of
this Indenture or such Bond) payment of interest and/or principal, and premium,
if any, need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the Redemption Date,
Prepayment Date or at the Stated Maturity, or on the date on which the defaulted
interest is proposed to be paid, and, except as provided in the Series
Supplemental Indenture setting forth the terms of such Bond, if such payment is
timely made, no interest shall accrue for the period from and after such
Redemption Date, Prepayment Date or Stated Maturity, or date for the payment of
defaulted interest, as the case may be, to the date of such payment.
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SECTION 1.13 EXECUTION IN COUNTERPARTS.
This instrument may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
ARTICLE II
THE BONDS
SECTION 2.1 FORM OF BOND TO BE ESTABLISHED BY SERIES SUPPLEMENTAL
INDENTURE.
The Bonds of each series shall be substantially in the form (not
inconsistent with this Indenture, including Section 2.5 hereof) established in
the Series Supplemental Indenture relating to the Bonds of such series.
SECTION 2.2 FORM OF TRUSTEE'S AUTHENTICATION.
The Trustee's certificate of authentication on all Bonds shall be in
substantially the following form:
This Bond is one of the Bonds referred to in the within-mentioned
Indenture.
[______________________________________________]
as Trustee
Dated: __________________ By ____________________________________________
Authorized Signatory
SECTION 2.3 AMOUNT UNLIMITED; ISSUABLE IN SERIES; LIMITATIONS ON ISSUANCE.
The aggregate principal amount of Bonds that may be authenticated and
delivered under this Indenture is unlimited.
The Bonds may be issued in one or more series. There shall be established
in one or more Series Supplemental Indentures, prior to the issuance of Bonds of
any series:
(a) the title of the Bonds of such series (which shall distinguish the
Bonds of such series from all other Bonds) and the form or forms of Bonds of
such series;
(b) any limit upon the aggregate principal amount of the Bonds of such
series that may be authenticated and delivered under this Indenture (except for
Bonds authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Bonds of such series pursuant to Section 2.7,
2.8, 2.9 or 7.6 and except for Bonds that, pursuant to Section 2.4 hereof, are
deemed never to have been authenticated and delivered hereunder);
(c) the date or dates on which the principal of the Bonds of such series is
payable, the amounts of principal payable on such date or dates and the Regular
Record Date for the
28
determination of Bondholders to whom principal is payable; and the date or dates
on or as of which the Bonds of such series shall be dated, if other than as
provided in Section 2.13;
(d) the rate or rates at which the Bonds of such series shall bear
interest, or the method by which such rate or rates shall be determined, the
date or dates from which such interest shall accrue, the interest payment dates
on which such interest shall be payable (which such interest payment dates shall
be the Interest Payment Dates specified herein if such securities are to enjoy
the benefits of the Debt Service Reserve Account) and the Regular Record Date
for the determination of Bondholders to whom interest is payable, and the basis
of computation of interest, if other than as provided in Section 2.13(b);
(e) if other than as provided in Section 10.14(a), the place or places
where (i) the principal of, premium, if any, and interest on Bonds of such
series shall be payable, (ii) Bonds of such series may be surrendered for
registration of transfer or exchange and (iii) notices and demands to or upon
the Company in respect of the Bonds of such series and this Indenture may be
served;
(f) the price or prices at which, the period or periods within which and
the terms and conditions upon which Bonds of such series may be redeemed, in
whole or in part, at the option of the Company;
(g) the obligation, if any, of the Company to redeem, purchase or prepay
Bonds of such series pursuant to any sinking fund or analogous provisions or at
the option of a Bondholder thereof and the price or prices at which, the period
or periods within which and the terms and conditions upon which Bonds of such
series shall be redeemed, purchased or prepaid, in whole or in part, pursuant to
such obligations;
(h) if other than denominations of $100,000 and integral multiples of
$1,000 in excess thereof, the denominations in which Bonds of such series shall
be issuable;
(i) any other terms of such series (which terms shall not be inconsistent
with the provisions of this Indenture); and
(j) any trustees, authenticating or paying agents, warrant agents, transfer
agents or registrars with respect to the Bonds of such series.
SECTION 2.4 AUTHENTICATION AND DELIVERY OF BONDS.
Subject to Section 2.3 and Section 6.17, at any time and from time to time
after the execution and delivery of this Indenture, the Company may deliver
Bonds of any series executed by the Company to the Trustee for authentication,
together with a Company Order for the authentication and delivery of such Bonds,
and the Trustee shall thereupon authenticate and make available for delivery
such Bonds in accordance with such Company Order, without any further action by
the Company. No Bond shall be secured by or entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Bond a certificate of authentication, in the form provided for herein, executed
by the Trustee by the
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manual signature of an Authorized Signatory, and such certificate upon any Bond
shall be conclusive evidence, and the only evidence, that such Bond has been
duly authenticated and delivered hereunder. In authenticating such Bonds and
accepting the additional responsibilities under this Indenture in relation to
such Bonds, the Trustee shall be entitled to receive, and (subject to Section
10.l(a)(ii)) shall be fully protected in relying upon:
(a) an executed Series Supplemental Indenture with respect to the Bonds of
such series;
(b) an Officer's Certificate of the Company certifying (i) as to
resolutions of the Company by or pursuant to which the terms of the Bonds of
such series were established, (ii) that all conditions precedent under this
Indenture to the Trustee's authentication and delivery of such Bonds have been
complied with and (iii) as to the incumbency of the persons named in such
certificate;
(c) an Opinion of Counsel to the effect that (i) the form or forms and the
terms of such Bonds have been established by a Series Supplemental Indenture as
permitted by Sections 2.1 and 2.3 of this Indenture, and (ii) the Bonds of such
series, when authenticated and made available for delivery by the Trustee and
issued by the Company in the manner and subject to any conditions specified in
such Opinion of Counsel, shall constitute legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with their terms,
except as such enforceability (A) may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and other similar
laws affecting the enforcement of creditors' rights and remedies generally and
(B) is subject to general principles of equity (regardless of whether considered
in a proceeding in equity or at law); and
(d) such other documents and evidence with respect to the Company as the
Trustee may reasonably request.
Notwithstanding the foregoing, if any Bond shall have been authenticated
and delivered hereunder but never issued and sold by the Company, and the
Company shall deliver such Bond to the Trustee for cancellation as provided in
Section 2.12 together with a written statement (which need not comply with
Section 1.2 and need not be accompanied by an Opinion of Counsel) stating that
such Bond has never been issued and sold by the Company, for all purposes of
this Indenture such Bond shall be deemed never to have been authenticated and
delivered hereunder and shall never have been or be entitled to the benefits
hereof.
SECTION 2.5 FORM AND DENOMINATIONS.
Except to the extent they are in book-entry form, the Bonds of each series
shall be in registered form and may have such letters, numbers or other marks of
identification and such legends or endorsements printed, lithographed, engraved,
typewritten or photocopied thereon, as may be required to comply with the rules
of any securities exchange (if any) upon which the Bonds are to be listed or to
conform to any usage in respect thereof, or as may, consistently herewith, be
prescribed by the officers executing such Bonds, such determination by such
officers to be evidenced by their signing the Bonds.
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The definitive Bonds shall be printed, lithographed, engraved, typewritten,
photocopied or produced by any combination of these methods or may be produced
in any other manner permitted by the rules of any securities exchange, all as
determined by the officers executing such Bonds, as evidenced by their execution
of such Bonds.
All Bonds of any one series shall be substantially identical except as to
denomination and except as may otherwise be provided herein or in the Series
Supplemental Indenture setting forth the terms of the Bonds of such series.
All Bonds in book-entry form shall comply with the requirements of the
clearing corporation or clearing agency with whom the registered form of such
Bond will be deposited and the Series Supplemental Indenture relating to such
Bonds shall set forth such requirements.
SECTION 2.6 EXECUTION OF BONDS.
The Bonds shall be executed on behalf of the Company by the Chief Executive
Officer, President, Chief Financial Officer, one of the Vice Presidents or the
Corporate Secretaries of the managing Member of the Company, with or without its
corporate seal reproduced thereon. The signature of any such officers on the
Bonds may be manual or facsimile.
Bonds bearing the manual or facsimile signatures of individuals who were at
the time such signatures were affixed the proper officers of the Company shall
bind the Company notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Bonds or did not hold such offices at the date of such Bonds.
SECTION 2.7 TEMPORARY BONDS.
Pending the preparation of definitive Bonds of any series, the Company may
execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Bonds of such series that are printed,
lithographed, typewritten, photocopied or otherwise produced, in any
denomination, substantially of the tenor of the definitive Bonds in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Bonds may
determine, as evidenced by their execution of such Bonds.
If temporary Bonds of any series are issued, the Company shall cause
definitive Bonds of such series to be prepared without unreasonable delay. After
the preparation of definitive Bonds of such series, the temporary Bonds of such
series shall be exchangeable for definitive Bonds of such series upon surrender
of the temporary Bonds of such series at the Corporate Trust Office of the
Trustee or at the Place of Payment, without charge to the Bondholder. Upon
surrender for cancellation of any one or more temporary Bonds of any series, the
Company shall execute and the Trustee shall authenticate and make available for
delivery, in exchange therefor, definitive Bonds of such series of authorized
denominations and of like tenor and aggregate principal amount. Until so
exchanged, such temporary Bonds of any series shall in all respects be entitled
to the same benefits under this Indenture as definitive Bonds of such series.
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SECTION 2.8 REGISTRATION, TRANSFER AND EXCHANGE.
The Trustee shall cause to be kept at the Corporate Trust Office a register
in which, subject to such reasonable regulations as the Company may prescribe,
the Company shall provide for the registration of Bonds and for the registration
of transfers and exchanges of Bonds. This register and, if there shall be more
than one Security Registrar, the combined registers maintained by all such
Security Registrars, are herein sometimes referred to as the "SECURITY
REGISTER."
Upon surrender for registration of transfer of any Bond of any series at
the Corporate Trust Office, or at any office or agency maintained for such
purpose pursuant to Section 10.14(a), the Company shall execute, and the Trustee
shall authenticate and make available for delivery, in the name of the
designated transferee or transferees, one or more new Bonds of the same series,
of authorized denominations and of like tenor and aggregate principal amount.
At the option of the Bondholders, Bonds of any series may be exchanged for
other Bonds of the same series, of authorized denominations and of like tenor
and aggregate principal amount, upon surrender of the Bonds to be exchanged at
any office or agency maintained for such purpose pursuant to Section 10.14(a).
Whenever any Bonds are so surrendered for exchange, the Company shall execute,
and the Trustee or a duly authorized authenticating agent shall authenticate and
make available for delivery, the Bonds which the Bondholder making the exchange
is entitled to receive.
All Bonds issued upon any registration of transfer or exchange of Bonds
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same security and benefits under this Indenture, as the Bonds
surrendered upon such registration of transfer or exchange.
Every Bond presented or surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar or any
transfer agent, duly executed by the Bondholder or his attorney duly authorized
in writing.
No service charge shall be required of any Bondholders participating in any
transfer or exchange of Bonds in respect of such transfer or exchange, but the
Security Registrar may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any transfer or
exchange of Bonds, other than exchanges pursuant to Section 2.7, 7.6 or 12.6 not
involving any transfer.
The Security Registrar shall not be required (i) to issue, register the
transfer of or exchange any Bond of any series during a period (a) beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of Bonds of such series selected for redemption under Section 7.2 or
8.2 and ending at the close of business on the day of such mailing and (b)
beginning on the Regular Record Date for the Stated Maturity of any installment
of principal of or payment of interest on the Bonds of such series and ending on
the Stated Maturity of such installment of principal or payment of interest, or
(ii) to issue, register the
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transfer of or exchange any Bond so selected for redemption in whole or in part,
except the unredeemed portion of any Bond selected for redemption in part.
SECTION 2.9 MUTILATED, DESTROYED, LOST AND STOLEN BONDS.
If (i) any mutilated Bond is surrendered to the Trustee or the Company, and
the Security Registrar or the Trustee receives evidence to its satisfaction of
the destruction, loss or theft of any Bond, and (ii) there is delivered to the
Company, the Security Registrar and the Trustee evidence to their satisfaction
of the ownership and authenticity thereof, and such security or indemnity as may
be required by them to save each of them harmless, the Company shall execute and
upon its request the Trustee shall authenticate and make available for delivery,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Bond, a new Bond of the same series and of like tenor and principal amount,
bearing a number not then Outstanding.
Notwithstanding the foregoing, in case any such mutilated, destroyed, lost
or stolen Bond has become or is about to become due and payable, the Company,
upon satisfaction of the conditions set forth in clauses (i) and (ii) of the
immediately preceding paragraph may, instead of issuing a new Bond, pay such
Bond.
Upon the issuance of any new Bond under this Section 2.9, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith.
Every new Bond issued pursuant to this Section 2.9 in lieu of any
destroyed, lost or stolen Bond shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Bond shall be at any time enforceable by anyone, and shall be entitled to
all the security and benefits of this Indenture equally and proportionately with
any and all other Bonds duly issued hereunder.
The provisions of this Section 2.9 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Bonds.
SECTION 2.10 PAYMENT OF PRINCIPAL AND INTEREST, PRINCIPAL AND INTEREST
RIGHTS PRESERVED.
Principal or interest on any Bond that is payable, and is punctually paid
or duly provided for, at any Stated Maturity shall be paid to the Person in
whose name that Bond (or one or more Predecessor Bonds) is registered at the
close of business on the Regular Record Date for such principal or interest.
Payment of principal of and interest on the Bonds of any series shall be made at
the Corporate Trust Office of the Trustee or by check or in another manner or
manners if so provided in the Series Supplemental Indenture creating the Bonds
of such series.
Any principal of or interest on any Bond of any series that is payable, but
is not punctually paid or duly provided for, at any Stated Maturity of an
installment of principal or payment of interest shall forthwith cease to be
payable to the Bondholder on the relevant Regular
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Record Date by virtue of having been such Bondholder to the extent that such
defaulted principal or interest may be paid by the Company, at its election in
each case, as provided in paragraph (a) or paragraph (b) below:
(a) The Company may elect to make payment of all or any portion of such
defaulted principal or interest to the Persons in whose names the Bonds of such
series (or their respective Predecessor Bonds) in respect of which principal or
interest is in default are registered at the close of business on a Special
Record Date for the payment of such defaulted principal or interest, which shall
be fixed in the following manner. The Company shall notify the Trustee and the
Paying Agent in writing of the amount of defaulted principal or interest
proposed to be paid on each Bond of such series and the date of the proposed
payment, and concurrently there shall be deposited with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
defaulted principal or interest or there shall be made arrangements satisfactory
to the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons entitled
to such defaulted principal or interest as provided in this paragraph. Thereupon
the Trustee shall fix a Special Record Date for the payment of such defaulted
principal or interest (together with other amounts payable with respect to such
defaulted principal or interest) which shall not be more than 15 nor less than
10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company and the Security Registrar of such
Special Record Date and shall direct the Security Registrar to immediately
provide notice of the proposed payment of such defaulted principal or interest
and the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Bondholder of a Bond of such series at his address as it appears in the
Security Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such defaulted principal or interest and the
Special Record Date therefor having been mailed as aforesaid, such defaulted
principal or interest shall be paid to the Persons in whose names the Bonds of
such series (or their respective Predecessor Bonds) are registered on such
Special Record Date and shall no longer be payable pursuant to the following
paragraph (b).
(b) The Company may make, or cause to be made, payment of any defaulted
principal or interest (together with other amounts payable with respect to such
defaulted interest) in any other lawful manner not inconsistent with the
requirements of any securities exchange (if any) on which the Bonds in respect
of which principal or interest is in default may be listed, and upon such notice
as may be required by such exchange, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this paragraph, such payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 2.10, each Bond
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Bond shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Bond, and each such Bond
shall bear interest from whatever date shall be necessary so that neither gain
nor loss in interest shall result from such registration of transfer, exchange
or replacement.
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SECTION 2.11 PERSONS DEEMED OWNERS.
Subject to Section 2.10, the Person in whose name any Bond is registered
shall be deemed to be the owner of such Bond for the purpose of receiving
payment of principal of, and premium, if any, and interest on, such Bond and for
all other purposes whatsoever, whether or not such Bond be overdue, regardless
of any notice to anyone to the contrary.
SECTION 2.12 CANCELLATION.
All Bonds surrendered for payment, redemption or registration of transfer
or exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee for cancellation. The Company may at any time deliver
to the Trustee for cancellation any Bonds previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Bonds so delivered shall be promptly canceled by the Trustee. No Bonds shall be
authenticated in lieu of or in exchange for any Bonds canceled as provided in
this Section, except as expressly permitted by this Indenture. The Trustee shall
return all canceled Bonds to the Company unless, by Company Request, the Company
otherwise directs.
SECTION 2.13 DATING OF BONDS, COMPUTATION OF INTEREST.
(a) Except as otherwise provided in the Series Supplemental Indenture
relating to the Bonds of a series, each Bond of such series shall be dated the
date of its authentication.
(b) Except as otherwise provided in the Series Supplemental Indenture
relating to the Bonds of a series, interest on the Bonds of such series shall be
computed on the basis of a 360-day year consisting of twelve 30-day months and,
for any period shorter than a full month, on the basis of the actual number of
days elapsed.
SECTION 2.14 SOURCE OF PAYMENTS LIMITED; RIGHTS AND LIABILITIES OF THE
COMPANY.
Except as otherwise specifically provided in this Indenture, all payments
of principal and premium, if any, and interest to be made in respect of the
Bonds and this Indenture shall be made only from the payments from the Project
Accounts and the Collateral and the income and proceeds thereof received by the
Trustee. Each Bondholder, by its acceptance of a Bond, agrees that recourse
shall be limited in accordance with Section 15.1.
SECTION 2.15 PARITY OF BONDS.
All Bonds of a series issued and Outstanding hereunder rank on a parity
with each other Bond of the same series and with all Bonds of each other series
and each Bond of a series shall be secured equally and ratably by this Indenture
and the Security Documents with each other Bond of the same series and with all
Bonds of each other series, without preference, priority or distinction of any
one thereof over any other by reason of difference in time of issuance or
otherwise, and each Bond of a series shall be entitled to the same benefits and
security in this
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Indenture and the Security Documents as each other Bond of the same series and
with all Bonds of each other series.
SECTION 2.16 ALLOCATION OF PRINCIPAL AND INTEREST.
Each payment of principal of and premium, if any, and interest on each Bond
shall be applied, FIRST, to the payment of accrued but unpaid interest on such
Bond (as well as any interest on overdue principal or, to the extent permitted
by applicable Applicable Law, overdue interest) to the date of such payment,
SECOND, to the payment of the principal amount of and premium, if any, on such
Bond then due (including any overdue installment of principal) thereunder, and
THIRD, the balance, if any, to the payment of the principal amount of such Bond
remaining unpaid.
SECTION 2.17 MONIES UNCLAIMED.
Any monies paid by the Company to the Trustee for any payments with respect
to the Bonds that remain unclaimed for two years will be repaid to the Company
upon its written request, and thereafter the Bondholder will look only to the
Company for payments thereof as an unsecured creditor, and the Company shall not
be liable to pay any taxes or other duties in connection with such payment;
PROVIDED, HOWEVER, that unless otherwise provided by Applicable Law, the right
to receive payment of principal and interest on any Bond (whether at maturity,
redemption or otherwise) will become void at the end of five (5) years from the
date on which the right to receive payment arose (or such shorter period as may
be prescribed by Applicable Law).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Trustee as follows:
SECTION 3.1 ORGANIZATION, POWER AND STATUS OF THE COMPANY.
The Company is (i) a limited liability company duly formed, validly
existing and in good standing under the laws of the State of Delaware and (ii)
duly authorized to do business in each jurisdiction where the nature of its
activities makes such qualification necessary. The Company has not engaged in
any business or activity other than in connection with the development,
acquisition, construction, ownership, operation and financing of the Project as
contemplated by the Transaction Documents to which the Company is a party. The
Company has all requisite corporate power and authority to own and operate the
property it purports to own and to carry on its business as now being conducted
and as proposed to be conducted in respect of the Project.
SECTION 3.2 AUTHORIZATION, ENFORCEABILITY, EXECUTION AND DELIVERY.
(a) The Company has all necessary power and authority to execute, deliver
and perform its obligations under the Transaction Documents executed on or prior
to the date of original issuance of the Bonds hereunder and to which it is a
party.
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(b) All action on the part of the Company that is required for the
authorization, execution, delivery and performance of the Transaction Documents
to which the Company is a party, in each case has been duly and effectively
taken; and the execution, delivery and performance of the Transaction Documents
does not require the approval or consent of any holder or trustee of any Debt or
other obligations of the Company or of any contractual counterparty, which has
not been obtained.
(c) Each Transaction Document to which the Company is a party has been duly
executed and delivered by the Company and constitutes a legal, valid and binding
obligation of the Company enforceable against it in accordance with the terms
thereof, except as such enforceability (i) may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and
similar laws affecting the enforcement of creditors' rights and remedies
generally and (ii) is subject to general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law).
SECTION 3.3 NO CONFLICTS; APPLICABLE LAWS AND CONTRACTS; NO DEFAULT.
(a) Neither the execution, delivery and performance of this Indenture and
each other Transaction Document to which the Company is a party nor the
consummation of any of the transactions contemplated hereby or thereby nor
performance of or compliance with the terms and conditions hereof or thereof (i)
contravenes any Applicable Law or Governmental Approval or order, writ or
injunction of any court or other Governmental Authority applicable to the
Company or any of the Collateral, (ii) constitutes a default under or results in
the violation of the Company's certificate of formation or operating agreement
or any other material contract to which the Company is a party or by which it or
any of its assets is bound, or (iii) results in the creation or imposition of
any Liens (other than Permitted Liens) on any of the Collateral, or results in
the acceleration of any obligation, hereunder or under the Transaction
Documents.
(b) The Company and the Facility are in compliance with and not in default
under any and all Governmental Approvals applicable to the Company or the
Facility and all terms and provisions of all Transaction Documents to which the
Company is a party, unless such noncompliance or such default could not
reasonably be expected to result in a Material Adverse Effect.
(c) The Company has not given or received any notice of default under any
executed Transaction Document, and each executed Transaction Document, to the
best of the Company's knowledge, is in full force and effect. The Company is not
in default under any executed Transaction Document where such Default could
reasonably be expected to have a Material Adverse Effect.
SECTION 3.4 GOVERNMENTAL APPROVALS.
All Governmental Approvals which are required to be obtained as of the
Closing Date in the name of the Company in connection with (i) the construction,
operation and maintenance of the Facility and (ii) the execution of the Bonds
and the execution, delivery and performance by the Company of the Transaction
Documents have been duly obtained or made, were validly
37
issued and are in full force and effect. All such Governmental Approvals are set
forth in Part I of Schedule 3.4. The Company is in compliance with all
Government Approvals required to be obtained as of the Closing Date unless such
noncompliance could not reasonably be expected to result in a Material Adverse
Effect. The Company does not have any reason to believe that it will be unable
to obtain the required Governmental Approvals that are not required to be
obtained prior to the Closing Date, which Governmental Approvals are set forth
in Part II of Schedule 3.4, in the ordinary course of business and at such time
or times and containing such terms as may be necessary to avoid any substantial
delay in, or material impairment to, the consummation and performance of the
transactions as contemplated by the Transaction Documents.
SECTION 3.5 LITIGATION.
There are no actions, suits or proceedings at law or in equity by or before
any Governmental Authority now pending or to the best of the Company's
knowledge, threatened against the Company, any property or other assets or
rights of the Company with respect to this Indenture, any other Transactions
Documents or the Project that, if determined adversely to the Company, could
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.6 COLLATERAL.
The Company has, or has valid and enforceable rights to acquire, (i) good
title or valid leasehold rights to the interests in the Site, any other real
property or fixtures and (ii) good title or valid leasehold rights to the
tangible personal property, in each case, forming a part of the Collateral
purported to be covered by the Security Documents subject only to Permitted
Liens.
SECTION 3.7 TAXES.
The Company has filed, or caused to be filed, all tax and information
returns that are required to have been filed by it in any jurisdiction, and has
paid all taxes shown to be due and payable on such returns and all other taxes
and assessments payable thereunder, to the extent the same have become due and
payable, except to the extent there is a Good Faith Contest thereof by the
Company.
SECTION 3.8 ENVIRONMENTAL MATTERS.
The Company and the Site are in compliance with all applicable
Environmental Laws affecting the Site or the Facility, the noncompliance with
which could reasonably be expected to result in a Material Adverse Effect, and,
to the Company's knowledge, there are no environmental conditions which could
reasonably be expected to materially interfere with the construction or
commercial operation of the Facility or adversely affect the Lien of the
Collateral Agent thereon.
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SECTION 3.9 COMPLIANCE WITH APPLICABLE LAW.
The Company and its officers, directors, employees, agents and all
Affiliates acting on their behalf, are in compliance in all material respects
with all Applicable Law, in respect of the conduct of the Company's business and
the ownership of its property.
SECTION 3.10 SECURITY DOCUMENTS.
The provisions of the Security Documents are effective to create, in favor
of the Trustee and the Collateral Agent, as the case may be, a legal, valid and
enforceable Lien on all of the property, assets and revenues described therein
to the extent a security interest may be created therein under Applicable Law
and all necessary and appropriate recordings, registrations and filings have
been made in all appropriate public offices, and all other necessary and
appropriate action has been taken so that each such Security Document creates an
effective Lien with respect to the property, assets and revenues covered thereby
to the extent a security interest may be created therein under Applicable Law,
prior and superior to all other Liens except for Permitted Liens, and all
necessary and appropriate Governmental Approvals and consents to the creation,
effectiveness, priority and enforcement of such Liens have been obtained from
each of the parties to the Transaction Documents and the relevant Governmental
Authorities.
SECTION 3.11 UTILITY REGULATION; EWG STATUS.
(a) The Facility, as proposed to be owned and operated, will satisfy the
requirements for an exempt wholesale generator upon the initial delivery of
energy by the Facility. Accordingly, neither the Company, AES Red Oak, AES URC
nor the Trustee shall, solely by reason of (i) the ownership, construction,
operation and maintenance of the Facility by the Company, (ii) the issuance of
the Bonds, or (iii) any other transaction contemplated by the Transaction
Documents, be deemed by any Governmental Authority having jurisdiction to be
subject to financial, organizational or rate regulation as an "electric
utility", "electric corporation", "electrical company", "public utility",
"public utility holding company" or any similar entity under any existing
Applicable Law.
(b) The Company is an "exempt wholesale generator" under Section 32(a) of
PUHCA.
SECTION 3.12 INVESTMENT COMPANY ACT.
Upon issuance of the Bonds, the Company will not be subject to regulation
as an "investment company" under the Investment Company Act of 1940.
SECTION 3.13 ERISA AND EMPLOYEES.
The Company does not sponsor, maintain, administer, contribute to,
participate in, or have any obligation to contribute to or any liability under,
any employee benefit plan within the meaning of Section 3(3) of ERISA nor since
the date which is six (6) years immediately preceding the Closing Date has the
Company established, sponsored, maintained, administered,
39
contributed to, participated in, or had any obligation to contribute to or
liability under, any such plan.
SECTION 3.14 SUBSIDIARIES.
The Company has no subsidiaries other than AES URC.
SECTION 3.15 CERTIFICATES.
Any statements made by the Company in any certificates delivered by the
Company under any of the Financing Documents shall constitute a representation
and warranty by the Company made as of the date such certificate is delivered.
ARTICLE IV
ACCOUNTS
SECTION 4.1 ESTABLISHMENT OF ACCOUNTS.
(a) The Trustee hereby confirms that it has established with the Depositary
Bank at its office at the address listed in the preamble to this Indenture the
following special, segregated accounts (the "INDENTURE ACCOUNTS"):
(i) Bond Proceeds Account;
(ii) Bond Payment Account; and
(iii) Construction Interest Account.
(b) The Trustee hereby confirms that it has established with the Depositary
Bank at its office at the address set forth in the preamble to this Indenture
the following subaccounts to the Bond Payment Account:
(i) Interest Payment Subaccount;
(ii) Principal Payment Subaccount; and
(iii) Redemption Subaccount.
All amounts from time to time held in each Indenture Account shall be held
(x) in the name of the Trustee subject to the lien and security interest granted
under this Indenture or certain of them as set forth herein and (y) in the
custody of the Depositary Bank for and on behalf of the Trustee for the purposes
and on the terms set forth in this Indenture.
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SECTION 4.2 INVESTMENT OF FUNDS IN THE INDENTURE ACCOUNTS.
(a) Amounts deposited in the Indenture Accounts (and each subaccount
thereof) and each other account or fund created hereunder (unless expressly
stated otherwise), at the written request and direction of the Company, shall be
invested by the Trustee in Permitted Investments upon specific written
instructions from an Authorized Representative of the Company, which
instructions may be sent by facsimile transmission. The Company shall ensure
that such investments shall mature in such amounts and not later than such times
as may be necessary to provide funds when needed to make payments from such
funds as provided in this Indenture. Net interest or gain received from such
investments shall be applied as provided in this Indenture.
(b) So long as an outstanding balance shall remain in the Indenture
Accounts or any other account or fund created hereunder, the Trustee shall
provide the Company with statements by the tenth (10th) Business Day of each
month showing the amount of all receipts, the net investment income or gain
received and collected, all disbursements and the amount then available as of
the last Business Day of the prior calendar month in the Indenture Accounts (and
each subaccount thereof) and each other account or fund created hereunder. The
Depositary Bank agrees to provide the Trustee with such information as it may
reasonably have available to it in order to permit the Trustee to provide such
statements in accordance with the requirements of this Indenture.
SECTION 4.3 VALUATION AND SALE OF INVESTMENTS.
(a) Obligations purchased as an investment of funds in any Indenture
Account or any other separate account or fund created under the provisions of
this Indenture shall be deemed at all times to be a part of such account or fund
and, unless otherwise specified herein, any profit realized from the liquidation
of such investment shall be credited to such Indenture Account or such other
separate account or fund created hereunder, and any loss resulting from the
liquidation of such investment shall be charged to the respective Indenture
Account or such other separate account or fund.
(b) The Trustee shall determine the value of all investments in any of the
Indenture Accounts as of the last Business Day of each month, with any deficit
in any account balance to be funded from Project Revenues in accordance with
this Section 4.3, and any investments valued in excess of the amounts required
to be on deposit in an account shall be liquidated and the amount of such excess
shall be deposited in the Bond Payment Account for application in accordance
with Section 5.2.
(c) In computing the amount of any funds in any Indenture Account, or other
separate account or fund created under the provisions of this Indenture for any
purpose provided in this Indenture, obligations purchased as an investment of
funds therein shall be valued at the market value of such obligations, exclusive
of accrued interest; PROVIDED, HOWEVER, if there is no readily determinable
market value for such obligations, the value of such obligations shall be
determined with reference to the acquisition price of such obligations, plus
accrued but unpaid interest.
41
(d) The Depositary Bank agrees to provide the Trustee with such information
as it may reasonably have available to it in order to permit the Trustee to make
such determinations and transfers as may be required by this Section 4.3.
SECTION 4.4 POSSESSION OF ACCOUNTS; LIQUIDATION.
(a) Each of the Indenture Accounts shall at all times be in the exclusive
possession of the Depositary Bank acting for and on behalf of the Trustee.
(b) If an Event of Default shall have occurred and be continuing, the
Trustee shall to the extent permitted by law promptly liquidate all amounts in
the Indenture Accounts and all related investments and distribute all such
monies so received in accordance with Section 9.11.
SECTION 4.5 THE DEPOSITARY BANK; LIMITED COMPANY RIGHTS.
(a) THE DEPOSITARY BANK.
(i) ESTABLISHMENT OF SECURITIES ACCOUNTS. The Depositary Bank hereby
agrees and confirms that (A) the Depositary Bank has established the
Indenture Accounts as set forth in Section 4.1, (B) each Indenture Account
is and will be maintained as a "securities account" (within the meaning of
Section 8-501 of the UCC), (C) the Trustee is the "entitlement holder"
(within the meaning of Section 8-102(a)(7) of the UCC) in respect of the
"financial assets" (within the meaning of Section 8-102(a)(9) of the UCC)
credited to the Indenture Accounts, (D) all property delivered to the
Depositary Bank pursuant to the Transaction Documents or this Agreement
will be held by the Depositary Bank and promptly credited to an Indenture
Account by an appropriate entry in its records in accordance with this
Agreement, (E) all "financial assets" (within the meaning of Section
8-102(a)(9) of the UCC) in registered form or payable to or to the order of
and credited to any Indenture Account shall be registered in the name of,
payable to or to the order of, or endorsed to, the Trustee or in blank, or
credited to another securities account maintained in the name of the
Trustee, and in no case will any financial asset credited to any Indenture
Account be registered in the name of, payable to or to the order of, or
endorsed to, the Company except to the extent the foregoing have been
subsequently endorsed by the Company to the Depositary Bank or in blank and
(F) the Depositary Bank shall not change the name or account number of any
Indenture Account without the prior written consent of the Trustee.
(ii) FINANCIAL ASSETS ELECTION. The Depositary Bank agrees that each
item of property (excluding cash, but including any security, instrument or
obligation, share, participation, interest or other property whatsoever)
credited to any Indenture Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the UCC.
(iii) ENTITLEMENT ORDERS. If at any time the Depositary Bank shall
receive any "entitlement order" (within the meaning of Section 8-102(a)(8)
of the UCC) or any other order from the Trustee acting in accordance with
this Agreement directing the transfer or
42
redemption of any financial asset relating to the Indenture Accounts, the
Depositary Bank shall comply with such entitlement order or other order
without further consent by the Company or any other Person. The parties
hereto hereby agree that the Trustee shall have "control" (within the
meaning of Section 8-106(d) of the UCC) of the Trustee's "security
entitlement" (within the meaning of Section 8-102(a)(17) of the UCC) with
respect to the financial assets credited to the Indenture Accounts and the
Depositary Bank hereby disclaims any entitlement to claim "control" of such
"security entitlement".
(iv) SUBORDINATION OF LIEN; WAIVER OF SET-OFF. If the Depositary Bank
has or subsequently obtains by agreement, operation of law or otherwise a
lien or security interest in any Indenture Account or any security
entitlement credited thereto, the Depositary Bank agrees that such lien or
security interest shall be subordinate to the lien and security interest of
the Trustee. The financial assets standing to the credit of the Indenture
Accounts will not be subject to deduction, set-off, banker's lien, or any
other right in favor of any Person other than the Trustee in its capacity
as such (except that the face amount of any checks which have been credited
to any Indenture Account but are subsequently returned unpaid because of
uncollected or insufficient funds).
(v) NO OTHER AGREEMENTS. The Depositary Bank and the Company have not
entered into any agreement with respect to the Indenture Accounts or any
financial assets credited to any Indenture Account other than this
Agreement and the other Security Documents. The Depositary Bank has not
entered into any agreement with the Company or any other Person purporting
to limit or condition the obligation of the Depositary Bank to comply with
entitlement orders originated by the Trustee in accordance with this
Section 4.5. In the event of any conflict between this Section 4.5 or any
other Security Document or any other agreement now existing or hereafter
entered into, the terms of this Section 4.5 shall prevail.
(vi) NOTICE OF ADVERSE CLAIMS. Except for the claims and interest of
the Trustee and the Company in each of the Indenture Accounts, the
Depositary Bank does not know of any claim to, or interest in, any
Indenture Account or in any financial asset credited thereto. If any Person
asserts any lien, encumbrance or adverse claim (including any writ,
garnishment, judgment, warrant of attachment, execution or similar process)
against any Indenture Account or in any financial asset credited thereto,
the Depositary Bank will promptly notify the Trustee and the Company
thereof.
(vii) RIGHTS AND POWERS OF THE DEPOSITARY BANK. The rights and powers
granted by the Trustee to the Depositary Bank have been granted in order to
perfect its lien and security interests in the Indenture Accounts, are
powers coupled with an interest and will neither be affected by the
bankruptcy of the Trustee nor the lapse of time.
(viii) CHOICE OF APPLICABLE LAW. Both this Agreement and each
Indenture Account (including all security entitlements relating thereto)
shall be governed by the law of the State of New York. Regardless of any
provision in any other agreement, for
43
purposes of the UCC, the "securities intermediary's jurisdiction" of the
Depositary Bank with respect to the Indenture Accounts is the State of New
York.
(b) LIMITED COMPANY RIGHTS. The Company shall not have any rights against
or to monies held in the Indenture Accounts, as third-party beneficiary or
otherwise or any right to direct the Depositary Bank or the Trustee to apply or
transfer monies in any Indenture Account, except the right to direct the
investment of monies held in the Indenture Accounts as permitted by Section 4.2
of this Agreement. Except as expressly provided in this Agreement, in no event
shall any amounts or Permitted Investments deposited in or credited to any
Indenture Account be registered in the name of the Company, payable to the order
of the Company or specially endorsed to the Company, except to the extent that
the foregoing have been specially endorsed to the Trustee or in blank.
ARTICLE V
COLLECTION AND APPLICATION OF FUNDS IN THE INDENTURE ACCOUNTS
SECTION 5.1 BOND PROCEEDS ACCOUNT.
The Trustee shall deposit the net proceeds of the issuance of the Bonds
into the Bond Proceeds Account prior to transferring such proceeds to the
Construction Interest Account in amounts specified by the Company on the Closing
Date. Such transfer shall be accomplished pursuant to written instruction
substantially in the form of Exhibit 5.1. After giving effect to such transfer,
on the Closing Date the Trustee shall transfer all amounts remaining in the Bond
Proceeds Account to the Collateral Agent for deposit in the Construction
Account.
SECTION 5.2 BOND PAYMENT ACCOUNT.
The Trustee shall deposit (i) all funds received by it for the payment of
interest on the Bonds into the Interest Payment Subaccount of the Bond Payment
Account for disbursement in accordance with Section 5.3(a) and (ii) all funds
received by it for the payment of principal on the Bonds (including any funds
transferred from the Redemption Subaccount pursuant to Section 5.3(c)) into the
Principal Payment Subaccount of the Bond Payment Account for disbursement in
accordance with Section 5.3(b).
SECTION 5.3 INTEREST PAYMENT SUBACCOUNT, PRINCIPAL PAYMENT SUBACCOUNT AND
REDEMPTION SUBACCOUNT.
(a) The Trustee is hereby authorized and directed to disburse from the
Interest Payment Subaccount, the amount required to pay interest on the Bonds
when due (whether on an Interest Payment Date or upon call for redemption or by
acceleration or otherwise).
(b) The Trustee is hereby authorized and directed to disburse from the
Principal Payment Subaccount, the amount required to pay principal on the Bonds
when due (whether on a Principal Payment Date or upon call for redemption or by
acceleration or otherwise).
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(c) The Trustee is hereby authorized and directed to disburse funds from
the Redemption Subaccount (when amounts on deposit therein equal or exceed
$5,000,000) for the redemption of Bonds in accordance with Section 7.3. The
foregoing notwithstanding, the Trustee shall transfer funds remaining in the
Redemption Subaccount for more than one (1) year and not applied to the
redemption of Bonds pursuant to this Section and Section 7.3 to the Principal
Payment Subaccount for application by the Trustee in accordance with Section
5.3(b).
SECTION 5.4 CONSTRUCTION INTEREST ACCOUNT.
(a) The Trustee shall deposit all funds received by it for the payment of
interest on the Bonds from and including the Closing Date to and through the
Commercial Operation Date into the Construction Interest Account.
(b) The Trustee is hereby authorized and directed to disburse from the
Construction Interest Account the amount required to pay interest on the Bonds
when due (whether on an Interest Payment Date or upon call for redemption or by
acceleration or otherwise).
(c) On the Commercial Operation Date and upon the Company's delivery to the
Collateral Agent and the Trustee of the Commercial Operation Certificate
specified in Section 3.9 of the Collateral Agency Agreement, the Trustee shall
transfer all monies remaining in the Construction Interest Account to the Bond
Payment Account for deposit in the Interest Payment Subaccount.
(d) If on any date prior to an Interest Payment Date there are insufficient
funds to pay interest due on such Interest Payment Date, the Trustee shall give
written notice to the Collateral Agent to such effect and requesting the
transfer of funds in an amount sufficient to pay such interest coming due.
ARTICLE VI
COVENANTS
SECTION 6.1 PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST.
The Company shall duly and punctually pay, or cause to be paid, the
principal of, premium, if any, and interest on, and all other amounts payable in
respect of, the Bonds of each series in accordance with their terms and the
terms of this Indenture and of the related Series Supplemental Indenture.
SECTION 6.2 INSURANCE.
(a) The Company shall maintain or cause to be maintained insurance
coverages meeting the requirements of Schedule 6.2. If at any time any of the
required insurance shall no longer be available on commercially reasonable terms
(as confirmed by the Independent Insurance Advisor), the Company shall procure
substitute insurance coverage reasonably
45
satisfactory to the Independent Insurance Advisor that is the most equivalent to
the required coverage and that is available on commercially reasonable terms.
(b) The Company shall obtain title insurance in an amount equal to the
principal amount of the Senior Debt.
(c) Within 30 days after any officer of the Company obtains knowledge of
any occurrence which has or might reasonably be expected to result in any:
(i) premium increase in excess of 10% over the applicable cost for any such
insurance coverages; or (ii) any cancellation, reduction, non-renewal or
material alteration of any such required insurance a report describing such
occurrences and the potential insurance-related impact thereof.
SECTION 6.3 REPORTING REQUIREMENTS.
The Company shall furnish to the Senior Parties:
(a) unless the Company is then filing comparable reports pursuant to the
reporting requirements of the Exchange Act, as soon as practicable and in any
event within 60 days after the end of the first, second and third quarterly
accounting periods of each fiscal year of the Company (commencing with the
quarter ending June 30, 2000), an unaudited balance sheet of the Company as of
the last day of such quarterly period and the related statements of income and
cash flows, and reports of all dividends and other distributions paid to owners
during such quarterly period prepared in accordance with GAAP and (in the case
of second and third quarterly periods) for the portion of the fiscal year ending
with the last day of such quarterly period, setting forth in each case in
comparative form corresponding unaudited figures from the preceding fiscal year
and accompanied by a written statement of an Authorized Representative of the
Company to the effect that such financial statements fairly represent the
Company's financial condition and results of operations at and as of their
respective dates;
(b) unless the Company is then filing comparable reports pursuant to the
reporting requirements of the Exchange Act, as soon as practicable and in any
event within one hundred-twenty (120) days after the end of each fiscal year of
the Company (commencing with the fiscal year ended December 31, 2000), a balance
sheet of the Company as of the end of such year and the related statements of
income and cash flow during such year setting forth in each case in comparative
form corresponding figures from the preceding fiscal year, accompanied by an
audit report thereon of a firm of independent public accountants of recognized
national standing;
(c) at the time of the delivery of the financial statements provided for in
clause (a) and (b) above, or at the time of the filing of the comparable report
pursuant to the Exchange Act, an Officer's Certificate to the effect that, to
the best of such officer's knowledge, (i) the Company is in compliance with all
of its material obligations under the terms of the Transaction Documents the
non-performance of which has resulted or could reasonably be expected to result
in a Material Adverse Effect and (ii) to the best of such officer's knowledge,
no Default or Event of Default has occurred and is continuing or, if any Default
or Event of Default has occurred and is continuing, specifying the nature and
extent thereof and what action the Company is taking or proposes to take in
response thereto;
46
(d) each of the following items (which will continue to be delivered after
registration of the bonds under the Exchange Act):
(i) promptly after the Company obtains actual knowledge of the
occurrence thereof, written notice of the occurrence of any event or
condition which constitutes an Event of Default and an Officer's
Certificate of the Company specifically stating that such Event of Default
has occurred and setting forth the details thereof and the action which the
Company is taking or proposes to take with respect thereto;
(ii) promptly after the Company obtains actual knowledge of any
proceeding, legislation or proposal by any Governmental Authority to
acquire compulsorily the Company, all or any portion of the Collateral or a
material part of the Company's business or assets or the occurrence
thereof, written notice of the occurrence of any Event of Eminent Domain or
any event that has caused or could cause the Company to incur a casualty or
loss exceeding $100,000 or any Event of Loss and an Officer's Certificate
of the Company setting forth the details thereof and the action which the
Company is taking or proposes to take with respect thereto;
(iii) until the occurrence of the Commercial Operation Date, within
forty-five (45) days after the end of each fiscal quarter of the Company
(commencing with its quarter ending June 30, 2000), a quarterly
construction report describing the progress of the Facility's construction
and expenditure of funds, including any material problems encountered
during the engineering, procurement and construction; PROVIDED, THAT, if
any events, conditions or circumstances occur or exist which affect the
matters covered in the construction report, which has had or would
reasonably be expected to have a Material Adverse Effect, and until the
effects of any such events, conditions or circumstances are cured, the
Company shall, if requested to do so by any Senior Party, deliver prompt
information with respect to such events, conditions or circumstances on a
monthly basis;
(iv) any litigation, arbitration or governmental proceeding pending or
threatened against the Company or any substantial dispute with any
Governmental Authority or any party to any Transaction Document (x)
involving a claim or claims in excess of $250,000 individually or
$1,000,000 in the aggregate or (y) which could reasonably be expected to
have a Material Adverse Effect;
(v) any material notice or correspondence received or initiated by the
Company, other than notices or correspondence received or initiated in the
ordinary course of business, relating to a Transaction Document,
Governmental Approval or other license or authorization necessary for the
performance by the Company of its obligations under the Transaction
Documents;
(vi) promptly after the Company obtains actual knowledge of any one or
more events, conditions or circumstances which has had or could reasonably
be expected to have (i) a Material Adverse Effect or (ii) that permits, or,
with the passage of time would, excuse performance by the Company or
Contractor on account of (x) a Force Majeure
47
condition as defined in and under the PPA or (y) a Force Majeure Event as
defined in and under the EPC Contract; and
(vii) promptly after the Company's receipt thereof, a copy of any
management letter or other similar communication received by the Company
from its Auditors in relation to the Company's financial, accounting and
other systems, management or accounts.
(e) The Company shall furnish or cause to be furnished to the Senior
Parties no later than six (6) months prior to the expiration of the term of the
Power Purchase Agreement (the "TERM EXPIRATION DATE"), a report (an "INDEPENDENT
FORECAST") prepared by an independent consultant which sets forth projections of
(A) electricity prices for the PJM market (or if such market no longer exists at
such time, any successor market or substitute market as determined in good faith
by the Company which approximates, to the extent practicable, such region) and
(B) gas prices on a delivered basis to the Facility, in each case on at least an
annual basis through the Final Maturity Date; PROVIDED, that in the event (i)
the Company enters into a Replacement Power Purchase Agreement that is effective
as of the Term Expiration Date and extends to at least the Final Maturity Date,
(ii) the projected Senior Debt Service Coverage Ratio through the Final Maturity
Date, based on the provisions of such Replacement Power Purchase Agreement,
shall be greater than 2.0 to 1 and (iii) the senior unsecured long-term debt of
such power purchaser(s) under such agreement(s) is rated at least Investment
Grade, then the Company shall not be required to provide the forecast referenced
in this Section 6.3(e).
(f) Upon the request of any Bondholder (or the Trustee on behalf of a
holder of a beneficial interest in the bonds), the Company shall furnish such
information as is specified in paragraph (d)(4) of Rule 144A to such Bondholder
(and holders of beneficial interests in the Bonds), to a prospective purchaser
of the Bonds (and prospective purchasers of beneficial interests in the Bonds)
who is a Qualified Institutional Buyer or Institutional Accredited Investor or
to the Trustee for delivery to such Bondholder prospective purchaser of the
Bonds, as the case may be, unless, at the time of such request, the Company is
subject to the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act.
(g) The information to be provided to the Senior Parties pursuant to
Sections 6.3(a), (b), (c) and (d) above shall also be provided by the Trustee to
(i) the Bondholders and (ii) the holders of beneficial interests in the Bonds or
prospective purchasers of the Bonds or beneficial interests in the Bonds upon
written request to the Trustee (which may be a single continuing request). The
Company shall furnish the Trustee, upon its request, with sufficient copies of
all such information to accommodate the requests of the holders of beneficial
interests in the Bonds and shall pay all reasonable costs and expenses of the
Trustee incurred with respect to such request. The delivery of such information
to the Trustee by the Company is for informational purposes only and the
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein, including the Company's compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely exclusively
on an Officer's Certificate of the Company).
48
(h) The information specified in Sections 6.3(a), (b), (c), (d) and (e)
above shall be provided by the Company to each Rating Agency concurrently with
its delivery to the Senior Parties.
(i) After the Company has registered the Bonds under the Securities
Exchange Act, the Company shall continue to file all such reports as required by
the Securities Exchange Act.
SECTION 6.4 MAINTENANCE OF EXISTENCE, LIENS AND GOVERNMENTAL APPROVALS.
The Company shall at all times:
(a) preserve and maintain in full force and effect (i) its existence as a
limited liability company and its good standing under the laws of the State of
Delaware and (ii) its qualification to do business in each other jurisdiction in
which the character of the properties owned or leased by it or in which the
transaction of its business as conducted or proposed to be conducted makes such
qualification necessary;
(b) obtain and maintain in full force and effect all Governmental Approvals
(including, without limitation, maintaining compliance with Environmental Laws)
and other consents and approvals required at any time in connection with the
construction, maintenance, ownership or operation of the Facility;
(c) preserve and maintain good and marketable title to its properties and
assets (subject to no Liens other than Permitted Liens); and
(d) preserve and maintain the Liens of the Senior Parties on the
Collateral.
SECTION 6.5 NATURE OF BUSINESS.
Neither the Company nor AES URC shall engage in any business other than the
development, financing, construction, operation and maintenance of the Facility
as contemplated by the Project Contracts.
SECTION 6.6 OPERATING AND MAINTENANCE.
The Company shall, or shall cause the Operator to, use, maintain and
operate the Facility and the Site in compliance with generally accepted Prudent
Operating and Maintenance Practices and the material provisions of all relevant
Project Contracts.
SECTION 6.7 COMPLIANCE WITH APPLICABLE LAWS.
The Company shall comply with, and shall ensure that the Facility is
constructed and operated in compliance with, and shall make such alterations to
the Facility and the Site as may be required for compliance with, all Applicable
Laws, Environmental Laws and Governmental Approvals, except where noncompliance
would not reasonably be expected to result in a Material Adverse Effect.
49
SECTION 6.8 PROHIBITION ON CHANGE IN CONTROL.
The Company shall not engage in, or suffer to occur, any Change in Control.
SECTION 6.9 PROJECT CONTRACTS; WILLIAMS GUARANTY; OPERATION OF THE
FACILITY.
(a) The Company shall (i) perform and observe in all material respects its
covenants and agreements contained in any of the Project Contracts, (ii)
enforce, defend and protect all of its rights contained in any of the Project
Contracts and (iii) take all reasonable and necessary actions to prevent the
termination or cancellation of any of the Project Contracts, except in case of
(i) and (ii) above, where such non-performance could not reasonably be expected
to have a Material Adverse Effect.
(b) The Company (i) shall fully enforce its rights under the Williams
Guaranty and the Power Purchase Agreement with respect to substitute security
under the circumstances provided for therein and (ii) shall not, without the
consent of Bondholders holding a majority in outstanding principal amount of the
Bonds, make a written demand for or take any legal action under the Williams
Guaranty if, as a result of payments made pursuant to such demand or legal
action by the Company, the aggregate amount available under the Williams
Guaranty would be less than or equal to the principal amount of the then
outstanding Senior Debt, including without limitation, the undrawn portions of
the maximum amounts of any Working Capital Agreement, any PPA Letter of Credit
or any DSR Letter of Credit. The Company shall (i) in the event of any
termination of the Power Purchase Agreement, fully enforce its rights under the
Williams Guaranty, (ii) use any amounts obtained under the Williams Guaranty to
redeem the Bonds in accordance with this Indenture and to pay principal and
interest on the Company's other Senior Debt in accordance with the Financing
Documents and in each case in accordance with the terms of the Collateral Agency
Agreement and (iii) upon any payment event of default or other event of default
under the Power Purchase Agreement, exercise its rights to terminate the Power
Purchase Agreement in accordance with its terms.
(c) The Company shall (i) exercise all of its rights under the Operations
Agreement to terminate such agreement if (a) a bankruptcy event in respect of
the Operator has occurred and is continuing and (b) the Operator has failed to
perform any material obligation under the Operations Agreement, and (ii)
exercise its rights under the Operations Agreement to cause the Operator to
terminate the Services Agreement pursuant to the terms of such agreement if (a)
a bankruptcy event in respect of AES has occurred and is continuing and (b) AES
has failed to perform any material obligation under the Services Agreement.
50
SECTION 6.10 TRANSACTIONS WITH AFFILIATES.
The Company shall not enter into any transaction or agreement, with any
Affiliate of the Company (each, an "AFFILIATE TRANSACTION") other than (i) the
Operations Agreement, the Services Agreement and the Equity Subscription
Agreement (and any Affiliate Subordinated Loan Agreement referenced therein),
(ii) the URC Documents and (iii) transactions in the ordinary course of business
on fair and reasonable terms no less favorable to the Company than the Company
would obtain in an arm's length transaction with a Person that is not an
Affiliate of the Company.
SECTION 6.11 AMENDMENTS TO PROJECT CONTRACTS.
The Company shall not terminate, amend or modify or consent to the
termination, amendment or modification of (other than pursuant to Sections
6.9(b) and 6.9(c) and other than immaterial amendments or modifications as
certified by the Company) any of the Project Contracts to which it is a party,
or consent to any assignment by another party thereto, unless the Company
certifies to the Senior Parties that (i) such termination, amendment,
modification or assignment is not reasonably expected to result in a Material
Adverse Effect and such termination, amendment, modification or assignment is
not reasonably expected to materially increase the likelihood of the occurrence
of a future Material Adverse Effect and (ii) the Independent Engineer does not
within ten (10) Business Days of receipt of such certificate disagree in writing
to the certification provided pursuant to clause (i); PROVIDED, HOWEVER, that
the Company shall not (a) amend or modify the Power Purchase Agreement, unless
in addition to the requirements of clauses (i) and (ii) above, the Company
certifies that such amendment or modification would not cause the Company's net
operating revenues to decrease by more than five (5) percent and such
certification is confirmed by the Independent Engineer, (b) subject to Section
6.9(b), terminate the Power Purchase Agreement or consent to any release of,
assignment by or change in the identity of the Power Purchaser, unless (1)
within ninety (90) days of such termination or consent resulting from an event
of default by the Power Purchaser under the Power Purchase Agreement, or prior
to any such termination or consent or for any other reason, the Company (A)
enters into a Replacement Power Purchase Agreement or (B) provides the Senior
Parties and each of the Ratings Agencies with a Power Marketing Plan and (2) the
Company provides to the Trustee and the Collateral Agent a Ratings Reaffirmation
from each Rating Agency within such ninety (90)-day period or prior to such
termination or consent, as the case may be, or (c) release or modify in any way
the Williams Guaranty unless the Company obtains substitute security therefor
pursuant to Section 18.3 of the Power Purchase Agreement.
SECTION 6.12 PROHIBITION ON FUNDAMENTAL CHANGES AND DISPOSITION OF ASSETS.
The Company shall not enter into any transaction of merger or
consolidation, change its form of organization or its business, liquidate or
dissolve itself (or suffer any liquidation or dissolution), except as permitted
herein. The Company shall not amend its governing instruments except where such
amendment could not reasonably be expected to result in a Material Adverse
Effect. The Company shall not purchase or otherwise acquire all or substantially
all of the assets of any other Person; PROVIDED, that the Company may maintain
51
ownership interests in subsidiaries if such subsidiaries are involved solely in
owning, leasing, operating, maintaining or supplying fuel for the Facility. In
addition, except as contemplated by the Project Contracts or permitted pursuant
to this Indenture, or as authorized by the first and second provisos below, the
Company shall not sell, lease (as lessor) or transfer (as transferor) any
property or assets material to the operation of the Facility except in the
ordinary course of business to the extent that such property is worn out or is
no longer useful or necessary in connection with the operation of the Facility;
PROVIDED, HOWEVER, that the Company shall not sell, lease or transfer any of
such property or assets without the written approval of the Collateral Agent at
the direction of the Required Senior Parties if the aggregate fair market value
of all sales, leases and transfers in the current Fiscal Year exceeds $5 million
escalated at the GDPIPD; PROVIDED, FURTHER, that the Company may loan useful
spare parts to other electric power generating facilities owned by an Affiliate
of the Company without prior approval of the Trustee or the Collateral Agent on
the conditions that, with respect to any spare part whose value is in excess of
$50,000 (i) at the time of the loan the recipient of the spare part enters into
an enforceable obligation to replace the spare part in kind, or to pay an amount
equal to the replacement value of the spare part to the Company, within thirty
(30) days of the Company's demand for the same, and (ii) immediately preceding
the loan, the Company certifies to the Collateral Agent that the spare part is
not reasonably expected to be required for a planned outage or for scheduled
maintenance of the Facility prior to being replaced, and such certificate is
confirmed by the Independent Engineer.
SECTION 6.13 ANNUAL BUDGET.
Not less than thirty (30) days prior to (i) the anticipated Commercial
Operation Date, and (ii) the commencement of each Fiscal Year thereafter, the
Company shall provide to the Senior Parties and the Rating Agencies an Annual
Budget. The first Annual Budget shall cover the period from the Commercial
Operation Date through the end of the Fiscal Year in which the Commercial
Operation Date occurs, and if such period consists of less than six months, for
the immediately succeeding Fiscal Year. Each Annual Budget shall specify the
estimated sales of capacity and energy pursuant to the Power Purchase Agreement
and any Replacement Power Purchase Agreement and all other sales of capacity and
energy, the estimated rates and revenues for each category of such sales, all
Operating and Maintenance Costs, a manpower forecast, a periodic inspection,
maintenance and repair schedule, a description of all Required Capital
Expenditures and the underlying operating assumption and implementation plans
for the Fiscal Year covered by such Annual Budget. The Company shall operate and
maintain the Facility, or cause the Facility to be operated and maintained, in
accordance with the Annual Budget other than deviations resulting from operating
requirements under the Project Contracts or Prudent Operating and Maintenance
Practices.
SECTION 6.14 INSURANCE REPORT.
Within thirty (30) days after the end of each Fiscal Year, the Company
shall submit to the Senior Parties and each Rating Agency that currently is
rating any of the Outstanding Bonds a certificate (i) listing all insurance
being carried by, or on behalf of, the Company pursuant to this Indenture and
(ii) certifying that all insurance policies required to be maintained pursuant
to the
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Project Contracts and this Indenture are in full force and effect and all
premiums therefor have been fully paid.
SECTION 6.15 LIENS.
The Company shall not create or suffer to exist or permit any Lien upon or
with respect to any of its properties, other than Permitted Liens.
SECTION 6.16 INSPECTION.
The Senior Parties shall have the right, upon reasonable advance written
notice to the Company, to inspect the Facility and the Site from time to time;
provided that the Company shall have the right to specify reasonable dates and
times for any such inspection in order to avoid any material interference with
operation of the Facility.
SECTION 6.17 LIMITATIONS ON ADDITIONAL INDEBTEDNESS.
The Company shall not create or incur or suffer to exist any Debt or lease
obligations except for Permitted Indebtedness.
SECTION 6.18 RESTRICTED PAYMENTS.
The Company shall not make any Restricted Payments unless the Distribution
Conditions set forth in Section 3.14 of the Collateral Agency Agreement have
been satisfied.
SECTION 6.19 CONSTRUCTION OF THE FACILITY.
The Company shall cause the construction of the Facility to be prosecuted
and completed with diligence and continuity (except for interruptions provided
for in the EPC Contract or due to events of force majeure, which events of force
majeure the Company shall use its commercially reasonable efforts to mitigate),
in a good and workmanlike manner and in accordance with sound, generally
accepted building and engineering practices, all material applicable
Governmental Requirements and the EPC Contract. The Company shall at all times
cause a complete set of the current and (when available) as-built plans (and all
supplements thereto) relating to the Facility to be maintained on the Site or
the Contractor's offices and available for inspection by the Independent
Engineer.
SECTION 6.20 CONTRACTOR PERFORMANCE TESTS; FINAL ACCEPTANCE.
(a) The Independent Engineer shall have the right to witness and verify the
performance tests required by the EPC Contract.
(b) The Company shall not, without the prior written consent of the
Independent Engineer, either (i) grant the Final Acceptance Certificate to the
Contractor pursuant to Section 6.5.1.2 of the EPC Contract or (ii) elect to
effect Final Acceptance pursuant to Section 6.5.2 of the EPC Contract.
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SECTION 6.21 CHANGE ORDERS.
The Company shall not initiate or approve any change order under the EPC
Contract unless (i) such change order is technically feasible, (ii) such change
order is not reasonably expected to materially and adversely affect the
operation or reliability of the Facility, (iii) the implementation of such
change order is not reasonably expected to cause the Commercial Operation Date
to occur after the Date Certain and (iv) adequate funds are available to the
Company to fund such change orders and all other Project Costs through the
Commercial Operation Date, and in the event that such change order individually
exceeds $5,000,000 or when aggregated with all other change orders exceeds
$10,000,000, unless the Company certifies in writing to the Collateral Agent as
to clauses (i) - (iv) above and such certification is confirmed by the
Independent Engineer.
SECTION 6.22 CASUALTY PROCEEDS; EMINENT DOMAIN PROCEEDS.
The Company shall cause all Casualty Proceeds and Eminent Domain Proceeds
to be deposited in the Restoration Account under the Collateral Agency
Agreement.
SECTION 6.23 PAYMENT OF TAXES AND IMPOSITIONS.
(a) Subject to the terms of Section 6.23(c), the Company will pay or cause
to be paid, before any fine, interest or penalty is imposed thereon, all
Impositions. If pursuant to any Applicable Law, any Impositions may at the
option of the Company be paid in installments (whether or not interest shall
accrue on the unpaid balance thereof), the Company shall have the right,
provided that no Event of Default shall then exist, to exercise such option and
to pay or cause to be paid such Impositions and any accrued interest thereon in
installments as they fall due and before any fine, penalty, further interest or
cost may be added thereto.
(b) The Company will pay all taxes and other governmental charges
(including without limitation, stamp taxes) assessed by any Governmental
Authorities and imposed on the Collateral Agent, its successors or assignees, by
reason of the Collateral Agent's status as mortgagee under the Mortgage or the
other Security Documents or imposed upon either the Company or the Collateral
Agent upon any modification, amendment, extension and/or consolidation thereof.
The Company will also pay any tax imposed directly or indirectly on the Mortgage
in lieu of a tax on the Mortgaged Property or any part thereof, whether by
reason of (i) the passage after the date of the Mortgage of any law of the State
of New Jersey deducting from the value of real property for the purposes of
taxation any lien thereon, (ii) any change in the laws for the taxation of
mortgages or debts secured by mortgages for state or local purposes, (iii) a
change in the means of collection of any such tax, or (iv) any tax, now or
hereafter assessed against the Mortgage or assessed against, or withheld from,
any payments made by the Company hereunder. Within a reasonable time after
payment of any such tax or governmental charge, the Company will deliver to the
Trustee and the Collateral Agent satisfactory proof of payment thereof.
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(c) The Company will not claim or demand or be entitled to any credit or
credits for the payment of any Impositions, and no deduction shall otherwise be
made or claimed from the taxable value of the Mortgaged Property, or any part
thereof, by reason of the Mortgage.
SECTION 6.24 PRESERVATION OF LIEN OF MORTGAGE.
The Company will (i) preserve its right, title and interest in and to the
Mortgaged Property and will warrant and defend the same against and all claims
and demands whatsoever, (ii) continue to have full power and lawful authority to
encumber and convey the Mortgaged Property as provided in the Mortgage, and
(iii) maintain and preserve the priority of the lien of the Mortgage until all
of the obligations under the Financing Documents are paid and performed in full.
SECTION 6.25 OWNERSHIP OF URC.
The Company shall at all times while any Bonds are Outstanding, own
directly or indirectly 100% of the ownership interests in AES URC.
ARTICLE VII
REDEMPTION AND PREPAYMENT OF BONDS
SECTION 7.1 APPLICABILITY OF ARTICLE.
Bonds of any series that are subject to redemption or prepayment before
their Stated Maturity (or, if the principal of the Bonds of any series is
payable in installments, the Stated Maturity of the final installment of the
principal thereof) shall be redeemed or prepaid in accordance with their terms
and (except as otherwise specified in the Series Supplemental Indenture creating
such series) in accordance with this Article VII.
SECTION 7.2 ELECTION TO REDEEM OR PREPAY; NOTICE TO TRUSTEE.
The election of the Company to redeem or prepay any Bonds otherwise than
through a sinking fund shall be evidenced by a Company Order. If the Company
determines or is required to redeem or prepay any Bonds, the Company shall, at
least fifteen days prior to the date upon which notice of redemption or
prepayment is required to be given to the Bondholders pursuant to Section 7.4
(unless a shorter notice period shall be satisfactory to the Trustee), deliver
to the Trustee a Company Order specifying the date on which such redemption or
prepayment shall occur (the "REDEMPTION DATE" or "PREPAYMENT DATE," as the case
may be) and the series and principal amount of Bonds to be redeemed or prepaid.
Upon receipt of any such Company Order, the Trustee shall establish a Redemption
Subaccount into which shall be deposited amounts to be held by the Trustee and
applied to the redemption or prepayment of such Bonds. In the case of any
redemption or prepayment of Bonds (i) prior to the expiration of any restriction
on such redemption or prepayment provided in the terms of such Bonds, the Series
Supplemental Indenture relating thereto or elsewhere in this Indenture or (ii)
pursuant to an election of the Company that is subject to a condition specified
in the terms of such Bonds or in
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the Series Supplemental Indenture relating thereto, the Company shall furnish
the Trustee with an Officer's Certificate and Opinion of Counsel evidencing
compliance with such restriction or condition.
SECTION 7.3 OPTIONAL REDEMPTION; MANDATORY REDEMPTION; PREPAYMENT;
SELECTION OF BONDS TO BE REDEEMED OR PREPAID.
(a) The Bonds of any series shall be subject to redemption from time to
time at the option of the Company only as provided in the Series Supplemental
Indenture relating thereto.
(b) All Outstanding Bonds shall be redeemed prior to maturity, as a whole,
at a redemption price equal to the principal amount thereof, together with
interest on the principal amount of the Bonds accrued through the Redemption
Date, in the event the Company or the Collateral Agent receives Casualty
Proceeds or Eminent Domain Proceeds upon the occurrence of either an Event of
Loss or an Event of Eminent Domain that has been determined in accordance with
Section 3.15(d) of the Collateral Agency Agreement to render the Facility
substantially destroyed or taken and incapable of being rebuilt, repaired or
restored, as the case may be, to permit operation on a commercially feasible
basis. All Casualty Proceeds or Eminent Domain Proceeds, as the case may be,
received by the Trustee pursuant to Section 4.2 of the Collateral Agency
Agreement with respect to such Event of Loss or Event of Eminent Domain, as the
case may be, shall be applied by the Trustee to the redemption of the Bonds
pursuant to this Section 7.3(b). The foregoing provisions of this Section 7.3(b)
may be altered in a Series Supplemental Indenture, but such altered provisions
shall not be effective while any Outstanding Bonds on the date of such Series
Supplemental Indenture remain Outstanding.
Any redemption pursuant to this Section 7.3(b) shall be made within 90 days
after the receipt by the Trustee of the Casualty Proceeds or Eminent Domain
Proceeds, as the case may be.
(c) The Outstanding Bonds shall be redeemed prior to maturity, as a whole
or in part, ratably among all outstanding series, at a redemption price equal to
the principal amount thereof, together with interest on the principal amount of
the Bonds accrued through the Redemption Date, if the Company or the Collateral
Agent receives amounts identified by the Company in an Officer's Certificate as
proceeds under the Williams Guaranty upon termination of the Power Purchase
Agreement by the Company as a result of an event of default by the Power
Purchaser under the Power Purchase Agreement. All such proceeds received by the
Trustee pursuant to Section 4.1 of the Collateral Agency Agreement with respect
to such termination of the Power Purchase Agreement shall be applied by the
Trustee to the redemption of the Bonds pursuant to this Section 7.3(c). The
foregoing provisions of this Section 7.3(c) may be altered in a Series
Supplemental Indenture, but such altered provisions shall not be effective while
any Outstanding Bonds on the date of such Series Supplemental Indenture remain
outstanding.
After payment of certain administrative fees pursuant to clause FIRST of
Section 4.1(a) of the Collateral Agency Agreement, the aggregate amount of the
Bonds to be redeemed pursuant to this Section 7.3(c) (including accrued and
unpaid interest thereon) will equal an amount which is equal to (x) the amount
paid under the Williams Guaranty multiplied by (y) a fraction the
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numerator of which is the then outstanding principal amount of the Bonds and
accrued and unpaid interest thereon and the denominator of which is the
principal and accrued interest on all Senior Debt including the Bonds, such
amount to be calculated by the Company and specified in an Officer's Certificate
delivered to the Senior Parties.
Any redemption pursuant to this Section 7.3(c) shall be made within 90 days
after the receipt by the Trustee of the proceeds under the Williams Guaranty.
(d) Outstanding Bonds shall be partially redeemed, ratably among all
outstanding series, prior to maturity at a redemption price equal to the
principal amount thereof, together with interest on the principal amount of the
Bonds accrued through the Redemption Date, if the Company or the Collateral
Agent receives Casualty Proceeds or Eminent Domain Proceeds upon the occurrence
of either an Event of Loss or an Event of Eminent Domain that has been
determined in accordance with Section 3.15(d) of the Collateral Agency Agreement
to render a portion of the Facility substantially destroyed or taken and
incapable of being rebuilt, repaired, or restored, as the case may be, to permit
operation on a commercially feasible basis, but permits the remaining portion of
the Facility to be rebuilt, repaired or restored, as the case may be, to permit
operation of such remaining portion of the Facility on a commercially feasible
basis (except when the proceeds not used for rebuilding, repair or restoration
do not exceed $5 million and the Company certifies to the Trustee and the
Collateral Agent, which certification is confirmed by the Independent Engineer,
that (i) such proceeds are not needed for rebuilding, repair or restoration of
the facility and (ii) not using such proceeds for the rebuilding, repair or
restoration of the Facility would not reasonably be expected to result in a
Material Adverse Effect). The foregoing provisions of this Section 7.3(d) may be
altered in a Series Supplemental Indenture, but such altered provisions shall
not be effective while any Outstanding Bonds on the date of such Series
Supplemental Indenture remain outstanding.
The amount (rounded down to the nearest $1,000) by which all of the
Casualty Proceeds or the Eminent Domain Proceeds, as the case may be, received
by the Trustee pursuant to Section 4.2 of the Collateral Agency Agreement
exceeds the estimate of the total cost of rebuilding, repairing and restoring
the Facility made in accordance with Section 3.15(d) of the Collateral Agency
Agreement shall be applied by the Trustee to the redemption of the Bonds
pursuant to this Section 7.3(d); PROVIDED, that the amount so received is not
less than $5,000,000. Any funds received by the Trustee pursuant to this Section
7.3(d) in an amount less than $5,000,000 shall be transferred to the Redemption
Subaccount.
Any redemption pursuant to this Section 7.3(d) shall be made within 90 days
after the receipt by the Trustee of such Casualty Proceeds or Eminent Domain
Proceeds (other than such proceeds transferred to the Redemption Subaccount), as
the case may be.
(e) [Reserved].
(f) Outstanding Bonds shall be partially redeemed, ratably among all
outstanding series, prior to maturity at a redemption price equal to the
outstanding principal amount thereof, together with interest on the principal
amount of the Bonds accrued through the Redemption Date, if the Company or the
Collateral Agent receives Buy-Down Amounts. The foregoing
57
provisions of this Section 7.3(f) may be altered in a Series Supplemental
Indenture, but such altered provisions shall not be effective while any Bonds
Outstanding on the date of such Series Supplemental Indenture remain
outstanding.
The amount (rounded down to the nearest $1,000) of Buy-Down Amounts
received by the Trustee from the Collateral Agent pursuant to Section 4.3 of the
Collateral Agency Agreement shall be applied by the Trustee to the redemption of
Bonds pursuant to this Section 7.3(f); PROVIDED, that the amount so received is
not less than $5,000,000. Any funds received by the Trustee pursuant to this
Section 7.3(f) in an amount less than $5,000,000 shall be transferred to the
Redemption Subaccount.
Any redemption pursuant to this Section 7.3(f) shall be made within 90 days
after receipt by the Trustee of such proceeds (other than such proceeds
transferred from the Redemption Subaccount).
(g) Except as otherwise specified herein or in the Series Supplemental
Indenture relating to the Bonds of a series, if less than all the Bonds of such
series are to be redeemed or prepaid pursuant to Section 7.3(a), the particular
Bonds of such series to be redeemed or prepaid shall be selected by the Trustee
from the Outstanding Bonds of such series not previously called for redemption
or prepayment in whole, by such method (including by lot) as the Trustee shall
deem fair and appropriate.
(h) The Trustee shall promptly notify the Company in writing of the Bonds
selected for redemption or prepayment and, in the case of any Bonds to be
redeemed or prepaid in part, the principal amount thereof to be redeemed or
prepaid.
(i) For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption or prepayment of Bonds shall
relate, in the case of any Bonds redeemed or prepaid or to be redeemed or
prepaid only in part, to the portion of the principal amount of such Bonds that
has been or is to be redeemed or prepaid.
SECTION 7.4 NOTICE OF REDEMPTION OR PREPAYMENT.
Except as otherwise specified in the Series Supplemental Indenture relating
to the Bonds of a series to be redeemed or prepaid, notice of redemption or
prepayment shall be given in the manner provided in Section 1.6 to the
Bondholders of such series to be redeemed or prepaid at least 30 days but not
more than 60 days prior to the Redemption Date or Prepayment Date, as the case
may be. All notices of redemption or prepayment shall describe the Bonds that
are to be redeemed or prepared, including CUSIP number, and shall state:
(i) the Redemption Date or Prepayment Date, as the case may be;
(ii) the premium payable on redemption or prepayment, if any;
(iii) if less than all the Outstanding Bonds of any series are to be
redeemed or prepaid in whole, (i) the identification of the particular
Bonds of such series to be
58
redeemed or prepaid in whole, or (ii) the portion of the principal amount
of each Bond of such series to be redeemed or prepaid in part, and a
statement that, on and after the Redemption Date or Prepayment Date, as the
case may be, upon surrender of such Bond, a new Bond or Bonds of such
series in principal amount equal to the remaining unpaid principal amount
thereof shall be issued;
(iv) that on the Redemption Date or Prepayment Date, as the case may
be, interest thereon shall cease to accrue on and after such date;
(v) the Place or Places of Payment where such Bonds are to be
surrendered for payment of the amount in respect of such redemption or
prepayment; and
(vi) the Section of this Indenture or the Series Supplemental
Indenture pursuant to which the bonds are being redeemed.
Notice of redemption of Bonds to be redeemed at the election of the Company
shall be given by the Company or, at the Company's request, by the Trustee in
the name and at the expense of the Company.
SECTION 7.5 BONDS PAYABLE ON REDEMPTION DATE OR PREPAYMENT DATE.
Notice of redemption or prepayment, as the case may be, having been given
as aforesaid, and the conditions, if any, set forth in such notice having been
satisfied, the Bonds or portions thereof so to be redeemed or prepaid shall, on
the Redemption Date or Prepayment Date, as the case may be, become due and
payable, and from and after such date such Bonds or portions thereof shall cease
to bear interest. Upon surrender of any such Bond for redemption or prepayment
in accordance with such notice, an amount in respect of such Bond or portion
thereof shall be paid as provided therein; PROVIDED, HOWEVER, that any payment
of interest on any Bond the Stated Maturity of which payment is on or prior to
the Redemption Date or Prepayment Date, as the case may be, shall be payable to
the Bondholder of such Bond, or one or more Predecessor Bonds, registered as
such at the close of business on the related Regular Record Date according to
the terms of such Bond and subject to the provisions of Section 2.10.
SECTION 7.6 BONDS REDEEMED OR PREPAID IN PART.
Any Bond that is to be redeemed or prepaid only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Bondholder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and make available for delivery to
such Bondholder without service charge, a new Bond or Bonds of the same series,
of any authorized denomination requested by such Bondholder and of like tenor
and in aggregate principal amount equal to and in exchange for the remaining
unpaid principal amount of the Bond so surrendered.
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ARTICLE VIII
SINKING FUNDS
SECTION 8.1 APPLICABILITY OF ARTICLE.
The provisions of this Article VIII shall be applicable to any sinking fund
for the retirement of the Bonds of any series except as otherwise specified in
the Series Supplemental Indenture creating the Bonds of such series.
SECTION 8.2 SINKING FUNDS FOR BONDS.
Any Series Supplemental Indenture may provide for a sinking fund for the
retirement of the Bonds of the series created thereby (a "SINKING FUND") in
accordance with which the Company will be required to redeem on the dates set
forth therein ("SINKING FUND REDEMPTION DATES") Bonds of principal amounts set
forth therein ("SINKING FUND REQUIREMENTS").
Except as otherwise specified in the Series Supplemental Indenture relating
to the Bonds of a series, the particular Bonds of such series, if any, to be
redeemed through a Sinking Fund shall be selected in the manner provided in
Section 7.3(g), and notice of such redemption shall be given in the manner
provided in Section 7.4.
ARTICLE IX
EVENTS OF DEFAULT; REMEDIES
SECTION 9.1 EVENTS OF DEFAULT.
The term "EVENT OF DEFAULT," whenever used herein, means any of the
following events (whatever the reason for such event and whether voluntary or
involuntary, affected by question of law, or pursuant to or in compliance with
any Applicable Law) and such event shall continue to be an Event of Default if
and for so long as it shall not have been remedied:
(a) The Company shall fail to pay any principal, interest or premium, if
any, including any Make-Whole Premium, on a Bond when the same becomes due and
payable, whether at scheduled maturity or required prepayment or by acceleration
or otherwise and such failure shall continue for ten (10) or more days; or
(b) Any representation or warranty made by the Company herein or in any
certificate delivered pursuant to any Financing Documents shall prove to have
been false or misleading in any respect as of the time made, confirmed or
furnished and the inaccuracy has resulted or is reasonably expected to result in
a Material Adverse Effect and the circumstances surrounding such
misrepresentation shall continue uncured for thirty (30) or more days from the
discovery thereof; PROVIDED, that if the Company commences efforts to cure the
factual situation resulting in such misrepresentation within such 30-day period,
the Company may continue to effect such cure of the misrepresentation, and such
misrepresentation shall not be deemed an Event of
60
Default, for an additional sixty (60) days so long as the Company certifies that
no other Event of Default has occurred and is continuing and the Company is
diligently pursuing the cure; or
(c) The Company shall fail to maintain insurance in accordance with Section
6.2; or
(d) The Company shall fail to perform or observe any covenant or agreement
contained in Sections 6.4 (Maintenance of Existence and Governmental Approvals),
6.5 (Nature of Business), 6.7 (Compliance with Applicable Laws), 6.11
(Amendments to Project Contracts), 6.12 (Prohibition on Fundamental Changes and
Disposition of Assets), 6.15 (Liens), 6.17 (Indebtedness) or 6.18 (Restricted
Payments) herein and such failure shall continue uncured for more than thirty
(30) days after the Company has actual knowledge of such failure; or
(e) A Change in Control shall have occurred; or
(f) The Company shall fail to perform or observe any of its covenants or
agreements contained in the Collateral Agency Agreement or in any other
provision of this Indenture not referred to above and such failure shall
continue uncured for more than thirty (30) days after the Company has actual
knowledge of such failure; PROVIDED, that if the Company commences efforts to
cure such default within such thirty (30)-day period and is diligently
attempting to cure such default (and certifies to the Trustee the steps it is
taking), the Company may continue to effect such cure of the default (and such
default shall not be deemed an "EVENT OF DEFAULT" hereunder) for an additional
sixty (60) days so long as the Company certifies that no other Event of Default
has occurred and is continuing and the Company is diligently pursuing such cure;
or
(g) The Company, or, so long as AES URC has any interest in the Site or the
Facility, AES URC or, so long as AES has any outstanding obligations under any
Acceptable Credit Support, AES or, so long as AES Red Oak has any outstanding
obligations under the Equity Subscription Agreement, AES Red Oak shall (i) apply
for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of itself or of all or substantially
all of its property, (ii) admit in writing its inability, or be generally
unable, to pay its debts as such debts become due, (iii) make a general
assignment of the benefit of its creditors, (iv) commence a voluntary case under
the Bankruptcy Code, (v) file a petition seeking to take advantage of any law
relating to bankruptcy, insolvency, reorganization, winding-up or the
composition or readjustment of debts, (vi) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed against such
Person in an involuntary case under the Bankruptcy Code or (vii) take any
corporate or other action for the purpose of effecting any of the foregoing; or
(h) A proceeding or case shall be commenced without the application or
consent of the Company, or, so long as AES URC has any interest in the Site or
the Facility, AES URC or, so long as AES has any obligations under any
Acceptable Credit Support, AES or, so long as AES Red Oak has any outstanding
obligations under the Equity Subscription Agreement, AES Red Oak in any court of
competent jurisdiction, seeking (i) its liquidation, reorganization,
dissolution, winding-up, or the composition or readjustment of debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of such
Person under any law relating to bankruptcy, insolvency, reorganization,
winding-up or the composition or adjustment of debts,
61
and such proceeding or case shall continue undismissed, or any order, judgment
or decree approving or ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of ninety (90) or more consecutive
days, or any order for relief against such Person shall be entered in an
involuntary case under the Bankruptcy Code (each event described in subsection
(g) and (h) of this Section 9.1 is hereinafter referred to as a "BANKRUPTCY
EVENT"); or
(i) A final and non-appealable judgment or judgments for the payment of
money in excess of $15,000,000 shall be rendered against the Company, and the
same remain unpaid or unstayed for a period of sixty (60) or more consecutive
days from the date of entry thereof; or
(j) An "Event of Default" has occurred and is continuing in respect of any
Indebtedness of the Company under the DSR LOC Reimbursement Agreement, the PPA
LOC Reimbursement Agreement or any other Indebtedness of the Company the holder
of which (or an agent or trustee therefor) is a party to the Collateral Agency
Agreement, or an "Event of Default" has occurred and is continuing in respect of
any other Indebtedness of the Company having a principal amount exceeding
$15,000,000; or
(k) With respect to any Project Contract: (i) such Project Contract is
declared unenforceable by a Governmental Authority, (ii) any other party thereto
denies it has a material obligation under such Project Contract or (iii) any
other party thereto defaults in respect of its obligations under such Project
Contract, and in the case of each event described in clause (i), (ii) or (iii),
such event would be likely to result in a Material Adverse Effect; PROVIDED,
HOWEVER, that none of such events shall be an Event of Default hereunder if
within one hundred eighty (180) days (ninety (90) days in respect of the Power
Purchase Agreement or the EPC Contract) from the occurrence of such event (A)
the other party resumes performance or enters into an alternative agreement with
the Company or (B) the Company enters into a replacement contract or contracts
with another party or parties which (1) contains, as certified by the Company,
substantially equivalent terms and conditions or, if such terms and conditions
are no longer available on a commercially reasonable basis, the terms and
conditions then available on a commercially reasonable basis and (2) either (I)
the Company provides to the Trustee and the Collateral Agent a Ratings
Reaffirmation from each Rating Agency or (II) the Company certifies that it
would, after giving effect to the alternative agreement, maintain a projected
minimum Senior Debt Service Coverage Ratio for each year during the remaining
term of the Bonds equal to or greater than the lesser of (x) the projected
minimum annual Senior Debt Service Coverage Ratio which would have been in
effect had performance under the original Project Contract continued and (y)
1.25 to 1.0 or (C) in the case of the Power Purchase Agreement, the Company
delivers to the Trustee and Collateral Agent a Power Marketing Plan and either
(a) certifies that based on projections prepared on a reasonable basis and based
on an Independent Forecast prepared at such time, the average and minimum annual
Senior Debt Service Coverage Ratios through the final Maturity Date of any
Outstanding Bonds will at least equal such projections as set forth in the
offering circular at the time of the issuance of such Bonds, or (b) obtains a
Ratings Reaffirmation from each Ratings Agency; or
(l) Any grant of a Lien contained in the Security Documents shall cease to
be effective to grant a perfected Lien to the Trustee or the Collateral Agent on
a material portion of
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the Collateral described therein with the priority purported to be created
thereby; PROVIDED, HOWEVER, that the Company shall have ten (10) days from
actual knowledge thereof to cure any such cessation; or
(m) The construction of the Facility is permanently abandoned; or
(n) AES Red Oak fails to perform or breaches any of its payment obligations
under the Equity Subscription Agreement and such failure or breach continues for
ten (10) Business Days or more; or
(o) Any Acceptable Credit Provider fails to perform or breaches any of its
payment obligations under any Acceptable Credit Support and such failure or
breach continues for ten (10) Business Days or more.
SECTION 9.2 ENFORCEMENT OF REMEDIES.
(a) If one or more Events of Default shall have occurred and be continuing,
then:
(i) in the case of a Bankruptcy Event, the entire principal amount of
the Outstanding Bonds, all interest accrued and unpaid thereon, and all
premium payable under the Bonds and this Indenture, if any, shall
automatically become due and payable without presentment, demand, protest
or notice of any kind, all of which are hereby waived; or
(ii) in the case of any other Event of Default the Trustee may and,
upon written direction of the Bondholders of not less than 33 1/3% of the
aggregate principal amount of the Outstanding Bonds, the Trustee shall, by
notice to the Company, declare the entire principal amounts of the
Outstanding Bonds, all interest accrued and unpaid thereon, and all premium
payable under the Bonds and this Indenture, if any, to be due and payable,
whereupon the same shall become due and payable without presentment,
demand, protest or further notice of any kind, all of which are hereby
waived; or
(iii) the Trustee shall (if the Required Bondholders request in
writing to the Trustee) direct the Collateral Agent (to the extent
permitted under the Collateral Agency Agreement) to take possession of all
the Collateral and, pursuant to the Collateral Agency Agreement, to sell
the Collateral, as and to the extent permitted under the Collateral Agency
Agreement.
(b) If an Event of Default occurs and is continuing and is known to the
Trustee (as described in Section 10.3(h)), the Trustee shall mail to each
Bondholder a notice of the Event of Default within thirty (30) days after
obtaining such knowledge thereof. Except in the case of an Event of Default in
payment of principal of or interest on any Bond, the Trustee may withhold the
notice to the Bondholders if a committee of its trust officers in good faith
determines that withholding the notice is in the interest of Bondholders.
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(c) At any time after the principal of the Bonds shall have become due and
payable upon a declared (but not an automatic) acceleration as provided herein,
and before any judgment or decree for the payment of the money so due, or any
portion thereof, shall be entered, the Bondholders of not less than a majority
in aggregate principal amount of the Outstanding Bonds, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(i) there shall have been paid to or deposited with the Trustee a sum
sufficient to pay
(A) all sums paid or advanced by the Trustee hereunder and the
compensation (including reasonable attorneys' fees and expenses),
expenses, disbursements, and advances of the Trustee, its agents and
counsel,
(B) all overdue installments of interest on the Bonds,
(C) the principal of and premium, if any, on any Bonds that have
become due otherwise than by such declaration of acceleration and
interest thereon at the respective rates provided in the Bonds for
late payments of principal or premium, and
(D) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest at the respective rates
provided in the Bonds for late payments of interest.
(ii) all Events of Default, other than the non-payment of the
principal of the Bonds that has become due solely by such acceleration,
have been cured or waived as provided in Section 9.7.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 9.3 SPECIFIC REMEDIES.
If any Event of Default shall have occurred and be continuing and an
acceleration shall have occurred pursuant to Section 9.2, subject to the
provisions of Sections 9.2, 9.5, 9.6, 9.15, 10.3 and 10.7, the Trustee may sell,
without recourse, for cash, or credit or for other property, for immediate or
future delivery, and for such price or prices and on such terms as the Trustee
in its discretion may determine, the collateral securing the Bonds referred to
in the Granting Clause (for the purposes of Article IX, Article X and Article
XII, the "INDENTURE COLLATERAL") as an entirety, or in such portions as the
Bondholders of a majority in aggregate principal amount of the Bonds then
Outstanding shall request by an Act of Bondholders, or, in the absence of such
request, as the Trustee in its discretion shall deem expedient in the interest
of the Bondholders, at public or private sale.
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SECTION 9.4 JUDICIAL PROCEEDINGS INSTITUTED BY TRUSTEE.
(a) TRUSTEE MAY BRING SUIT. If there shall exist an Event of Default, then
the Trustee, after receiving any indemnification satisfactory to it for its
costs pursuant to Sections 10.3(e) and 10.7, in its own name, and as trustee of
an express trust, subject to the provisions of Sections 2.14 and 9.2, shall be
entitled and empowered to institute any suits, actions or proceedings at law, in
equity or otherwise, for the collection of the sums so due and unpaid on the
Bonds, and may prosecute any such claim or proceeding to judgment or final
decree, and may enforce any such judgment or final decree and collect the funds
adjudged or decreed to be payable in any manner provided by law, whether before
or after or during the pendency of any proceedings for the enforcement of the
Lien of this Indenture, or of any of the Trustee's rights or the rights of the
Bondholders under this Indenture, and such power of the Trustee shall not be
affected by any sale hereunder or by the exercise of any other right, power or
remedy for the enforcement of the provisions of this Indenture or for the
foreclosure of the Lien hereof.
(b) TRUSTEE SHALL RECOVER UNPAID INDEBTEDNESS AFTER SALE OF INDENTURE
COLLATERAL. Subject to Section 2.14, in the case of a sale of the Indenture
Collateral and of the application of the proceeds of such sale to the payment of
the indebtedness secured by this Indenture, the Trustee, after receiving
indemnification or assurance of indemnification to its satisfaction for its
costs pursuant to Sections 10.3(e) and 10.7, in its own name, and as trustee of
an express trust, shall be entitled and empowered, by any appropriate means,
legal, equitable or otherwise, to enforce payment of, and to receive all amounts
then remaining due and unpaid upon, all or any of the Bonds, for the benefit of
the Bondholders thereof, and upon any other portion of the indebtedness
remaining unpaid, with interest at the rates specified in the respective Bonds
on the overdue principal of and premium, if any, and (to the extent that payment
of such interest is legally enforceable) on the overdue installments of
interest.
(c) RECOVERY OF JUDGMENT DOES NOT AFFECT LIEN OF THIS INDENTURE OR OTHER
RIGHTS. No recovery of any such judgment or final decree by the Trustee and no
levy of any execution under any such judgment upon any of the Indenture
Collateral, or upon any other property, shall in any manner or to any extent
affect the Lien of this Indenture upon any of the Indenture Collateral, or any
rights, powers or remedies of the Trustee, or any liens, rights, powers or
remedies of the Bondholders, but all such liens, rights, powers or remedies
shall continue unimpaired as before.
(d) TRUSTEE SHALL FILE PROOFS OF CLAIM, APPOINTMENT OF TRUSTEE AS
ATTORNEY-IN-FACT IN JUDICIAL PROCEEDINGS. The Trustee in its own name, or as
trustee of an express trust, or as attorney-in-fact for the Bondholders, or in
any one or more of such capacities (irrespective of whether the principal of the
Bonds shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand for
the payment of overdue principal, premium, if any, or interest), shall be
entitled and empowered to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and of the Bondholders (whether such claims be based upon the provisions
of the Bonds or of this Indenture) allowed in any equity, receivership,
insolvency, bankruptcy, liquidation, readjustment, reorganization or any other
judicial
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proceedings relating to the Company or any obligor on the Bonds, the creditors
of the Company or any such obligor, the Indenture Collateral or any other
property of the Company or any such obligor and any receiver, assignee, trustee,
liquidator, sequestrator (or other similar official) in any such judicial
proceeding is hereby authorized by each Bondholder to make such payments to the
Trustee and, if the Trustee shall consent to the making of such payments
directly to the Bondholders, to pay to the Trustee any amount due to it for the
compensation, reasonable expenses, disbursements and advances of the Trustee,
its agents and counsel. The Trustee is hereby irrevocably appointed (and the
successive respective Bondholders, by taking and holding the same, shall be
conclusively deemed to have so appointed the Trustee) the true and lawful
attorney-in-fact of the respective Bondholders, with authority to (i) make and
file in the respective names of the Bondholders (subject to deduction from any
such claims of the amounts of any claims filed by any of the Bondholders
themselves), any claim, proof of claim or amendment thereof, debt, proof of debt
or amendment thereof, petition or other document in any such proceedings and to
receive payment of any amounts distributable on account thereof, (ii) execute
any such other papers and documents and to do and perform any and all such acts
and things for and on behalf of such Bondholders, as may be necessary or
advisable in order to have the respective claims of the Trustee and of the
Bondholders against the Company or any such obligor, the Indenture Collateral or
any other property of the Company or any such obligor allowed in any such
proceeding and (iii) receive payment of or on account of such claims and debt;
PROVIDED, HOWEVER, that nothing contained in this Indenture shall be deemed to
give to the Trustee any right to accept or consent to any plan or reorganization
or otherwise by action of any character in any such proceeding to waive or
change in any way any right of any Bondholder. Any funds collected by the
Trustee under this Section shall be applied as provided in Section 9.11.
(e) TRUSTEE NEED NOT HAVE POSSESSION OF BONDS. All proofs of claim, rights
of action and rights to assert claims under this Indenture or under any of the
Bonds may be enforced by the Trustee without the possession of the Bonds or the
production thereof at any trial or other proceedings instituted by the Trustee.
In any proceedings brought by the Trustee (and also any proceedings involving
the interpretation of any provision of this Indenture to which the Trustee shall
be a party) the Trustee shall be held to represent all the Bondholders and it
shall not be necessary to make any such Bondholders parties to such proceedings.
(f) SUIT TO BE BROUGHT FOR RATABLE BENEFIT OF BONDHOLDERS. Any suit, action
or other proceeding at law, in equity or otherwise which shall be instituted by
the Trustee under any of the provisions of this Indenture shall be for the
equal, ratable and common benefit of all the Bondholders, subject to the
provisions of this Indenture.
(g) TRUSTEE MAY BE RESTORED TO FORMER POSITION AND RIGHTS IN CERTAIN
CIRCUMSTANCES. In case the Trustee shall have instituted any proceeding to
enforce any right, power or remedy under this Indenture by foreclosure, entry or
otherwise, and such proceedings shall have been discontinued or abandoned for
any reason or shall have been determined adversely to the Trustee, then and in
every such case the Company and the Trustee shall be restored to their former
positions and rights hereunder, and all rights, powers and remedies of the
Trustee shall continue as if no such proceedings had been taken.
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SECTION 9.5 HOLDERS MAY DEMAND ENFORCEMENT OF RIGHTS BY TRUSTEE.
If an Event of Default shall have occurred and shall be continuing, the
Trustee shall, upon the written request of the Bondholders of a majority in
aggregate principal amount of the Bonds then Outstanding and upon the offering
of indemnity as provided in Section 10.3(e), but subject in all cases to the
provisions of Section 9.3, proceed to institute one or more suits, actions or
proceedings at law, in equity or otherwise, or take any other appropriate
remedy, to enforce payment of the principal of, or premium, if any, or interest
on, the Bonds or to foreclose the lien of this Indenture or to sell the
Indenture Collateral under a judgment or decree of a court or courts of
competent jurisdiction or under the power of sale herein granted, or take such
other appropriate legal, equitable or other remedy, as the Trustee, being
advised by counsel, shall deem most effectual to protect and enforce any of the
rights or powers of the Trustee or the Bondholders, or, in case such Bondholders
shall have requested a specific method of enforcement permitted hereunder, in
the manner requested; PROVIDED, that such action shall not be otherwise than in
accordance with law and the provisions of this Indenture, and the Trustee,
subject to such indemnity provisions, shall have the right to decline to follow
any such request if the Trustee in good faith shall determine that the suit,
proceeding or exercise of the remedy so requested would involve the Trustee in
personal liability or expense.
SECTION 9.6 CONTROL BY BONDHOLDERS.
Subject to Sections 10.3(e) and 10.7, the Bondholders of not less than a
majority in aggregate principal amount of the Outstanding Bonds shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee; PROVIDED, that (i) such direction shall not be in conflict with any
Applicable Law or with this Indenture and (ii) the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such
direction.
SECTION 9.7 WAIVER OF PAST DEFAULTS.
The Bondholders of not less than a majority in aggregate principal amount
of the Outstanding Bonds may on behalf of the Bondholders of all Bonds waive any
past Default and its consequences except that only the Bondholders of all Bonds
affected thereby may waive a Default (i) in the payment of the principal of or
premium, if any, or interest on, or other amounts due under, any Bond then
Outstanding or (ii) in respect of a covenant or provision hereof that under
Article XII cannot be modified or amended without the consent of the Bondholder
of each Bond Outstanding affected. Upon any such waiver such Default shall cease
to exist and any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture, but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereon.
SECTION 9.8 HOLDER MAY NOT BRING SUIT EXCEPT UNDER CERTAIN CONDITIONS.
A Bondholder shall not have the right to institute any suit, action or
proceeding at law or in equity or otherwise for the foreclosure of the Lien of
this Indenture, for the appointment of a receiver or for the enforcement of any
other remedy under or upon this Indenture, unless:
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(a) such Bondholder previously shall have given written notice to a
Responsible Officer of the Trustee of a continuing Event of Default;
(b) the Bondholders of at least 25% in aggregate principal amount of the
Outstanding Bonds shall have requested the Trustee in writing to institute such
action, suit or proceeding and shall have offered to the Trustee indemnity as
provided in Section 10.3(e);
(c) the Trustee shall have refused or neglected to institute any such
action, suit or proceeding for 60 days after receipt of such notice, request and
offer of indemnity; and
(d) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Bondholders of a majority in
principal amount of Outstanding Bonds.
It is understood and intended that no one or more of the Bondholders shall
have any right in any manner whatever hereunder or under the Bonds to (i)
surrender, impair, waive, affect, disturb or prejudice the Lien of this
Indenture on any property subject thereto or the rights of the Bondholders of
any other Bonds, (ii) obtain or seek to obtain priority or preference over any
other such Bondholder or (iii) enforce any right under this Indenture, except in
the manner herein provided and for the equal, ratable and common benefit of all
the Bondholders subject to the provisions of this Indenture.
SECTION 9.9 UNDERTAKING TO PAY COURT COSTS.
All parties to this Indenture, and each Bondholder by his acceptance of a
Bond, shall be deemed to have agreed that any court may in its discretion
require, in any suit, action or proceeding for the enforcement of any right or
remedy under this Indenture, or in any suit, action or proceeding against the
Trustee for any action taken or omitted by it as Trustee hereunder, the filing
by any party litigant in such suit, action or proceeding of an undertaking to
pay the costs of such suit, action or proceeding, and that such court may, in
its discretion, assess costs, including reasonable attorneys' fees, against any
party litigant in such suit, action or proceeding, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
PROVIDED, HOWEVER, that the provisions of this Section 9.9 regarding such
agreement by the parties to this Indenture and each Bondholder shall not apply
to (a) any suit, action or proceeding instituted by the Trustee, (b) any suit,
action or proceeding instituted by any Bondholder or group of Bondholders
holding in the aggregate more than 10% in aggregate principal amount of the
Outstanding Bonds or (c) any suit, action or proceeding instituted by any
Bondholder for the enforcement of the payment of the principal of, or premium,
if any, or interest on, any of the Bonds, on or after the respective due dates
expressed therein.
SECTION 9.10 RIGHT OF BONDHOLDERS TO RECEIVE PAYMENT NOT TO BE IMPAIRED.
Anything in this Indenture to the contrary notwithstanding, the right of
any Bondholder to receive payment of the principal of, and premium, if any, and
interest on, such Bond, on or after the respective due dates expressed in such
Bond (or, in case of redemption, on the Redemption Date fixed for such Bond), or
to institute suit for the enforcement of any such payment on or
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after such respective dates, shall not be impaired or affected without the
consent of such Bondholder.
SECTION 9.11 APPLICATION OF FUNDS COLLECTED BY TRUSTEE.
Any money collected or to be applied by the Trustee pursuant to this
Article IX in respect of the Bonds of a series, together with any other funds
which may then be held by the Trustee under any of the provisions of this
Indenture as security for the Bonds of such series (other than funds at the time
required to be held for the payment of specific Bonds of such series at their
Stated Maturities or at a time fixed for the redemption thereof) shall be
applied in the following order from time to time, on the date or dates fixed by
the Trustee and, in the case of a distribution of such funds on account of
principal, premium, if any, or interest, upon presentation of the Outstanding
Bonds of such series, and stamping thereon of payment, if only partially paid,
and upon surrender thereof, if fully paid:
FIRST, to the payment of all Trustee Claims and to the payment of all
taxes, assessments or liens prior to the Lien of the Security Documents,
except those subject to which any sale shall have been made, all costs and
expenses of collection, including the costs and expenses of handling the
Collateral and of any sale thereof pursuant to the provisions of the
Security Documents;
SECOND, in case the unpaid principal amount of the indebtedness of the
Company under any of the Outstanding Bonds shall not have become due, to
the payment of any interest in default, in the order of the maturity of the
payments thereof, with interest at the rates specified in the respective
Bonds of each series in respect of overdue payments (to the extent that
payment of such interest shall be legally enforceable) on the payments of
interest then overdue;
THIRD, in case the unpaid principal amount of a portion of the
indebtedness of the Company under any of but not all the Outstanding Bonds
shall have become due, first to the payment of accrued interest on such
indebtedness under such Outstanding Bonds in the order of the maturity of
the payments thereof, with interest at the respective rates specified in
the Bonds of each series for overdue payments of principal, premium, if
any, and (to the extent that payment of such interest shall be legally
enforceable) interest then overdue, and next to the payment of the unpaid
principal amount of all Bonds then due; and
FOURTH, in case the unpaid principal amount of all the indebtedness of
the Company under all the Outstanding Bonds shall have become due, to the
payment of the whole amount then due and unpaid upon such indebtedness
under the Outstanding Bonds for principal, premium, if any, and interest,
together with interest at the respective rates specified in each series of
the Bonds for overdue payments on principal, premium, if any, and (to the
extent that payment of such interest shall be legally enforceable) interest
then overdue;
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PROVIDED, HOWEVER, that all payments in respect of the Bonds of a series to be
made pursuant to clauses "second" through "fourth" of this Section 9.11 shall be
made ratably to the Bondholders of such series entitled thereto, without
discrimination or preference, based upon the ratio of the unpaid principal
amount of the Bonds of such series in respect of which such payments are to be
made held by each such Bondholder to the unpaid principal amount of all Bonds of
such series.
SECTION 9.12 BONDS HELD BY CERTAIN PERSONS NOT TO SHARE IN DISTRIBUTION.
Any Bonds known to a Responsible Officer of the Trustee to be owned or held
by, or for the account or benefit of, the Company or an Affiliate thereof, shall
not be entitled to share in any payment or distribution provided for in this
Article IX until all Bonds held by other Persons have been indefeasibly paid in
full.
SECTION 9.13 WAIVER OF APPRAISEMENT, VALUATION, STAY, RIGHT TO MARSHALLING.
To the full extent it may lawfully do so, the Company, for itself and for
any other Person who may claim through or under it, hereby:
(a) agrees that neither it nor any such Person shall set up, plead, claim
or in any manner whatsoever take advantage of, any appraisal, valuation, stay,
extension or redemption laws, now or hereafter in force in any jurisdiction
which may delay, prevent or otherwise hinder (i) the performance or enforcement
or foreclosure of this Indenture, (ii) the sale of any of the Indenture
Collateral or (iii) the putting of the purchaser or purchasers thereof into
possession of such Indenture Collateral immediately after the sale thereof;
(b) waives all benefit or advantage of any such laws;
(c) consents and agrees that the Indenture Collateral may be sold as an
entirety or in parts by the Trustee as directed by the Bondholders of a majority
in principal amount of all Outstanding Bonds; and
(d) waives and releases all rights to have the Indenture Collateral
marshaled upon any foreclosure, sale or other enforcement of this Indenture.
SECTION 9.14 REMEDIES CUMULATIVE, DELAY OR OMISSION NOT A WAIVER.
Each and every right, power and remedy herein specifically given to the
Trustee shall be cumulative and shall be in addition to every other right, power
and remedy herein specifically given or now or hereafter existing at law, in
equity or by statute, and each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised from time to
time and as often and in such order as may be deemed expedient by the Trustee
and the exercise or the beginning of the exercise of any right, power or remedy
shall not be construed to be a waiver of the right to exercise at the same time
or thereafter any other right, power or remedy, and no delay or omission by the
Trustee in the exercise of any right, power or remedy or in the pursuance of any
remedy shall impair any such right, power or remedy or be construed to be a
waiver of any default on the part of the Company or to be an acquiescence
therein.
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SECTION 9.15 THE COLLATERAL AGENCY AGREEMENT.
Simultaneously with the execution and delivery of this Indenture, the
Trustee shall enter into the Collateral Agency Agreement. Notwithstanding any
other provision of this Indenture (other than the provisions of Sections 9.10
and 12.2) to the contrary, all rights and remedies available to the Bondholders,
and all future holders of any of the Bonds, or the Trustee with respect to the
Collateral, or otherwise pursuant to the Security Documents, shall be subject to
the Collateral Agency Agreement including, in all cases, the ability to enforce
any remedy and the limitations on the Trustee's ability to vote the interests
represented by the Outstanding Bonds. In respect of matters voted on by the
Senior Parties collectively, the Trustee shall vote all Bonds according to the
votes of a majority of Bondholders voting.
SECTION 9.16 AFFILIATE CURE RIGHTS.
Any Affiliate of the Company, at its option, shall have the right (but not
the obligation) to cure any Events of Default for which cures are available.
ARTICLE X
THE TRUSTEE
SECTION 10.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provisions
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own grossly negligent action, its own grossly
negligent failure to act, or its own willful misconduct, except that:
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(i) this subsection shall not be construed to limit the effect of
subsection (a) of this Section 10.1;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer of the Trustee, unless it shall be
proved that the Trustee was grossly negligent in ascertaining the pertinent
facts;
(iii) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Bondholders of not less than a majority in aggregate principal
amount of the Outstanding Bonds relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture; and
(iv) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers.
(d) Whether or not herein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section
10.1.
SECTION 10.2 NOTICE OF DEFAULTS.
In addition to its obligation to give notice to Bondholders as provided in
Section 1.6, as promptly as practicable after, and in any event within 90 days
after, the occurrence of any Default hereunder, the Trustee shall transmit by
mail to all Bondholders, as their names and addresses appear in the Security
Register, notice of such Default hereunder actually known to a Responsible
Officer of the Trustee, unless such Default shall have been cured or waived;
PROVIDED, HOWEVER, that, except in the case of a Default in the payment of the
principal of, or premium, if any, or interest on any Bond, the Trustee shall be
protected in withholding such notice if and so long as a trust committee of
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interests of the Bondholders.
SECTION 10.3 CERTAIN RIGHTS OF TRUSTEE.
Except as otherwise provided in Section 10.1:
(a) the Trustee may conclusively rely and shall be protected in acting or
refraining from acting in reliance upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper or document believed by it to be genuine and to have
been signed or presented by the purported proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Company may be sufficiently evidenced by a Board Resolution of the
Company;
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(c) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officer's Certificate of the Company and/or, where required herein, an
opinion of counsel;
(d) the Trustee may consult with counsel of its selection and the advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Bondholders pursuant to this Indenture, unless such Bondholders shall have
offered to the Trustee adequate security or indemnity (as determined by the
Trustee in its reasonable discretion) against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company personally or by agent or attorney;
(g) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) The Trustee shall not be charged with knowledge of any Event of Default
unless either (i) a Responsible Officer of the Trustee shall have actual
knowledge of such Event of Default or (ii) written notice of such Event of
Default shall have been given to the Trustee by the Company or by any Bondholder
pursuant to Section 1.5(a).
SECTION 10.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF BONDS.
The recitals contained herein and in the Bonds, except the certificates of
authentication, shall not be taken as the statements of the Trustee, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture, the
Indenture Collateral or the Bonds, except that the Trustee hereby represents and
warrants that this Indenture has been executed and delivered by one of its
officers who is duly authorized to execute and deliver such document on its
behalf. The Trustee shall not be accountable for the use or application by the
Company of the Bonds or the proceeds thereof.
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SECTION 10.5 MAY HOLD BONDS.
The Trustee, any Paying Agent, Security Registrar, any Authenticating Agent
or any Affiliate thereof, in its individual or any other capacity, may become
the owner or pledgee of Bonds and, subject to Sections 10.8 and 10.13, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Paying Agent, Security Registrar, Authenticating Agent or such
other agent.
SECTION 10.6 FUNDS MAY BE HELD BY TRUSTEE OR PAYING AGENT; INVESTMENTS.
(a) Subject to subsection (b) of this Section 10.6, any funds held by the
Trustee or the Paying Agent hereunder as part of the Indenture Collateral may,
until paid out by the Trustee or the Paying Agent as herein provided, be carried
by the Trustee or the Paying Agent on deposit with itself, and neither the
Trustee nor the Paying Agent shall have any liability for interest upon any such
funds.
(b) At any time and from time to time prior to the application by the
Trustee of any funds to the redemption of Bonds pursuant to Article VII, if at
the time no Event of Default has occurred and is continuing, the Trustee (i)
shall, on Company Request, invest and reinvest funds at the time on deposit with
the Trustee as part of the Indenture Collateral, together with any income and
gains from the investment and reinvestment thereof, in Permitted Investments as
specified in such Company Request and (ii) shall, in the absence of a Company
Request, invest and reinvest any such funds in Permitted Investments of the sort
described in clause (i) of the definition thereof. Such Permitted Investments
shall be held by the Trustee until so sold in trust as part of the Indenture
Collateral. In the case of clause (i) above, the Trustee shall sell any
Permitted Investment at such prices, including accrued interest, as are set
forth in such Company Request and, in the case of clause (ii) above, the Trustee
may sell any Permitted Investments at such prices, including accrued interest,
as the Trustee shall in its sole discretion determine. The Trustee shall, on
Company Request, sell such Permitted Investments as may be specified therein,
and the Trustee shall, without Company Request, in the event funds are required
for payment of any amounts to be paid by the Trustee pursuant to Article VII in
respect of any series of Bonds and for any payment of the principal of, premium,
if any, or interest on any series of Bonds, sell such Permitted Investments as
are required to restore to cash as part of the Indenture Collateral such amounts
as are needed for any such payments. The Trustee shall not be responsible for
any losses on any investments or sales of Permitted Investments made pursuant to
the procedure specified in this subsection 10.6(b).
SECTION 10.7 COMPENSATION, REIMBURSEMENT AND INDEMNIFICATION.
The Company agrees:
(a) to pay, or cause to be paid, to each of the Trustee and any Authorized
Agent from time to time such compensation for all services rendered by it
hereunder as the parties shall agree from time to time in writing (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
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(b) to reimburse, or cause to be reimbursed, each of the Trustee and any
Authorized Agent upon its request for all expenses, disbursements and advances
incurred or made by it in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance as may be
attributable of its own gross negligence, willful misconduct or bad faith; and
(c) to indemnify, or cause to be indemnified, each of the Trustee, any
predecessor Trustee and any Authorized Agent for, and to hold it harmless
against, any loss, liability or expense incurred without gross negligence, or
willful misconduct or bad faith on its part, arising out of or in connection
with the acceptance or administration of this trust or the performance of its
duties hereunder, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
As security for the performance of the obligations of the Company under
this Section 10.7, the Trustee shall have a lien prior to the Bonds upon all
property and funds held or collected by the Trustee as such, except funds held
in trust under Section 13.3. The provisions of this Section shall survive the
termination of this Indenture or the resignation or removal of the Trustee.
SECTION 10.8 DISQUALIFICATION; CONFLICTING INTERESTS.
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section 10.8, then, within 90 days after ascertaining that it
has such conflicting interest, and if the default (for purposes of this Section
10.8, a default means a default in payment of principal which shall have
continued for thirty days or more and shall not have been cured) to which such
conflicting interest relates has not been cured or duly waived or otherwise
eliminated before the end of such 90 day period, it shall resign in the manner
and with the effect hereinafter specified in this Article X;
(b) If the Trustee shall fail to comply with the provisions of subsection
(a) of this Section 10.8, the Trustee shall, within 10 days after the expiration
of such 90-day period, transmit by mail to all Bondholders, as their names and
addresses appear in the Security Register, notice of such failure.
(c) For the purposes of this Section 10.8, the Trustee shall be deemed to
have a conflicting interest if the Bonds are in default and:
(i) the Trustee is trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of any obligor on the Bonds are outstanding unless (A) the
Bonds are collateral trust notes under which the only collateral consists
of securities issued under such other indenture, (B) such other indenture
is a collateral trust indenture under which the only collateral consists of
Bonds issued under this Indenture or (C) such obligor has no substantial
unmortgaged assets and is engaged primarily in the business of owning, or
of owning and developing and/or operating, real estate, and this Indenture
and such other indenture are secured by wholly
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separate and distinct parcels of real estate; PROVIDED, that there shall be
excluded from the operation of this paragraph other series under this
Indenture;
(ii) the Trustee or any of its directors or executive officers is an
underwriter for an obligor on the Bonds;
(iii) the Trustee directly or indirectly controls, is directly or
indirectly controlled by or is under direct or indirect common control with
an underwriter for an obligor on the Bonds;
(iv) the Trustee or any of its directors or executive officers is a
director, officer, partner, employee, appointee or representative of any
obligor on the Bonds or of an underwriter (other than the Trustee itself)
for such obligor who is currently engaged in the business of underwriting,
except that (A) one individual may be a director or an executive officer,
or both, of the Trustee and a director or an executive officer, or both, of
an obligor on the Bonds but may not be at the same time an executive
officer of both the Trustee and such obligor; (B) if and so long as the
number of directors of the Trustee in office is more than nine, one
additional individual may be director or an executive officer, or both, of
the Trustee and a director of an obligor on the Bonds; and (C) the Trustee
may be designated by an obligor on the Bonds or by any underwriter for such
obligor to act in the capacity of transfer agent, registrar, custodian,
paying agent, fiscal agent, escrow agent, or depositary, or in any other
similar capacity, or subject to the provisions of paragraph (i) of this
subsection, to act as trustee, whether under an indenture or otherwise;
(v) 10% or more of the voting securities of the Trustee is
beneficially owned either by any obligor on the Bonds or by any director,
partner, or executive officer thereof, or 20% or more of such voting
securities is beneficially owned, collectively, by any two or more of such
persons; or 10% or more of the voting securities of the Trustee is
beneficially owned either by an underwriter for any obligor on the Bonds or
by any director, partner or executive officer thereof, or is beneficially
owned collectively by any two or more such persons;
(vi) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default, (A) 5% or more of the
voting securities, or 10% or more of any other class of security, of any
obligor on the Bonds not including the Bonds issued under this Indenture
and securities issued under any other indenture under which the Trustee is
also trustee, or (B) 10% or more of any class of security of an underwriter
for any obligor on the Bonds;
(vii) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default, 5% or more of the voting
securities of any person who, to the knowledge of the Trustee, owns 10% or
more of the voting securities of, or controls directly or indirectly or is
under direct or indirect common control with, any obligor on the Bonds;
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(viii) the Trustee is the beneficial owner of, or holds collateral
security for an obligation which is in default, 10% or more of any class of
security of any person who, to the knowledge of the Trustee, owns 50% or
more of the voting securities of any obligor on the Bonds;
(ix) the Trustee owns, on the date of default upon the Bonds or any
anniversary of such default while such default upon the Bonds remains
outstanding, in the capacity of executor, administrator, testamentary or
inter vivos trustee, guardian, committee or conservator, or in any other
similar capacity, an aggregate of 25% or more of the voting securities, or
of any class of security, of any person, the beneficial ownership of a
specified percentage of which would have constituted a conflicting interest
under paragraphs (vi), (vii) or (viii) of this subsection. As to any such
securities of which the Trustee acquired ownership through becoming
executor, administrator, or testamentary trustee of an estate which
included such securities, the provisions of the immediately preceding
sentence shall not apply for a period of not more than two years from the
date of such acquisition to the extent that such securities included in
such estate do not exceed 25% of such voting securities or 25% of any such
class of security. Promptly after the dates of any such default upon the
Bonds and annually in each succeeding year that the Bonds remain in
default, the Trustee shall make a check of its holdings of such securities
in any of the above-mentioned capacities as of such dates. If any obligor
on the Bonds fails to make payment in full of the principal of, or the
premium, if any, or interest on, any of the Bonds when and as the same
becomes due and payable and such failure continues for 30 days thereafter,
the Trustee shall make a prompt check of its holdings of such securities in
any of the above-mentioned capacities as of the date of the expiration of
such 30-day period, and after such date, notwithstanding the foregoing
provisions of this paragraph, all such securities so held by the Trustee,
with sole or joint control over such securities vested in it, shall be
considered as though beneficially owned by the Trustee for the purposes of
paragraphs (vi), (vii) and (viii) of this subsection; or
(x) except under the circumstances described in Section 10.13(b) (i),
(iii), (iv), (v) or (vi), the Trustee shall be or shall become a creditor
of the obligor.
For the purposes of paragraph (i) of this subsection, the term "series of
securities" or "securities" means a series, class or group of Bonds issuable
under this Indenture pursuant to whose terms Bondholders of one such series may
vote to direct the Trustee, or otherwise take action pursuant to a vote of such
Bondholders, separately from Bondholders of another such series; PROVIDED, that
"series of securities" or "series" shall not include any series of Bonds
issuable under this Indenture if all such series rank equally and are wholly
unsecured.
The specification of percentages in paragraphs (v) to (ix) inclusive, of
this subsection, shall not be construed as indicating that the ownership of such
percentages of the securities of a person is or is not necessary or sufficient
to constitute direct or indirect control for the purposes of paragraph (iii) or
(vii) of this subsection.
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For the purposes of paragraphs (vi), (vii), (viii) and (ix) of this
subsection only, (A) the terms "security" and "securities" shall include only
such securities as are generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to evidence an
obligation to repay funds loaned to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness, and (B) the Trustee shall not be
deemed to be the owner or Bondholder of (1) any security that it holds as
collateral security, as trustee or otherwise, for an obligation which is not in
default, or (2) any security which it holds as collateral security under this
Indenture, irrespective of any default hereunder, or (3) any security that it
holds as agent for collection, or as custodian, escrow agent, or depositary, or
in any similar representative capacity.
Except as provided in the next preceding paragraph, the word "security" or
"securities" as used in this Indenture means any note, stock, treasury stock,
bond, debenture, evidence of indebtedness, certificate of interest or
participation in any profit-sharing agreement, collateral trust certificate,
preorganization certificate or subscription, transferable share, investment
contract, voting trust certificate, certificate of deposit for security,
fractional undivided interest in oil, gas, or other mineral rights, any put,
call, straddle, option or privilege on any security, certificate of deposit, or
group or index of securities (including, any interest therein or based on the
value thereon) or any put, call, straddle, option or privilege entered into on a
national securities exchange relating to foreign currency, or, in general, any
interest or instrument commonly known as a "security," or any certificate or
interest or participation in, temporary or interim certificate for, receipt for,
guarantee of, or warrant or right to subscribe to purchase, any of the
foregoing.
(d) For the purposes of this Section only:
(i) The term "underwriter" when used with reference to any obligor on
the Bonds, means every person who, within one year prior to the time as of
which the determination is made, has purchased from such obligor with a
view to, or has offered or sold for such obligor in connection with, the
distribution of any security of such obligor outstanding at such time, or
has participated or has had a direct or indirect participation in any such
undertaking, or has participated or has had a participation in the direct
or indirect underwriting of any such undertaking; but such term shall not
include a person whose interest was limited to a commission from an
underwriter or dealer not in excess of the usual and customary
distributors' or sellers' commission.
(ii) The term "director" means any director of a corporation, or any
individual performing similar functions with respect to any organization
whether incorporated or unincorporated.
(iii) The term "person" means an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an
unincorporated organization, or a government or political subdivision
thereof. As used in this paragraph, the term "trust" shall include only a
trust where the interest or interests of the beneficiary or beneficiaries
are evidenced by a security.
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(iv) The term "voting security" means any security presently entitling
the owner or holder thereof to vote in the direction or management of the
affairs of a person, or any security issued under or pursuant to any trust,
agreement or arrangement whereby a trustee or trustees or agent or agents
for the owner or holder of such security are presently entitled to vote in
the direction or management of the affairs of a person.
(v) The term "obligor" means the Company and any other person
(including any guarantor) who is liable on the Bonds .
(vi) The term "executive officer" means the president, every vice
president, every trust officer, the cashier, the secretary, and the
treasurer of a corporation, and any individual customarily performing
similar functions with respect to any organization whether incorporated or
unincorporated, but shall not include the chairman of the board of
directors.
(e) The percentage of the voting securities and other securities specified
in this Section shall be calculated in accordance with the following provisions:
(i) A specified percentage of the voting securities of the Trustee,
any obligor or any other person referred to in this Section 10.8 (each of
whom is referred to as a "person" in this paragraph) means such amount of
the outstanding voting securities of such person as entitles the holder or
holders thereof to cast such specified percentage of the aggregate votes
which the holders of all the outstanding voting securities of such person
are entitled to cast in the direction or management of the affairs of such
person.
(ii) A specified percentage of a class of securities of a person means
such percentage of the aggregate amount of securities of the class
outstanding.
(iii) The term "amount," when used in regard to securities, means the
principal amount if relating to evidences of indebtedness, the number of
shares if relating to capital shares and the number of units if relating to
any other kind of security.
(iv) The term "outstanding" as used in this Section 10.8 means issued
and not held by or for the account of the issuer. The following securities
shall not be deemed outstanding within the meaning of this definition:
(A) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
(B) securities of an issuer held in a sinking fund relating to
another class of securities of the issuer, if the obligation evidenced
by such other class of securities is not in default as to principal or
interest or otherwise;
(C) securities pledged by the issuer thereof as security for an
obligation of the issuer not in default as to principal or interest or
otherwise; and
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(D) securities held in escrow if placed in escrow by the issuer
thereof;
PROVIDED, HOWEVER, that any voting securities of an issuer shall be deemed
outstanding if any person other than the issuer is entitled to exercise the
voting rights thereof.
(v) A security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders substantially
the same rights and privileges; PROVIDED, HOWEVER, that in the case of
secured evidences of indebtedness, all of which are issued under a single
indenture, differences in the interest rates or maturity dates of various
series thereof shall not be deemed sufficient to constitute such series
different classes; and provided, further, that, in the case of unsecured
evidences of indebtedness, differences in the interest rates or maturity
dates thereof shall not be deemed sufficient to constitute them securities
of different classes, whether or not they are issued under a single
indenture.
(f) The Trustee shall prepare and transmit to the Bondholders all reports
required by Section 313 of the Trust Indenture Act of 1939, as amended.
SECTION 10.9 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder that shall be a corporation
or bank organized and doing business under the laws of the United States or of
any State thereof, authorized under such laws to exercise corporate trust
powers, having (or whose obligations are unconditionally guaranteed by a
corporation or bank having) a combined capital and surplus of at least
$150,000,000, and subject to supervision or examination by Federal or state
authority. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 10.9, the combined capital and
surplus of such corporation or bank shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 10.9, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article X.
SECTION 10.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article X shall become effective until the
acceptance of appointment by the successor Trustee under Section 10.11.
(b) The Trustee may resign at any time by giving written notice thereof to
the Company. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Company and the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction at the expense of the Company for the
appointment of a successor Trustee, or any Bondholder who has been a bona fide
Bondholder for at least 6 months may, subject to Section 10.9, on behalf of
himself and all others similarly situated, petition any such court for the
appointment of a successor Trustee.
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(c) The Trustee may be removed at any time by Act of the Bondholders of not
less than a majority in principal amount of the Outstanding Bonds, delivered to
the Trustee and the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 10.8(a) after
written request therefor by any Bondholder who has been a bona fide
Bondholder for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 10.9 and
shall fail to resign after written request therefor by any such Bondholder
or the Company, or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or
(iv) the Trustee shall fail to carry out its obligations under this
Indenture in a timely manner and the Company shall have petitioned a court
of competent jurisdiction to order the Trustee to carry out such
obligations.
then, in any such case, (i) the Company may remove the Trustee by Board
Resolution or (ii) subject to Section 9.9, any Bondholder who has been a bona
fide Bondholder for at least six (6) months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company
shall promptly appoint by Board Resolution a successor Trustee. If no successor
Trustee shall have been so appointed by the Company or by the Bondholders, and
accepted appointment in the manner hereinafter provided, any Bondholder who has
been a bona fide Bondholder for at least six (6) months may, subject to Section
9.9, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to the Bondholders as
their names and addresses appear in the Security Register. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
SECTION 10.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such
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successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee
but, on request of the Company or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument prepared
by the Company transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee, and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder, subject nevertheless to its lien, if any, provided for in Section
10.7. Such transfer shall not effect or impair any indemnification rights of the
retiring Trustee. Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article X.
SECTION 10.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation or bank into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation or bank resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation or bank succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation or bank shall be otherwise qualified and
eligible under this Article X, without the execution or filing of any paper or
any further act on the part of any of the parties hereto. In case any Bonds
shall have been authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Bonds so authenticated
with the same effect as if such successor Trustee had itself authenticated such
Bonds.
SECTION 10.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ANY OBLIGOR.
(a) Subject to subsection (b) of this Section 10.13, if the Trustee shall
be or shall become a creditor, directly or indirectly, secured or unsecured, of
any obligor (as defined in subsection (c) of this Section) on the Bonds within
three months prior to a default (as defined in subsection (c) of this Section)
or subsequent to such a default, then, unless and until such default shall be
cured, the Trustee shall set apart and hold in a special account for the benefit
of the Trustee individually and the Bondholders:
(i) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such three month period and valid as
against any obligor on the Bonds and its other creditors, except any such
reduction resulting from the receipt or disposition of any property
described in paragraph (ii) of this subsection, or from the exercise of any
right of set-off that the Trustee could have exercised if a petition in
bankruptcy had been filed by or against any such obligor upon the date of
such default; and
(ii) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise,
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after the beginning of such three month period, or an amount equal to the
proceeds of any such property, if disposed of, subject, however, to the
rights, if any, of any obligor on the Bonds and its other creditors in such
property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (1) payments made on account of
any such claim by any Person (other than an obligor on the Bonds) who
is liable thereon, and (2) the proceeds of the bona fide sale of any
such claim by the Trustee to a third person, and (3) distributions
made in cash, securities or other property in respect of claims filed
against such obligor in bankruptcy or receivership or in proceedings
for reorganization pursuant to the Bankruptcy Code or applicable state
law;
(B) to realize, for its own account, upon any property held by it
as security for any such claim, if such property was so held prior to
the beginning of such three month period;
(C) to realize, for its own account, but only to the extent of
the claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was created after the
beginning of such three month period and such property was received as
security therefor simultaneously with the creation thereof, and if the
Trustee shall sustain the burden of proving that at the time such
property was so received the Trustee had no reasonable cause to
believe that a default (as defined in subsection (c) of this Section
10.13) would occur within three months; or
(D) to receive payment on any claim referred to in clause (B) or
(C) above, against the release of any property held as security for
such claim as provided in clause (B) or (C), as the case may be, to
the extent of the fair value of such property.
For the purposes of clauses (B), (C) and (D) of the immediately preceding
paragraph, property substituted after the beginning of such three month period
for property held as security at the time of such substitution shall, to the
extent of the fair value of the property released, have the same status as the
property released, and, to the extent that any claim referred to in any of such
clauses is created in renewal of or in substitution for or for the purpose of
repaying or refunding any pre-existing claim of the Trustee as such creditor,
such claim shall have the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property held in
such special account and the proceeds thereof shall be apportioned between the
Trustee and the Bondholders in such manner that the Trustee and the Bondholders
realize, as a result of payments from such special account and payments of
dividends on claims filed against the obligor on the Bonds in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Bankruptcy
Code or applicable state law, the same percentage of their respective claims,
figured before crediting to
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the claim of the Trustee anything on account of the receipt by it from such
obligor of the funds and property in such special account and before crediting
to the respective claims of the Trustee and the Bondholders dividends on claims
filed against such obligor in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Bankruptcy Code or applicable state law, but
after crediting thereon receipts on account of the indebtedness represented by
their respective claims from all sources other than from such dividends and from
the funds and property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividends" shall include any
distribution with respect to such claim, in bankruptcy or receivership or
proceedings for reorganization pursuant to the Bankruptcy Code or applicable
state law, whether such distribution is made in cash, securities, or other
property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such bankruptcy,
receivership or proceedings for reorganization is pending shall have
jurisdiction (i) to apportion between the Trustee and the Bondholders in
accordance with the provisions of this paragraph, the funds and property held in
such special account and proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of this paragraph
due consideration in determining the fairness of the distributions to be made to
the Trustee and the Bondholders with respect to their respective claims, in
which event it shall not be necessary to liquidate or to appraise the value of
any securities or other property held in such special account or as security for
any such claim, or to make a specific allocation of such distributions as
between the secured and unsecured portions of such claims, or otherwise to apply
the provisions of this paragraph as a mathematical formula.
Any Trustee that has resigned or been removed after the beginning of such
three month period shall be subject to the provisions of this subsection as
though such resignation or removal had not occurred. If any Trustee has resigned
or been removed prior to the beginning of such three month period, it shall be
subject to the provisions of this subsection if and only if the following
conditions exist: (i) the receipt of property or reduction of claim, which would
have given rise to the obligation to account if such Trustee had continued as
Trustee, occurred after the beginning of such three month period; and (ii) such
receipt of property or reduction of claim occurred within three months after
such resignation or removal.
(b) There shall be excluded from the operation of subsection (a) of this
Section 10.13 a creditor relationship arising from:
(i) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(ii) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of preserving
the property that shall at any time be subject to the Lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advances and of the circumstances surrounding
the making thereof is given to the Bondholders at the time and in the
manner provided in this Indenture;
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(iii) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(iv) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction (as defined in subsection (c) of this
Section 10.13);
(v) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve Act,
as amended, that is directly or indirectly a creditor of an obligor upon
the securities; or
(vi) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper (as defined in subsection (c) of
this Section 10.13).
(c) For the purposes of this Section 10.13 only:
(i) The term "default" means any failure to make payment in full of
the principal of or interest on any of the Bonds when and as such principal
or interest becomes due and payable;
(ii) The term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand;
(iii) The term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by any obligor on the Bonds for the purpose of financing the
purchase, processing, manufacturing, shipment, storage or sale of goods,
wares or merchandise and which is secured by documents evidencing title to,
possession of or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with such obligor arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation; and
(iv) The term "obligor" means the Company and any other person
(including any guarantor) who is liable on the Bonds.
SECTION 10.14 MAINTENANCE OF OFFICES AND AGENCIES.
(a) There shall at all times be maintained, as shall be specified for the
Bonds of any series in the related Series Supplemental Indenture, an office or
agency where Bonds may be presented or surrendered for registration of transfer
or exchange and for payment of principal,
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premium, if any, and interest, and where notices and demands to or upon the
Trustee in respect of the Bonds or this Indenture may be served. Such office or
agency shall be initially at the Corporate Trust Office. Written notice of the
location of each of such other office or agency and of any change of location
thereof shall be given by the Company to the Trustee and by the Trustee to the
Bondholders in the manner specified in Section 1.6. If no such office or agency
shall be maintained or no such notice of location or of change of location shall
be given, presentations, surrenders and demands may be made and notices may be
served at the Corporate Trust Office.
(b) There shall at all times be a Security Registrar and a Paying Agent
("PAYING AGENT") hereunder. In addition, at any time when any Bonds remain
Outstanding, the Trustee may appoint an Authenticating Agent or Agents with
respect to the Bonds of one or more series which shall be authorized to act on
behalf of the Trustee to authenticate Bonds of such series issued upon original
issuance, exchange, registration of transfer or partial redemption thereof or
pursuant to Section 2.9, and Bonds so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee hereunder (it being understood that wherever
reference is made in this Indenture to the authentication and delivery of Bonds
by the Trustee or the Trustee's certificate of authentication, such reference
shall be deemed to include authentication and delivery on behalf of the Trustee
by an Authenticating Agent and a certificate of authentication executed on
behalf of the Trustee by an Authenticating Agent). If an appointment of an
Authenticating Agent with respect to the Bonds of one or more series shall be
made pursuant to this Subsection 10.14(b), the Bonds of such series may have
endorsed thereon, in addition to the Trustee's certificate of authentication, an
alternate certificate of authentication in the following form:
This Bond is one of the Bonds referred to in the within-mentioned
Indenture.
[------------------------------------------]
as Trustee
By:
------------------------------------------
Authenticating Agent
By:
------------------------------------------
Authorized Signatory
Any Authorized Agent shall be a bank or trust company, shall be a
corporation or bank organized and doing business under the laws of the United
States or any State thereof, having a combined capital and surplus of at least
$50,000,000, and shall be authorized under such laws to exercise corporate trust
powers, subject to supervision by Federal or State authorities. If such
Authorized Agent publishes reports of its condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 10.14, the combined capital and
surplus of such Authorized Agent shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If
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at any time an Authorized Agent shall cease to be eligible in accordance with
the provisions of this Section 10.14, such Authorized Agent shall resign
immediately in the manner and with the effect specified in this Section 10.14.
The Trustee at its office specified in the first paragraph of this Indenture, is
hereby appointed as Paying Agent and Security Registrar hereunder.
(c) Any Paying Agent (other than the Trustee) from time to time appointed
hereunder shall execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section 10.14, that such Paying Agent will:
(i) hold all sums held by it for the payment of principal of, and
premium, if any, and interest on the Bonds in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(ii) give the Trustee within five days thereafter notice of any
default by any obligor upon the Bonds in the making of any such payment of
principal, premium, if any, or interest; and
(iii) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
Notwithstanding any other provision of this Indenture, any payment required to
be made to or received or held by the Trustee may, to the extent authorized by
written instructions of the Trustee, be made to or received or held by a Paying
Agent in the City of New York, County of New York, for the account of the
Trustee.
(d) Any corporation or bank into which any Authorized Agent may be merged
or converted or with which it may be consolidated, or any corporation or bank
resulting from any merger, consolidation or conversion to which any Authorized
Agent shall be a party, or any corporation or bank succeeding to the corporate
trust business of any Authorized Agent, shall be the successor of such
Authorized Agent hereunder, if such successor corporation or bank is otherwise
eligible under this Section 10.14, without the execution or filing of any paper
or any further act on the part of the parties hereto or such Authorized Agent or
such successor corporation or bank.
(e) Any Authorized Agent may at any time resign by giving written notice of
resignation to the Trustee and the Company. The Company may, and at the request
of the Trustee shall, at any time, terminate the agency of any Authorized Agent
by giving written notice of termination to such Authorized Agent and to the
Trustee. Upon the resignation or termination of an Authorized Agent or in case
at any time any such Authorized Agent shall cease to be eligible under this
Section 10.14 (when, in either case, no other Authorized Agent performing the
functions of such Authorized Agent shall have been appointed), the Company shall
promptly appoint one or more qualified successor Authorized Agents approved by
the Trustee to perform the functions of the Authorized Agent which has resigned
or whose agency has been terminated or who shall have ceased to be eligible
under this Section 10.14. The Company shall give written
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notice of any such appointment to all Bondholders as their names and addresses
appear on the Security Register.
SECTION 10.15 CO-TRUSTEE OR SEPARATE TRUSTEE.
(a) If at any time or times it shall be necessary or prudent in order to
conform to any law of any jurisdiction in which property shall be held subject
to the Lien of this Indenture, or the Trustee determines or shall be advised by
counsel satisfactory to it that it is so necessary or prudent in the interest of
the Bondholders or the Trustee, or the Bondholders of a majority in principal
amount of Outstanding Bonds shall in writing so request, the Trustee and the
Company shall execute and deliver all instruments and agreements necessary or
proper to constitute another bank or trust company or one or more Persons
approved by the Trustee either to act as co-trustee or co-trustees of all or any
part of the Indenture Collateral jointly with the Trustee originally named
herein or any successor or successors, or to act as separate trustee or trustees
of all or any such property. Any co-trustee or separate trustee so appointed
shall be entitled to all rights and benefits granted to the Trustee under this
Indenture, including without limitation, Sections 10.3 and 10.7. In the event
the Company shall have not joined in the execution of such instruments and
agreements within 10 days after the receipt of a written request from the
Trustee so to do, or in case an Event of Default with respect to the Bonds of a
series shall have occurred and be continuing, the Trustee may act under the
foregoing provisions of this Section 10.15 without the concurrence of the
Company; and the Company hereby appoints the Trustee as agent and attorney to
act under the foregoing provisions of this Section 10.15 in either of such
contingencies.
(b) Every additional trustee hereunder shall, to the extent permitted by
law, be appointed and act, and such additional trustee and its successors shall
act, subject to the following provisions and conditions, namely:
(i) the Bonds shall be authenticated and delivered, and all powers,
duties, obligations and rights conferred upon the Trustee in respect of the
custody, control and management of funds, papers or securities, shall be
exercised, solely by the Trustee (or, in the case of authentication and
delivery of Bonds, by any Authenticating Agent);
(ii) all rights, powers, duties and obligations conferred or imposed
upon the Trustee or the additional trustee or trustees shall be conferred
or imposed upon and exercised or performed by the Trustee or the Trustee
and such additional trustee or trustees jointly, except to the extent that
under any law of any jurisdiction in which any particular act or acts are
to be performed, the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations shall be exercised and performed by such additional trustee or
trustees;
(iii) no power given hereby to, or which it is provided hereby may be
exercised by, any such additional trustee or trustees, shall be exercised
hereunder by such additional trustee or trustees, except jointly with, or
with the consent in writing of, the Trustee, anything herein contained to
the contrary notwithstanding;
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(iv) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and
(v) the Company and the Trustee, at any time, by an instrument in
writing, executed by them jointly, may remove any such additional trustee,
and in that case, by an instrument in writing executed by them jointly, may
appoint a successor or successors to such additional trustee or trustees,
as the case may be, anything herein contained to the contrary
notwithstanding. If the Company shall not have joined in the execution of
any such instrument within 10 days after the receipt of a written request
from the Trustee to do so, the Trustee shall have the power to remove any
such additional trustee and to appoint a successor additional trustee
without the concurrence of the Company, the Company hereby appointing the
Trustee its agent and attorney to act for it in such connection in such
contingency. If the Trustee alone shall have appointed an additional
trustee or trustees or co-trustee or co-trustees as above provided, it may
at any time, by an instrument in writing, remove any such additional
trustee or co-trustee, the successor to any such trustee or co-trustee so
removed to be appointed by the Company and the Trustee, or by the Trustee
alone, as hereinbefore in this Section 10.15 provided.
SECTION 10.16 TAXES.
Any United States withholding taxes imposed with respect to payments made
to a Bondholder shall be the sole responsibility of such Bondholder and
therefore no Bondholder shall have the right to have any payment to it
"grossed-up" for, or paid free of, any such withholding taxes.
ARTICLE XI
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 11.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF BONDHOLDERS.
The Company shall furnish or cause to be furnished to the Trustee
quarterly, between January 15 and January 31, between April 15 and April 30,
between July 15 and July 31 and between October 15 and October 31, in each year,
and at such other times as the Trustee may request in writing, within 30 days
after receipt by the Company of any such request, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Bondholders,
in each case as of a date not more than 15 days prior to the time such list is
furnished; PROVIDED, HOWEVER, that so long as the Trustee is the sole Security
Registrar or is otherwise furnished a copy of the Security Register, no such
list need be furnished.
SECTION 11.2 PRESERVATION OF INFORMATION; COMMUNICATIONS TO BONDHOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Bondholders contained in the most recent
list furnished to the Trustee as
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provided in Section 11.1 and received by the Trustee in its capacity as Security
Registrar, if so acting. The Trustee may destroy any list furnished to it upon
receipt of a new list so furnished.
(b) If three or more Bondholders (for the purposes of this Section 11.2,
hereinafter referred to as the "applicants") apply in writing to the Trustee,
and furnish to the Trustee reasonable proof that each such applicant has owned a
Bond for a period of at least six months preceding the date of such application,
and such application states that the applicants desire to communicate with other
Bondholders with respect to their rights under this Indenture or under the Bonds
and is accompanied by a copy of the form of proxy or other communication which
such applicants propose to transmit, then the Trustee shall, within five
Business Days after the receipt of such application, at its election, either:
(i) afford such applicants access to the information preserved at the
time by the Trustee in accordance with Section 11.2(a), or
(ii) inform such applicants as to the approximate number of
Bondholders whose names and addresses appear in the information preserved
at the time by the Trustee in accordance with Section 11.2(a), and as to
the approximate cost of mailing to such Bondholders the form of proxy or
other communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Bondholder whose name and address appears in the information
preserved at the time by the Trustee in accordance with Section 11.2(a), a copy
of the form of proxy or other communication that is specified in such request,
with reasonable promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of mailing.
(c) Every Bondholder, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Bondholders in accordance with Section 11.2(b), regardless
of the source from which such information was derived.
ARTICLE XII
SUPPLEMENTAL INDENTURES
SECTION 12.1 SUPPLEMENTAL INDENTURES AND AMENDMENTS TO FINANCING DOCUMENTS
WITHOUT CONSENT OF BONDHOLDERS.
Without the consent of the Bondholders, the Company, and the Trustee, at
any time and from time to time, may enter into one or more indentures
supplemental hereto in form reasonably satisfactory to the Trustee and may amend
any of the other Financing Documents, for any of the following purposes:
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(a) to establish the form and terms of Bonds of any series permitted by
Sections 2.1 and 2.3; or
(b) to evidence the succession of another entity to the Company, and the
assumption by any such successor of the covenants of the Company herein and in
the Bonds contained; or
(c) to evidence the succession of a new Trustee hereunder or a co-trustee
or separate trustee pursuant to Section 10.15; or
(d) to add to the covenants of the Company, for the benefit of the
Bondholders, or to surrender any right or power herein conferred upon the
Company; or
(e) to convey, transfer and assign to the Trustee, and to subject to the
Lien of this Indenture, additional properties or assets, and to correct or
amplify the description of any property at any time subject to the Lien of this
Indenture or to assure, convey and confirm unto the Trustee any property subject
or required to be subject to the Lien of this Indenture; or
(f) to permit or facilitate the issuance of Bonds in uncertificated form;
or
(g) to change or eliminate any provision of this Indenture; PROVIDED,
HOWEVER, that if such change or elimination would adversely affect the interests
of the holders of any Bonds of any series, such change or elimination shall
become effective with respect to such series only when no Bond of such series
remains Outstanding; or
(h) to comply with changes in Applicable Law; PROVIDED, HOWEVER, that no
such amendment or supplement shall result in a Material Adverse Effect or
otherwise adversely affect the interests of the Holders of any Bonds of any
series in any material respect; or
(i) to make any changes required by S&P or Moody's or any other nationally
recognized securities rating agency as a condition to the issuance or
maintenance of the then current rating on the Bonds or any series thereof,
provided that any such change shall not result in a Material Adverse Effect or
otherwise adversely affect the interests of the Holders of any Bonds of any
series in any material respect; or
(j) to cure any ambiguity, to correct or supplement any provision herein
that may be defective or inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising under
this Indenture, provided such action shall not adversely affect the interest of
the Bondholders of any series in any material respect.
SECTION 12.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS.
With the consent of the Bondholders of not less than a majority in
aggregate principal amount of the Bonds of all series then Outstanding,
considered as one class, by Act of such Bondholders delivered to the Company and
the Trustee and the Company may, and the Trustee, subject to Section 12.3 and
12.4, shall, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the
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provisions of, this Indenture; PROVIDED, HOWEVER, that if there shall be Bonds
of more than one series Outstanding hereunder and if a proposed supplemental
indenture shall directly affect the rights of the Bondholders of one or more,
but less than all, of such series, then the consent only of the Bondholders of
not less than a majority in aggregate principal amount of the Outstanding Bonds
of all series so directly affected, considered as one class, shall be required;
PROVIDED, FURTHER, that no such supplemental indenture shall, without the
consent of the Bondholder of each Outstanding Bond directly affected thereby,
(a) change the Stated Maturity of any Bond (or, if the principal thereof is
payable in installments, the Stated Maturity of any such installment), or of any
payment of interest thereon, or the dates or circumstances of payment of
premium, if any, on, any Bond, or change the principal amount thereof or the
interest thereon or any premium payable upon the redemption thereof, or change
the place of payment where, or the coin or currency in which, any Bond or the
premium, if any, or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment of principal or interest
on or after the Stated Maturity thereof (or, in the case of redemption, on or
after the Redemption Date) or such payment of premium, if any, on or after the
date such premium becomes due and payable; or
(b) except for Permitted Liens, permit the creation of any lien prior to
or, pari passu with the Lien of any of the Security Documents with respect to
any of the Collateral, or terminate the Lien on any Collateral or deprive any
Bondholder of the security afforded by the Lien of this Indenture; or
(c) reduce the percentage in principal amount of the Outstanding Bonds, the
consent of whose Bondholders is required for any such supplemental indenture, or
the consent of whose Bondholders is required for any waiver (of compliance with
certain provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or reduce the requirements of
Section 14.4 for quorum or voting; or
(d) modify any of the provisions of Section 9.2 or Section 9.7 (except to
increase the percentage of the principal amount of the Outstanding Bonds
required to waive past defaults) or of this Section 12.2 (except to provide that
certain other provisions of this Indenture cannot be modified or waived without
the consent of the Bondholder of each Bond affected thereby).
A supplemental indenture that changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Bonds, or which modifies the rights
of the Bondholders of such series with respect to such covenant or other
provision, shall be deemed not to affect the rights under this Indenture of the
Bondholders of any other series.
Upon receipt by the Trustee of Board Resolutions of the Company and such
other documentation as the Trustee may reasonably require and upon the filing
with the Trustee of evidence of the Act of such Bondholders, the Trustee shall
join in the execution of such supplemental indenture or other instrument, as the
case may be, subject to the provisions of Sections 12.3 and 12.4.
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It shall not be necessary for any Act of Bondholders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 12.3 DOCUMENTS AFFECTING IMMUNITY OR INDEMNITY.
If in the opinion of the Company or the Trustee any document required to be
executed by it pursuant to the terms of Section 12.2 affects any interest,
right, duty, immunity or indemnity in favor of the Company or the Trustee under
this Indenture, the Company or the Trustee, as the case may be, may decline to
execute such document.
SECTION 12.4 EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any Series
Supplemental Indenture or other supplemental indenture permitted by this Article
XII or the modifications thereby of the trusts created by this Indenture, the
Trustee shall be entitled to receive an Officer's Certificate, and (subject to
Section 10.1) shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture.
SECTION 12.5 EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article XII,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Bondholder theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
SECTION 12.6 REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES.
Bonds authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article XII may, and shall if required by the
Company, bear a notation in form approved by the Company and the Trustee as to
any matter provided for in such supplemental indenture; and, in such case,
suitable notation may be made upon Outstanding Bonds after proper presentation
and demand. If the Company shall so determine, new Bonds so modified as to
conform, in the opinion of the Company and the Trustee, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the trustee in exchange for Outstanding Bonds.
ARTICLE XIII
SATISFACTION AND DISCHARGE
SECTION 13.1 SATISFACTION AND DISCHARGE OF BONDS.
Except as otherwise provided with respect to the Bonds of any series in the
Series Supplemental Indenture relating thereto, the Bonds of such series shall,
prior to the Stated
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Maturity thereof (or, if principal is payable in installments, the Stated
Maturity of the final installment of principal thereof), be deemed to have been
paid for all purposes of this Indenture, and the entire indebtedness of the
Company in respect thereof shall be deemed to have been satisfied and
discharged, upon satisfaction of the following conditions:
(a) the Company shall have irrevocably deposited with the Trustee, in
trust, money or Permitted Investments in an amount which shall be sufficient to
pay, without requiring reinvestment by the Trustee, when due the principal of
and premium, if any, and interest due and to become due on the Bonds of such
series on and prior to the Stated Maturity of principal thereof (or, if
principal is payable in installments, the Stated Maturity of the final
installment of principal thereof) or upon redemption or prepayment;
(b) if any such deposit of money or Permitted Investments shall have been
made prior to the Stated Maturity (or, if principal is payable in installments,
the Stated Maturity of the final installment of principal) or Redemption Date or
Prepayment Date of such Bonds, the Company shall have delivered to the Trustee a
Company Order each stating that such money shall be held by the Trustee, in
trust, as provided in Section 13.3;
(c) in the case of redemption or prepayment of Bonds, the notice requisite
to the validity of such redemption or prepayment shall have been given, or
irrevocable authority shall have been given by the Company to the Trustee to
give such notice, under arrangements satisfactory to the Trustee; and
(d) there shall have been delivered to the Trustee an Opinion of Counsel to
the effect that as a result of a change in Applicable Law after the date of this
Indenture such satisfaction and discharge of the indebtedness of the Company
with respect to the Bonds of such series shall not be deemed to be, or result
in, a taxable event with respect to Bondholders of such series for purposes of
United States Federal income taxation unless the Trustee shall have received
documentary evidence that each Bondholder of such series either is not subject
to, or is exempt from, United States Federal income taxation.
Upon satisfaction of the aforesaid conditions with respect to the Bonds of
any series, the Trustee shall, upon receipt of a Company Request, acknowledge in
writing that the Bonds of such series are deemed to have been paid for all
purposes of this Indenture and that the entire indebtedness of the Company in
respect thereof is deemed to have been satisfied and discharged.
If Bonds which shall be deemed to have been paid as provided in this
Section 13.1 do not mature and are not to be redeemed within the 60 day period
commencing on the date of the deposit with the Trustee of funds, the Company
shall, as promptly as practicable, give a notice, in the same manner as a notice
of redemption with respect to such Bonds, to the Bondholders to the effect that
such Bonds are deemed to have been paid and the circumstances thereof.
Notwithstanding the satisfaction and discharge of any Bonds as aforesaid,
the rights and obligations of the Company and the Trustee in respect of such
Bonds under Sections 2.7, 2.8, 2.9, 6.3, 10.3(e) and 10.7 and this Article XIII
shall survive.
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SECTION 13.2 SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further effect
(except as hereinafter expressly provided), and the Trustee, at the expense of
the Company, shall execute proper instruments prepared by the Company
acknowledging satisfaction and discharge of this Indenture, when:
(a) either
(i) all Bonds theretofore authenticated and delivered (other than (A)
Bonds which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.9 and (B) Bonds deemed to have
been paid in accordance with Section 13.1) have been delivered to the
Trustee for cancellation; or
(ii) all Bonds not theretofore delivered to the Trustee for
cancellation shall be deemed to have been paid in accordance with Section
13.1;
(b) all other sums due and payable hereunder have been paid; and
(c) the Company has delivered to the Trustee an Officer's Certificate and
an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
Upon satisfaction of the aforesaid conditions, the Trustee shall, upon
receipt of a Company Request, acknowledge in writing the satisfaction and
discharge of this Indenture.
Notwithstanding the satisfaction and discharge of this Indenture as
aforesaid, the rights and obligations of the Company and the Trustee under
Sections 2.7, 2.8, 2.9, 6.3, 10.3(e), 10.7, 15.1 and this Article XIII shall
survive.
Upon satisfaction and discharge of this Indenture as provided in this
Section 13.2, the Trustee shall assign, transfer and turn over to or upon the
order of the Company any and all money, securities and other property then held
by the Trustee for the benefit of the Bondholders other than money deposited
with the Trustee pursuant to Section 13.1(a) and interest and other amounts
earned or received thereon.
SECTION 13.3 APPLICATION OF TRUST MONEY.
The money deposited with the Trustee pursuant to Section 13.1 shall not be
withdrawn or used for any purpose other than, and shall be held in trust for,
the payment of the principal of and premium, if any, and interest on the Bonds
or portions of principal amount thereof in respect of which such deposit was
made, all subject, however, to the provisions of Section 6.1.
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ARTICLE XIV
MEETINGS OF BONDHOLDERS; ACTION WITHOUT MEETING
SECTION 14.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Bondholders of one or more, or all, series, may be called at
any time and from time to time pursuant to this Article XIV to make, give or
take any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be made, given or taken by
Bondholders of such series.
SECTION 14.2 CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of Bondholders of one or
more, or all, series of Bonds for any purposes specified in Section 14.1, to be
held at such time and at such place in the City of New York, County of New York,
or at such other place, as the Trustee shall determine. Notice of every such
meeting, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be given, in the
manner provided in Section 1.6, not less than 14 nor more than 60 days prior to
the date fixed for the meeting.
(b) If the Trustee shall have been requested to call a meeting of the
Bondholders of one or more, or all, series, by the Company or by the Bondholders
of 10% in aggregate principal amount of the Outstanding Bonds of such series
(or, in the case of a meeting of the Bondholders of the Bonds of all series, 10%
in aggregate principal amount of the Outstanding Bonds of all series, considered
as one class), by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have made the
first mailing of the notice of such meeting within 21 days after receipt of such
request or shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company or such Bondholders, as the case may be, may
determine the time and the place in the City of New York, County of New York, or
in such other place as the Company or such Bondholders, as the case may be,
shall determine, for such meeting and may call such meeting for such purposes by
giving notice thereof as provided in subsection (a) of this Section 14.2.
(c) Any meeting of Bondholders or one or more, or all, series shall be
valid without notice if the Bondholders of all Outstanding Bonds of such series
are present in person or by proxy and the Trustee are present, or if notice is
waived in writing before or after the meeting by the Bondholders of all
Outstanding Bonds of such series, or by such of them as are not present at the
meeting in person or by proxy.
SECTION 14.3 PERSONS ENTITLED TO VOTE AT MEETINGS.
To be entitled to vote at any meeting of Bondholders of one or more, or
all, series, a Person shall be (a) a Bondholder of one or more Outstanding Bonds
of such series or (b) a Person appointed by an instrument in writing as proxy
for a Bondholder or Bondholders of one or more Outstanding Bonds of such series
by such Bondholder or Bondholders. The only Persons who
96
shall be entitled to attend any meeting shall be the Bondholders described above
and any proxies of such Bondholders and their respective counsel, any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
SECTION 14.4 QUORUM; ACTION.
The Persons entitled to vote a majority in aggregate principal amount of
the Outstanding Bonds of the series with respect to which a meeting shall have
been called as hereinbefore provided, considered as one class, shall constitute
a quorum for a meeting of Bondholders of such series; PROVIDED, HOWEVER, that if
any action is to be taken at such meeting which this Indenture expressly
provides may be taken by the Bondholders of a specified percentage that is less
than a majority in principal amount of the Outstanding Bonds of such series,
considered as one class, the Persons entitled to vote such specified percentage
in principal amount of the Outstanding Bonds of such series, considered as one
class, shall constitute a quorum. In the absence of a quorum, the meeting may be
adjourned for a period of not less than ten days as determined by the chairman
of the meeting prior to the adjournment of such meeting. In the absence of a
quorum at any such adjourned meeting, such adjourned meeting may be further
adjourned for a period of not less than ten days as determined by the chairman
of the meeting prior to the adjournment of such adjourned meeting. Except as
provided in Section 14.5(e), notice of the reconvening of any adjourned meeting
shall be given as provided in Section 14.2(a), except that such notice need be
given only once not less than five days prior to the date on which the meeting
is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage, as provided above, of the principal amount
of the Outstanding Bonds of such series which shall constitute a quorum.
Except as limited by Section 12.2, any resolution presented to a meeting or
adjourned meeting duly reconvened at which a quorum is present as aforesaid may
be adopted by the affirmative vote of the Bondholders of a majority in aggregate
principal amount of the Outstanding Bonds of the series with respect to which
such meeting shall have been called, considered as one class; PROVIDED, HOWEVER,
that, except as so limited, any resolution with respect to any action that this
Indenture expressly provides may be taken by the Bondholders of a specified
percentage that is less than a majority in principal amount of the Outstanding
Bonds of such series, considered as one class, may be adopted at a meeting or an
adjourned meeting duly reconvened and at which a quorum is present as aforesaid
by the affirmative vote of the Bondholders of such specified percentage in
principal amount of the Outstanding Bonds of such series, considered as one
class.
Any resolution passed or decision taken at any meeting of Bondholders duly
held in accordance with this Section 14.4 shall be binding on all the
Bondholders of the series with respect to which such meeting shall have been
held, whether or not present or represented at the meeting.
97
SECTION 14.5 ATTENDANCE AT MEETINGS; DETERMINATION OF VOTING RIGHTS;
CONDUCT OF ADJOURNMENT OF MEETINGS.
(a) Attendance at meetings of Bondholders may be in person or by proxy,
and, to the extent permitted by law, any such proxy shall remain in effect and
be binding upon any future Bondholder with respect to which it was given, unless
and until specifically revoked by the Bondholder or future Bondholder of such
Bonds before being voted.
(b) Notwithstanding any other provision of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Bondholders in regard to proof of the holding of such Bonds and of the
appointment of proxies and in regard to the appointment and duties of inspectors
of votes, the submission and examination of proxies, certificates and other
evidence of the right to vote, and such other matters concerning the conduct of
the meeting as it shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Bonds shall be proved in the
manner specified in Section 1.4 and the appointment of any proxy shall be proved
in the manner specified in Section 1.4. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 1.4 or other proof.
(c) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Bondholders as provided in Section 14.2(b), in which case the
Company or the Bondholders of the series calling the meeting, as the case may
be, shall in like manner appoint a temporary chairman. A permanent chairman and
a permanent secretary of the meeting shall be elected by vote of the Persons
entitled to vote a majority in aggregate principal amount of the Outstanding
Bonds of all series represented at the meeting, considered as one class.
(d) At any meeting each Bondholder of an Outstanding Bond of any series or
his proxy shall be entitled to one vote for each $1,000 original principal
amount of Bonds of such series held or represented by him, and each Bondholder
of any such Bond or his proxy shall be entitled to divide the votes carried by
such Bond, casting some for and some against a particular action, as he sees
fit; PROVIDED, HOWEVER, that no vote shall be cast or counted at any meeting in
respect of any Bond challenged as not Outstanding and ruled by the chairman of
the meeting to be not Outstanding. The chairman of the meeting shall have no
right to vote, except as a Bondholder of a Bond or proxy.
(e) Any meeting duly called pursuant to Section 14.2 at which a quorum is
present may be adjourned from time to time by Persons entitled to vote a
majority in aggregate principal amount of the Outstanding Bonds of all series
represented at the meeting, considered as one class; and the meeting may be held
as so adjourned without further notice.
SECTION 14.6 COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of Bondholders shall
be by written ballots on which shall be subscribed the signatures of the
Bondholders of Outstanding Bonds or of their representatives by proxy and the
principal amounts and serial numbers of the
98
Outstanding Bonds, of the series with respect to which the meeting shall have
been called, held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in quadruplicate of all
votes cast at the meeting. A record, at least in quadruplicate, of the
proceedings of each meeting of Bondholders shall be prepared by the secretary of
the meeting and there shall be attached to such record the original reports of
the inspectors of votes on any vote by ballot taken thereat and affidavits by
one or more persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that such notice was given as provided in
Section 14.2 and, if applicable, Section 14.4. Each copy shall be signed and
verified by the affidavits of the permanent chairman and secretary of the
meeting and one such copy shall be delivered to the Company and another to the
Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
SECTION 14.7 ACTION WITHOUT MEETING.
In lieu of the vote of Bondholders at a meeting as hereinbefore
contemplated in this Article XIV, any request, demand, authorization, direction,
notice, consent, waiver or other action may be made, given or taken by
Bondholders by written instruments as provided in Section 1.4.
ARTICLE XV
NONRECOURSE LIABILITY
SECTION 15.1 NONRECOURSE LIABILITY.
Satisfaction of the obligations of the Company under this Indenture, for
the payment of the principal of or premium, if any, or interest on any Bonds, or
any part thereof, or for any claim based thereon or otherwise in respect thereof
or related thereto, shall be had solely from the Collateral and the assets of
the Company and no recourse shall be had in the event of any non-performance by
the Company of any such obligations to (i) any assets or properties of the
Members (or any Person that controls any Member within the meaning of Section 15
of the Securities Act or Section 20 of the Securities Exchange Act) or (ii) any
Affiliate of the Company or any incorporators, officers, directors or employees
thereof, and no judgment for any deficiency upon the obligations of the Company
under this Indenture, for the payment of the principal of or premium, if any, or
interest on any Bonds, or any part thereof, or for any claim based thereon or
otherwise in respect thereof or related thereto, shall be obtainable by the
Bondholders or the Trustee against any Member or Affiliate of the Company or any
other incorporator, stockholder, officer, employee or director, past, present or
future of the Company or any Affiliate of the Company; PROVIDED, HOWEVER, that
nothing contained herein shall prevent the taking of any action permitted by law
against the Company or any of its Affiliates, or in any way affect or impair the
rights of the Trustee or Bondholders to take any action permitted by law, in
either case to realize upon the Collateral and; PROVIDED, FURTHER, that nothing
herein shall be
99
deemed to affect the obligations of any Affiliate of the Company under any
Transaction Document to which such Affiliate is a party.
ARTICLE XVI
DEPOSITARY BANK
SECTION 16.1 DEPOSITARY BANK.
The Trustee hereby designates and appoints The Bank of New York to act as
the Depositary Bank under this Agreement, and the Depositary Bank hereby agrees
to act, as "securities intermediary" (within the meaning of Section 8-102(a)(14)
of the UCC) with respect to the Indenture Accounts. The Company hereby
acknowledges that the Depositary Bank shall act as securities intermediary with
respect to the Indenture Accounts and pursuant to this Agreement. The Depositary
Bank shall not have any duties or responsibilities except those expressly set
forth in this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
100
IN WITNESS WHEREOF, the Parties have executed this Indenture by their duly
authorized signatories as of the date first above written.
AES RED OAK, L.L.C.
By: /s/ Charles B. Falter
-------------------------------------------
Name: Charles B. Falter
Title: Vice President
THE BANK OF NEW YORK,
as Trustee
By: /s/ Mary Beth Lewicki
-------------------------------------------
Name: Mary Beth Lewicki
Title: Vice President
THE BANK OF NEW YORK,
as Depository Bank
By: /s/ Mary Beth Lewicki
-------------------------------------------
Name: Mary Beth Lewicki
Title: Vice President
SCHEDULE 3.4
GOVERNMENTAL APPROVALS
-----------------------------------------------------------------------------------------------------
AES RED OAK
PERMITS AND APPROVALS
-----------------------------------------------------------------------------------------------------
AGENCY PERMIT/APPROVAL RESPONSIBLE STATUS
PARTY
------------------------------ ----------------------- --------------- ------------------------------
Federal Energy Regulatory Exempt Wholesale AES Red Oak Application for EWG
Commission Generator Certification submitted
Certification 9/13/99; Docket
#EG99-229-000. Certification
received on 11/4/99
------------------------------ ----------------------- --------------- ------------------------------
U.S. Department of Energy Fuel Use Act AES Red Oak Certification #175 Published
Office of Fossil Fuel Certification in Federal Register Vol. 64.
#126 on 7/1/99 Pg. 35637
------------------------------ ----------------------- --------------- ------------------------------
U.S. Department of Notice of AES Red Oak Aeronautical Study
Transportation Federal Construction or #99-AEA-1757-OE
Aviation Administration Alteration -- Approved 7/23/99
Combustion Turbine
Stacks
------------------------------ ----------------------- --------------- ------------------------------
U.S. Department of Notice of AES Red Oak Aeronautical Study
Transportation Federal Construction or #99-AEA-2094-OE underway
Aviation Administration Alteration -- 7/20/99 prior study
Construction Crane #99-AEA-1757-OE
Approved 8/3/99
------------------------------ ----------------------- --------------- ------------------------------
Schedule 3.4-1
-----------------------------------------------------------------------------------------------------
AES RED OAK
PERMITS AND APPROVALS
-----------------------------------------------------------------------------------------------------
AGENCY PERMIT/APPROVAL RESPONSIBLE STATUS
PARTY
------------------------------ ----------------------- --------------- ------------------------------
NJDEP, Bureau of Air Quality Prevention of AES Red Oak Submittals 1/4/99; 7/19/99
Significant and 7/26/99 Facility ID
Deterioration/State #17965 Permit ID# PCP990001
Air Permit assigned. Draft Fact Sheet,
Public Notice and Air
Permit/Compliance Plan
received 11/12/99. Notice of
Opportunity for Public
Comment published in Home
News Tribune and published
in Star Ledger 12/9/99.
Public comment period closes
1/8/00. Final permit issued
on 1/28/00
------------------------------ ----------------------- --------------- ------------------------------
NJDEP, Land Use Regulation Freshwater Wetlands AES Red Oak NJDEP approval 3/22/99 File
Delineation LOI for #1219-90-0002.4 Wetlands
AES Red Oak Site Line approved; intermediate
resource value determination
------------------------------ ----------------------- --------------- ------------------------------
NJDEP, Land Use Regulation Freshwater Wetlands AES Red Oak Submitted 12/15/99. Tied to
Delineation LOI for Stream Encroachment Permit
Site Access Roadway application. Docket
and/or Construction #1219-90-0002.5
Laydown Area
------------------------------ ----------------------- --------------- ------------------------------
Schedule 3.4-2
-----------------------------------------------------------------------------------------------------
AES RED OAK
PERMITS AND APPROVALS
-----------------------------------------------------------------------------------------------------
AGENCY PERMIT/APPROVAL RESPONSIBLE STATUS
PARTY
------------------------------ ----------------------- --------------- ------------------------------
NJDEP, Land Use Regulation Transition Area AES Red Oak Submitted 12/15/99. Tied to
Element Waiver and Statewide Stream Encroachment Permit
General Permits application. Docket
Basins; Outfall to #1219-90-0002.5
Wetlands; Roadway for
Site
------------------------------ ----------------------- --------------- ------------------------------
NJDEP, Land Use Regulation Transition Area AES Red Oak Submitted 12/15/99. Tied to
Element Waiver and Statewide Stream Encroachment Permit
General Permits for application. Docket
Site Access Roadway #1219-90-0002.5
and/or Construction
Laydown Area
------------------------------ ----------------------- --------------- ------------------------------
NJDEP, Land Use Regulation Water Quality AES Red Oak Submitted 12/15/99. Tied to
Certification for Site Stream Encroachment Permit
application. Docket
#1219-90-0002.5
------------------------------ ----------------------- --------------- ------------------------------
NJDEP, Land Use Regulation Water Quality AES Red Oak Submitted 12/15/99. Tied to
Certification for Stream Encroachment Permit
Site Access Roadway application. Docket
and/or Construction #1219-90-0002.5
Laydown Area
------------------------------ ----------------------- --------------- ------------------------------
Schedule 3.4-3
-----------------------------------------------------------------------------------------------------
AES RED OAK
PERMITS AND APPROVALS
-----------------------------------------------------------------------------------------------------
AGENCY PERMIT/APPROVAL RESPONSIBLE STATUS
PARTY
------------------------------ ----------------------- --------------- ------------------------------
NJDEP, Bureau of Treatment Works AES Red Oak Submitted to Borough of
Construction and Connection Approval for sewerage Sayreville on 12/15/99.
Signed by Mayor on 12/20/99.
Submitted to MCUA 12/21/99.
Delivered to NJDEP on 1/12/00
and assigned Docket
#00-3328-4. Revised Plan and
Profile drawings delivered to
NJDEP on 2/4/00.
------------------------------ ----------------------- --------------- ------------------------------
NJDEP, Land Use Regulation Stream Encroachment AES Red Oak Submitted to Middlesex
Element and Water Quality County Engineers Office on
Encroahment for 10/19/99 for
Stormwater Outfall signature/transmittal to
off Jernee Mill Road NJDEP. Middlesex County
Freeholders approval on
12/15/99. Permit application
submitted to NJDEP on
12/15/99. Original
application signatures form
delivered to NJDEP on
12/21/99. Application
logged in on 12/15/99 and
assigned docket
#1219-90-0002.5 Submitted
revised documentation to D.
Ahdout on 2/4/00
------------------------------ ----------------------- --------------- ------------------------------
Schedule 3.4-4
-----------------------------------------------------------------------------------------------------
AES RED OAK
PERMITS AND APPROVALS
-----------------------------------------------------------------------------------------------------
AGENCY PERMIT/APPROVAL RESPONSIBLE STATUS
PARTY
------------------------------ ----------------------- --------------- ------------------------------
NJDEP, Dam Safety Section Dam Permit for AES Red Oak Clarification letter request
Detention Basin submitted 10/28/99. NJDEP
(possible) determined detention basin
is Class IV Dam. Letter from
NJDEP forthcoming stating no
permit required. Need to
comply with Class IV Dam
Regulations. Second set of
drawings sent to NJDEP
12/15/99. Letter from NJDEP
dated 12/22/99 received
stating no permit required.
Need to comply with Class IV
Dam Regulations.
------------------------------ ----------------------- --------------- ------------------------------
Borough Sayreville and Water Connection Point AES Red Oak Submitted to Borough of
NJDEP approval Sayreville on 12/17/99.
Signed by Mayor on 12/20/99.
Hand delivered to NJDEP on
12/21/99. Assigned Docket
#W-12-99-6311. Application
deemed complete on 12/29/99.
TRC discussed review status
on 2/16/00.
------------------------------ ----------------------- --------------- ------------------------------
Schedule 3.4-5
-----------------------------------------------------------------------------------------------------
AES RED OAK
PERMITS AND APPROVALS
-----------------------------------------------------------------------------------------------------
AGENCY PERMIT/APPROVAL RESPONSIBLE STATUS
PARTY
------------------------------ ----------------------- --------------- ------------------------------
Middlesex County Utilities Industrial Discharge AES Red Oak Submitted on 10/18/99. Draft
Authority (MCUA) Permit (non-domestic permit #20161 under AES
wastewater discharge review and agreed on permit
permit) language 12/21/99 with MCUA.
Docket is being placed on MCUA
commissioner's 1/6/00 agenda
for approval. Received MCUA
commissioner's approval on
1/27/00.
------------------------------ ----------------------- --------------- ------------------------------
Middlesex County Planning Approval of Site Plan AES Red Oak Submitted 7/15/99
Board (MCPB) and Stormwater Application #5Y-5P-130
Drainage Approved 8/16/99. Revised
site plan to be submitted
12/22/99 to address county
planning board conditions.
Maser Consulting submitted
2/3/00 letter on stormwater
impact on downstream
properties to MCPB. The
Performance Bond guarantee
details from MCPB. AES
preparing performance bond
for had delivery to MCPB on
2/23/00.
------------------------------ ----------------------- --------------- ------------------------------
Schedule 3.4-6
-----------------------------------------------------------------------------------------------------
AES RED OAK
PERMITS AND APPROVALS
-----------------------------------------------------------------------------------------------------
AGENCY PERMIT/APPROVAL RESPONSIBLE STATUS
PARTY
------------------------------ ----------------------- --------------- ------------------------------
Middlesex County Mosquito Approval of Onsite AES Red Oak Submitted 7/15/99
Control Commission Detention Basin as Approved contained in
part of MCPB Middlesex County Planning
Approval. Board Approval dated 8/16/99
#SY-SP-130
------------------------------ ----------------------- --------------- ------------------------------
Conrail/CSX License Agreement to AES Red Oak Submitted on 12/23/99. Under
Cross Railroad with review. Conrail Engineers
access Roadway and reviewed and verbally
for underground piping/profile drawings hand
infrastructure delivered on 2/11/00.
License Agreement for at Grade
Crossing and License Agreement
for Utility Lines Occupation
was executed by AES & Conrail
on 2/18/00 and 2/23/00,
respectively. A 2/18/00 letter
approving license drawings &
confirming application plans
etc. meet Conrail
specifications.
------------------------------ ----------------------- --------------- ------------------------------
Freehold Soil Conservation Soil Erosion and AES Red Oak Approved 9/27/99 and
Service District Sediment Control Plan included in Memorialized
Certification Resolution dated 10/12/99
------------------------------ ----------------------- --------------- ------------------------------
Freehold Soil Conservation NJPDES RFA for AES Red Oak Submitted 10/20/99 Received
Service District Construction 10/21/99 and assigned
Stormwater Discharge application #12-19-00-0023
------------------------------ ----------------------- --------------- ------------------------------
Schedule 3.4-7
-----------------------------------------------------------------------------------------------------
AES RED OAK
PERMITS AND APPROVALS
-----------------------------------------------------------------------------------------------------
AGENCY PERMIT/APPROVAL RESPONSIBLE STATUS
PARTY
------------------------------ ----------------------- --------------- ------------------------------
Sayreville Planning Board Municipal Site Plan AES Red Oak Submitted 7/15/99 Approved
Approval by Planning Board 9/27/99
Memorialized Resolution dated
10/12/99. Submittal of plan
revisions/additional
information to CME and Heyer,
Gruel on 1/5/00. Heyer, Gruel
approval received on 1/11/00.
Response to CME 1/13/00 lette
r submitted on 1/28/00 with CME
reviewing revised site plans.
Maser submitted 2/4/00 letter
to CME. TRC submitted
supplemental response to CME
on 2/14/00. Received CME
letter dated 2/17/00
requesting additional
information/plan revisions.
Maser submitting response
compliance package by hand
delivery to CME on 2/22/00.
------------------------------ ----------------------- --------------- ------------------------------
Sayreville Planning Board Soil Erosion and AES Red Oak Approved 9/27/99 and
(CME) Sediment Control Plan included in Memorialized
Certification Resolution dated 10/12/99.
------------------------------ ----------------------- --------------- ------------------------------
Schedule 3.4-8
-----------------------------------------------------------------------------------------------------
AES RED OAK
PERMITS AND APPROVALS
-----------------------------------------------------------------------------------------------------
AGENCY PERMIT/APPROVAL RESPONSIBLE STATUS
PARTY
------------------------------ ----------------------- --------------- ------------------------------
NJDEP, Division of Water NJPDES Stormwater AES Red Oak To be submitted prior to
Resources Discharge Permit facility operation
------------------------------ ----------------------- --------------- ------------------------------
Middlesex County Roads Road Opening Permit Raytheon Construction approval
Department for Jernee Mill Road
------------------------------ ----------------------- --------------- ------------------------------
NJDEP, Bureau of Treatment Works Raytheon Construction approval
Construction and Connection Approval for
oil/water separators
------------------------------ ----------------------- --------------- ------------------------------
NJDEP, Bureau of Safe Physical Connection Raytheon Construction approval
Drinking Water Permit
------------------------------ ----------------------- --------------- ------------------------------
NJ Department of Community Building Construction Raytheon Construction approval
Affairs -- Bureau of Approvals
Construction
------------------------------ ----------------------- --------------- ------------------------------
Sayreville Town Engineer Building Permits Raytheon Construction approval
------------------------------ ----------------------- --------------- ------------------------------
Schedule 3.4-9
SCHEDULE 6.2
INSURANCE POLICIES
I. GENERAL CONDITIONS:
(a) If at any time any of the required insurance shall no longer be
available on commercially reasonable terms (as confirmed by the Independent
Insurance Advisor), the Company shall procure substitute insurance coverage
reasonably satisfactory to the Independent Insurance Advisor that is the most
equivalent to the required coverage and that is available on commercially
reasonable terms.
(b) All policies shall waive the rights of subrogation against the
Collateral Agent.
(c) All policies, except workers' compensation policies and automobile
liability policies, shall name the Collateral Agent and the Power Purchaser as
additional insureds. All policies protecting real and personal property or loss
of income shall include a Lenders' Loss Payable provision, pursuant to a form
agreed to by the Company and the Independent Insurance Advisor, for the benefit
of the Collateral Agent.
(d) All policies covering real and personal property and business
interruption shall be endorsed to provide a minimum of 45 days' notice of
cancellation, nonrenewal, or material change (restricting coverage) to the
Collateral Agent.
(e) All policies shall stipulate by endorsement or equivalent policy
language that the additional insured status of the Collateral Agent or the Power
Purchaser places no responsibility on the Collateral Agent or the Power
Purchaser for the payment of policy premiums, nor does the action or failure to
take action by any other insured or additional insured invalidate coverages
under Sections II(a) or (b) or Sections III(a) or (b) for the Collateral Agent
or the Power Purchaser under said policies.
(f) A severability of interest clause or equivalent cross liability
endorsement shall be included in each policy.
(g) All policies shall be primary as respects coverage provided for the
Project.
(h) All policies shall be provided through insurance carriers rated "A-,"
"IX" or better by the Best's Insurance Guide and Key Rating Guides or other
insurance companies reasonably acceptable to the Collateral Agent, in each case,
which are authorized to do business in the State of New Jersey.
(i) Any policy under Section II(a) or (b) or Section III(a) or (b) shall
stipulate by endorsement or equivalent policy language that following a Trigger
Event (as defined in the Collateral Agency Agreement) and the exercise of
remedies under the Security Documents, the Collateral Agent shall have the right
to participate in the adjustment of all claims made under said policies.
6.2-1
(j) Any policy under Section II(a) or (b) or Section III(a) or (b) shall
stipulate by endorsement or equivalent policy language that following a Trigger
Event (as defined in the Collateral Agency Agreement) and the exercise of
remedies under the Security Documents, said policies can be assigned to the
Collateral Agent.
II. CONSTRUCTION PERIOD INSURANCE: the following coverages shall be in effect on
the date of this Indenture:
(a) BUILDER'S RISK. The Company shall maintain or cause to be maintained
all-risk builder's risk insurance, covering physical loss or damage to the
Facility for perils including but not limited to fire, lightning, hail,
explosion, riot and civil commotion, vandalism and malicious mischief, theft,
damage from aircraft (and other falling objects), inland transportation,
vehicles, smoke, fire, flood, earthquake, landslide, Tsunami, windstorm,
collapse, start-up and testing of the Facility and to any and all materials,
supplies or equipment comprising the Facility or intended for installation into
the Facility and covering all such materials, supplies or equipment during
temporary storage and transit to or from the Site during erection and otherwise.
Insurance maintained shall be written on a full replacement cost basis; provided
such insurance may have a sub-limit of $100,000,000 in case of flood or
earthquake. This insurance shall also include Maintenance Coverage for two (2)
years following the first to occur of Provisional Acceptance, Interim Acceptance
and Final Acceptance of the Facility. Policy Deductible amounts shall be based
on a "per occurrence" basis not to exceed $500,000 for Equipment Start-up
Testing, $250,000 for earthquake, $250,000 for windstorm, $250,000 for flood,
and $250,000 for all other property damage losses.
(b) DELAYED OPENING. As an extension of Section II(a) hereof or as a
separate policy, the Company shall maintain or cause to be maintained cost of
delayed opening insurance in an amount equal to 18 months projected continuing
expenses and Senior Debt Service of the Company. This extension or policy shall
include coverage for delays resulting from (i) damage to the Facility, (ii)
damage to equipment while in transit and (iii) damage to any equipment while in
storage away from the Site. The "Delay in Start-up" Deductible shall also be
based on a "per occurrence" basis with Waiting Period Deductibles not to exceed
sixty (60) days. Earthquake and flood coverage are to be provided at the maximum
limits commercially available. Coverage shall remain in effect until replaced by
business interruption insurance as specified in Section III(b) hereof.
(c) COMPREHENSIVE GENERAL LIABILITY. The Company shall maintain or cause to
be maintained comprehensive (or commercial) general liability insurance written
on an occurrence basis and with a combined single limit of not less than
$1,000,000 and a $2,000,000 general annual aggregate limit. Such coverage shall
include premises/operations, explosion, collapse and underground hazards, broad
form contractual, independent contractors, products/completed operations, broad
form property damage and personal injury. Such policy shall be written on a
location specific basis and shall apply solely to the construction, use,
operation and maintenance of the Facility and the Site. Coverage shall remain in
effect until replaced by permanent insurance as specified in Section III(c)
hereof.
(d) WORKERS' COMPENSATION AND EMPLOYER'S LIABILITY. The Company shall
maintain (i) workers' compensation insurance with statutory limits and (ii)
employer's liability with limits
6.2-2
of not less than $1,000,000 including occupational disease coverage. Coverage
shall remain in effect until replaced by permanent insurance as specified in
Section III(d) hereof.
(e) AUTOMOBILE LIABILITY. The Company shall maintain comprehensive (or
business) automobile liability insurance for owned (if any), nonowned and hired
vehicles with combined single limits of not less than $1,000,000 and containing
appropriate no-fault insurance provisions wherever applicable. Coverage shall
remain in effect until replaced by permanent insurance as specified in Section
III(e) hereof.
(f) UMBRELLA LIABILITY. The Company shall maintain or cause to be
maintained excess (or umbrella) liability insurance written on an occurrence
basis and providing coverage limits in excess of the coverage under the
insurance specified in Sections II(c), (d)(ii) and (e) above. The limits of the
insurance so specified and this excess (or umbrella) coverage, when combined,
shall be not less than $19,000,000 per occurrence and aggregate annually. Such
policy shall be written on a project specific basis naming the Company as the
insured and shall apply solely to the construction, use, operation and
maintenance of the Facility and the Property. Coverage shall remain in effect
until replaced by permanent insurance as specified in Section III(f) hereof.
(g) CONTRACTOR'S INSURANCE. The Company shall cause the Contractor to
obtain and maintain in full force and effect the additional insurance coverage
required in the EPC Contract.
III. OPERATING PERIOD INSURANCE: the following coverages shall be placed into
effect upon transfer of care, custody and control of the Facility to the
Company, and shall be maintained in effect at all times until all obligations of
the Company pursuant to this Indenture, the Securities, the Collateral Agency
Agreement and the other Security Documents have been fully discharged:
(a) PROPERTY AND BOILER AND MACHINERY. The Company shall maintain or cause
to be maintained all-risk property and boiler and machinery insurance, covering
physical loss or damage to the Facility and transmission lines including but not
limited to fire and extended coverage, lightning, hail, explosion, riot and
civil commotion, vandalism and malicious mischief, theft, damage from aircraft
(and other falling objects), vehicles, smoke, landslide, windstorm, collapse,
earthquake, flood and comprehensive boiler and machinery (including electrical
malfunction and mechanical breakdown). Such insurance shall cover any and all
materials, supplies and equipment comprising the Facility. The all-risk property
and boiler and machinery coverage shall not contain an exclusion for resultant
damage caused by faulty workmanship, design or materials. Coverage shall be
written on a full replacement cost basis; provided such insurance may have a
sub-limit of $100,000,000 in case of flood or earthquake. Such policy shall
contain a valid agreed amount endorsement waiving any coinsurance penalty. The
policy may be subject to deductibles not to exceed $250,000 per occurrence,
except that with respect to the steam turbine generator where the maximum
permitted deductible shall be $350,000 and the 501F turbine generator, where the
maximum permitted deductible shall be $1,000,000; provided, that the maximum
permitted deductible for the 501F turbine generator shall be $500,000 if such
coverage is available on commercially reasonable terms.
6.2-3
(b) BUSINESS INTERRUPTION. As an extension of Section III(a) above or as a
separate policy, the Company shall maintain or cause to be maintained business
interruption insurance in an amount equal to 18 months of gross earnings less
non-continuing expenses of the Company. This extension or separate policy shall
include coverage for (i) business interruption arising from loss or damage to
the Facility and (ii) contingent business interruption arising from damage to
the property and equipment of customers and suppliers of the Facility, which is
not covered by the insurance specified in Section III(a) above. This extension
or separate policy shall also include coverage for expediting expenses and extra
expense with a sublimit of $2,000,000. This extension or separate policy shall
have a deductible not to exceed 60 days' business interruption.
(c) COMPREHENSIVE GENERAL LIABILITY. The Company shall maintain or cause to
be maintained comprehensive (or commercial) general liability insurance written
on an occurrence basis and with a combined single limit of not less than
$1,000,000 (and $2,000,000 annual aggregate). Such coverage shall include
premises/operations, explosion, collapse and underground hazards, broad form
contractual, independent contractors, products/completed operations, broad form
property damage and personal injury. Such policy shall be written on a
project-specific basis. The Company and the Operator shall be named insureds on
such policy.
(d) WORKERS' COMPENSATION AND EMPLOYER'S LIABILITY. The Company shall
maintain (i) workers' compensation insurance with statutory limits and (ii)
employer's liability with limits of not less than $1,000,000 including
occupational disease coverage.
(e) AUTOMOBILE LIABILITY. The Company shall maintain comprehensive (or
business) automobile liability insurance for owned (if any), nonowned and hired
vehicles with combined single limits of not less than $1,000,000 and containing
appropriate no-fault insurance provisions wherever applicable.
(f) UMBRELLA LIABILITY. The Company shall maintain or cause to be
maintained project specific excess (or umbrella) liability insurance written on
an occurrence basis and providing coverage limits in excess of the coverage
under the insurance specified in Sections III(c), (d)(ii) and (e) above. The
limits of the insurance so specified and this excess (or umbrella) coverage,
when combined, shall not be less than $19,000,000 per occurrence and aggregate
annually. The Company and Operator shall be named insureds on such policy.
(g) ADDITIONAL INSURANCE. The Company shall maintain in full force and
effect any additional insurance coverage required by the Project Contracts.
6.2-4
EXHIBIT 5.1
FORM OF WIRE INSTRUCTIONS
Payments from Construction Account to be paid on Closing, March 15, 2000
Disbursement Due Disbursement
Amount Date Instructions
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Exhibit 5.1-5