Exhibit 10.2


 


EXECUTION COPY


 


FOURTH AMENDED AND
RESTATED CREDIT AND

REIMBURSEMENT AGREEMENT



dated as of



July 29, 2008

among



THE AES CORPORATION,

as Borrower,


 


AES OKLAHOMA HOLDINGS,
L.L.C.,

AES HAWAII MANAGEMENT COMPANY, INC.,

AES WARRIOR RUN FUNDING, L.L.C.,

AND AES NEW YORK FUNDING, L.L.C.,

as Subsidiary Guarantors,



CITICORP USA, INC.,

as Administrative Agent,


 


CITIBANK, N.A.,

as Collateral Agent,


 


CITIGROUP GLOBAL MARKETS
INC., 

as Lead Arranger and Book Runner,


 


BANC OF AMERICA
SECURITIES LLC,

as Lead Arranger and Book Runner and as Co-Syndication Agent

(Initial Term Loan Facility),


 


DEUTSCHE BANK SECURITIES
INC.,

as Lead Arranger and Book Runner (Initial Term Loan Facility),


 


UNION BANK OF CALIFORNIA,
N.A.,

as Co-Syndication Agent (Initial Term Loan Facility) and as Lead Arranger and
Book Runner and as Syndication Agent

(Revolving Credit Loan Facility),


 


LEHMAN COMMERCIAL PAPER
INC.,


as Co-Documentation Agent (Initial Term Loan
Facility),


 


UBS SECURITIES LLC,


as Co-Documentation Agent (Initial Term Loan
Facility),


 


SOCIÉTÉ GÉNÉRALE,


as Co-Documentation Agent (Revolving Credit Loan
Facility),


 


CREDIT LYONNAIS NEW YORK
BRANCH,

as Co-Documentation Agent (Revolving Credit Loan Facility), and


 


THE BANKS LISTED HEREIN


 

















 


TABLE OF
CONTENTS


 


	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I

  	
   

  
	
   

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  Section 1.01 Definitions

  	
  2

  
	
  Section 1.02 Accounting
  Terms and Determinations

  	
  32

  
	
  Section 1.03 Types of
  Borrowing

  	
  33

  
	
  Section 1.04 Currency
  Equivalents Generally

  	
  33

  
	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
   

  	
   

  
	
  THE CREDITS

  	
   

  
	
   

  	
   

  
	
  Section 2.01 Commitment
  to Lend

  	
  33

  
	
  Section 2.02 Notice of
  Borrowing

  	
  34

  
	
  Section 2.03 Revolving
  Letters of Credit

  	
  35

  
	
  Section 2.04 Evidence of
  Debt

  	
  42

  
	
  Section 2.05 Maturity of
  Loans

  	
  43

  
	
  Section 2.06 Interest
  Rates

  	
  43

  
	
  Section 2.07 Method of
  Electing Interest Rates

  	
  45

  
	
  Section 2.08 Commitment
  Fee

  	
  46

  
	
  Section 2.09 Termination
  or Reduction of Revolving Credit Loan Commitments

  	
  46

  
	
  Section 2.10 Prepayment
  of the Loans

  	
  47

  
	
  Section 2.11 General
  Provisions as to Payments

  	
  48

  
	
  Section 2.12 Funding
  Losses

  	
  49

  
	
  Section 2.13 Computation
  of Interest and Fees

  	
  49

  
	
  Section 2.14 Revolving
  L/C Cash Collateral Account

  	
  49

  
	
  Section 2.15
  Computations of Outstandings; Determination of Available Amount of
  Alternative Currency Letters of Credit

  	
  51

  
	
  Section 2.16 Alternative
  Currency Letter of Credit Issuances

  	
  52

  
	
  Section 2.17 Increase in
  Term Loan Commitments

  	
  53

  
	
  Section 2.18 Increase in
  Revolving Credit Loan Commitments

  	
  55

  
	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
   

  	
   

  
	
  CONDITIONS

  	
   

  
	
   

  	
   

  
	
  Section 3.01 Closing

  	
  57

  
	
  Section 3.02 Extension
  of Credit

  	
  59

  
	
   

  	
   

  



 


i

















 


	
  ARTICLE IV

  	
   

  
	
   

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  
	
  Section 4.01 Corporate
  Existence and Power

  	
  60

  
	
  Section 4.02 Corporate
  and Governmental Authorization and Filings; No Contravention

  	
  60

  
	
  Section 4.03 Compliance
  with Laws

  	
  61

  
	
  Section 4.04 Binding
  Effect

  	
  61

  
	
  Section 4.05 Financial
  Information

  	
  61

  
	
  Section 4.06 Litigation

  	
  62

  
	
  Section 4.07 Compliance
  with ERISA

  	
  62

  
	
  Section 4.08
  Environmental Matters

  	
  62

  
	
  Section 4.09 Taxes

  	
  63

  
	
  Section 4.10 Material
  AES Entities

  	
  63

  
	
  Section 4.11 Not an
  Investment Company

  	
  63

  
	
  Section 4.12 Public
  Utility Holding Company Act

  	
  63

  
	
  Section 4.13 Full
  Disclosure

  	
  64

  
	
  Section 4.14 Collateral
  Documents and Collateral

  	
  64

  
	
  Section 4.15 Existing
  Letters of Credit

  	
  65

  
	
  Section 4.16 Solvency

  	
  65

  
	
  Section 4.17 Pledged
  Subsidiaries

  	
  66

  
	
  Section 4.18 Qualified
  Holding Companies Debt

  	
  66

  
	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
   

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

  
	
  Section 5.01 Information

  	
  66

  
	
  Section 5.02 Payment of
  Obligations

  	
  70

  
	
  Section 5.03 Maintenance
  of Property; Insurance

  	
  70

  
	
  Section 5.04 Conduct of
  Business and Maintenance of Existence

  	
  70

  
	
  Section 5.05 Compliance
  with Laws

  	
  71

  
	
  Section 5.06 Inspection
  of Property, Books and Records

  	
  71

  
	
  Section 5.07 Limitation
  on Debt

  	
  71

  
	
  Section 5.08 Use of
  Proceeds

  	
  76

  
	
  Section 5.09 Restricted
  Payments

  	
  76

  
	
  Section 5.10 Negative
  Pledge

  	
  78

  
	
  Section 5.11
  Consolidations and Mergers

  	
  81

  
	
  Section 5.12
  [Intentionally omitted.]

  	
  81

  
	
  Section 5.13 Cash Flow
  Coverage

  	
  81

  
	
  Section 5.14 Recourse
  Debt to Cash Flow Ratio

  	
  82

  
	
  Section 5.15 Transaction
  with Affiliates

  	
  83

  
	
  Section 5.16 Investments
  in Other Persons

  	
  84

  
	
  Section 5.17 Upstreaming
  of Net Cash Proceeds by Subsidiaries

  	
  87

  
	
  Section 5.18 Sales,
  Etc., of Assets

  	
  87

  
	
  Section 5.19 Derivative
  Obligations

  	
  90

  
	
  Section 5.20 Covenant to
  Give Security

  	
  90

  



 


ii

















 


	
  Section 5.21 Further
  Assurances

  	
  91

  
	
   

  	
   

  
	
  ARTICLE VI

  	
   

  
	
   

  	
   

  
	
  DEFAULTS

  	
   

  
	
   

  	
   

  
	
  Section 6.01 Events of
  Default

  	
  92

  
	
  Section 6.02 Notice of
  Default

  	
  94

  
	
  Section 6.03 Cash
  Collateral

  	
  94

  
	
   

  	
   

  
	
  ARTICLE VII

  	
   

  
	
   

  	
   

  
	
  THE AGENT

  	
   

  
	
   

  	
   

  
	
  Section 7.01 Appointment
  and Authorization

  	
  95

  
	
  Section 7.02 Agent and
  Affiliates

  	
  95

  
	
  Section 7.03
  Consultation with Experts

  	
  96

  
	
  Section 7.04 Liability
  of Agent and Collateral Agent

  	
  96

  
	
  Section 7.05
  Indemnification

  	
  96

  
	
  Section 7.06 Credit
  Decision

  	
  97

  
	
  Section 7.07 Successor
  Agent or Collateral Agent

  	
  97

  
	
  Section 7.08 Administrative
  Agent May File Proofs of Claim

  	
  98

  
	
  Section 7.09 Agents’ Fee

  	
  98

  
	
  Section 7.10
  [Intentionally Omitted]

  	
  98

  
	
  Section 7.11 Delivery of
  Information

  	
  98

  
	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  
	
   

  	
   

  
	
  CHANGE IN CIRCUMSTANCES

  	
   

  
	
   

  	
   

  
	
  Section 8.01 Basis for
  Determining Interest Rate Inadequate or Unfair

  	
  100

  
	
  Section 8.02 Illegality

  	
  100

  
	
  Section 8.03 Increased
  Cost and Reduced Return

  	
  101

  
	
  Section 8.04 Taxes

  	
  102

  
	
  Section 8.05 Base Rate
  Loans Substituted for Affected Euro-Dollar Loans

  	
  105

  
	
   

  	
   

  
	
  ARTICLE IX

  	
   

  
	
   

  	
   

  
	
  SUBSIDIARY GUARANTY

  	
   

  
	
   

  	
   

  
	
  Section 9.01 The
  Subsidiary Guaranty

  	
  105

  
	
  Section 9.02 Guaranty
  Absolute

  	
  106

  
	
  Section 9.03 Discharge
  Only Upon Payment in Full, Reinstatement in Certain Circumstances

  	
  107

  
	
  Section 9.04 Revolving
  L/C Cash Collateral Account

  	
  107

  
	
  Section 9.05 Waiver by
  the Subsidiary Guarantors

  	
  108

  
	
  Section 9.06 Subrogation

  	
  108

  
	
  Section 9.07 Stay of
  Acceleration

  	
  108

  
	
  Section 9.08 Limitation
  of Liability

  	
  109

  



 


iii

















 


	
  Section 9.09 Release of
  Subsidiary Guarantors

  	
  109

  
	
  Section 9.10 Representations
  and Warranties

  	
  109

  
	
  Section 9.11 Covenants

  	
  109

  
	
   

  	
   

  
	
  ARTICLE X

  	
   

  
	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  Section 10.01 Notices

  	
  109

  
	
  Section 10.02 No Waivers

  	
  110

  
	
  Section 10.03 Expenses;
  Indemnification

  	
  110

  
	
  Section 10.04 Sharing of
  Set-offs

  	
  110

  
	
  Section 10.05 Amendments
  and Waivers

  	
  111

  
	
  Section 10.06 Successors
  and Assigns

  	
  112

  
	
  Section 10.07 No Margin
  Stock

  	
  115

  
	
  Section 10.08 Governing
  Law; Submission to Jurisdiction

  	
  115

  
	
  Section 10.09 Release of
  Collateral

  	
  115

  
	
  Section 10.10
  Counterparts; Integration; Effectiveness

  	
  116

  
	
  Section 10.11
  Confidentiality

  	
  116

  
	
  Section 10.12 WAIVER OF
  JURY TRIAL

  	
  116

  
	
  Section 10.13
  Severability; Modification to Conform to Law

  	
  117

  
	
  Section 10.14 Judgment
  Currency

  	
  117

  
	
  Section 10.15 Revolving
  Fronting Banks

  	
  117

  
	
  Section 10.16
  Replacement of Banks

  	
  118

  



 


iv

















 


	
  Appendix I

  	
  —

  	
  Revolving Credit Loan Facility

  
	
   

  	
   

  	
   

  
	
  Appendix II

  	
  —

  	
  Initial Term Loan Facility

  
	
   

  	
   

  	
   

  
	
  Appendix III

  	
  —

  	
  Existing Letters of Credit

  
	
   

  	
   

  	
   

  
	
  Schedule I

  	
  —

  	
  Pledged Subsidiaries

  
	
   

  	
   

  	
   

  
	
  Schedule II

  	
  —

  	
  Assigned Agreements

  
	
   

  	
   

  	
   

  
	
  Schedule III

  	
  —

  	
  Non-Pledged Subsidiaries

  
	
   

  	
   

  	
   

  
	
  Schedule IV

  	
  —

  	
  Excluded AES Entities

  
	
   

  	
   

  	
   

  
	
  Schedule 5.15

  	
  —

  	
  Existing Agreements with Affiliates

  
	
   

  	
   

  	
   

  
	
  Schedule V

  	
  —

  	
  Qualified Holding Companies

  
	
   

  	
   

  	
   

  
	
  Schedule VI

  	
  —

  	
  Existing Debt

  
	
   

  	
   

  	
   

  
	
  Schedule VII

  	
  —

  	
  Revolving Fronting Banks

  
	
   

  	
   

  	
   

  
	
  Exhibit A-1

  	
  —

  	
  Form of Revolving Credit Loan Note

  
	
   

  	
   

  	
   

  
	
  Exhibit A-2

  	
  —

  	
  Form of Term Loan Note

  
	
   

  	
   

  	
   

  
	
  Exhibit B-1

  	
  —

  	
  Form of Opinion of the General Counsel
  of the Borrower

  
	
   

  	
   

  	
   

  
	
  Exhibit B-2

  	
  —

  	
  Form of Opinion of Davis
  Polk & Wardwell, Special Counsel for the Borrower

  
	
   

  	
   

  	
   

  
	
  Exhibit B-3

  	
  —

  	
  Form of Opinion of Special Counsel for
  certain Subsidiaries of the Borrower

  
	
   

  	
   

  	
   

  
	
  Exhibit B-4

  	
  —

  	
  Form of Opinion of Morris, Nichols,
  Arsht & Tunnell, Delaware counsel for the Borrower

  
	
   

  	
   

  	
   

  
	
  Exhibit B-5

  	
  —

  	
  Form of Opinion of Maples and Calder,
  Cayman Islands counsel for the Borrower

  
	
   

  	
   

  	
   

  
	
  Exhibit B-6

  	
  —

  	
  Form of Opinion of Conyers
  Dill & Pearman, British Virgin Islands counsel for the Borrower

  
	
   

  	
   

  	
   

  
	
  Exhibit B-7

  	
  —

  	
  Form of Opinion of Shearman &
  Sterling, Special Counsel for the Agent

  
	
   

  	
   

  	
   

  
	
  Exhibit C-1

  	
  —

  	
  Form of Revolving Credit Loan Facility
  Assignment and Assumption Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit C-2

  	
  —

  	
  Form of Term Loan Facility Assignment
  and Assumption Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit C-3

  	
  —

  	
  Form of Third Party Fronting Bank
  Assignment and Assumption Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit D

  	
  —

  	
  Form of Revolving Fronting Bank
  Agreement

  



 


v

















 


FOURTH AMENDED AND RESTATED CREDIT AND


REIMBURSEMENT AGREEMENT


 


FOURTH
AMENDED AND RESTATED CREDIT AND REIMBURSEMENT AGREEMENT dated as of July 29,
2008 (this “Agreement”) among THE
AES CORPORATION, a Delaware corporation (the “Borrower”),
the SUBSIDIARY GUARANTORS listed herein, the BANKS listed on the signature pages hereof,
CITIGROUP GLOBAL MARKETS INC., as Lead Arranger and Book Runner, BANC OF
AMERICA SECURITIES LLC, as Lead Arranger and Book Runner and as Co-Syndication
Agent (for the Initial Term Loan Facility (as hereinafter defined)), DEUTSCHE
BANK SECURITIES INC, as Lead Arranger and Book Runner (for the Initial Term
Loan Facility), UNION BANK OF CALIFORNIA, N.A., as Co-Syndication Agent (for
the Initial Term Loan Facility) and as Lead Arranger and Book Runner and as
Syndication Agent (for the Revolving Credit Loan Facility (as hereinafter
defined)),  LEHMAN COMMERCIAL PAPER
INC.,  as Co-Documentation Agent
(Initial Term Loan Facility), UBS SECURITIES LLC, as Co-Documentation Agent
(Initial Term Loan Facility), SOCIÉTÉ GÉNÉRALE, as Co-Documentation Agent
(Revolving Credit Loan Facility), CREDIT LYONNAIS NEW YORK BRANCH, as
Co-Documentation Agent (Revolving Credit Loan Facility), CITICORP USA, INC., as
Administrative Agent for the Bank Parties (the “Agent”) and CITIBANK, N.A., as Collateral Agent for the Bank
Parties (the “Collateral Agent”).


 


PRELIMINARY
STATEMENTS:


 


1.             The
Borrower is party to a Third Amended and Restated Credit and Reimbursement
Agreement dated as of March 17, 2004 (as amended, amended and restated,
supplemented or otherwise modified up to the date hereof, the “Existing Bank Credit Agreement”) among the
subsidiary guarantors listed therein, the banks listed on the signatures pages thereof,
Citigroup Global Markets, Inc., as Lead Arranger and Book Runner, Banc of
America Securities LLC, as Lead Arranger and Book Runner and as Co-Syndication
Agent (term loan facility), Deutsche Bank Securities Inc., as Lead Arranger and
Book Runner (term loan facility), Union Bank of California, N.A., as
Co-Syndication Agent (term loan facility) and as Lead Arranger and Book Runner
and as Syndication Agent (Revolving Credit Loan Facility),  Lehman Commercial Paper Inc.,  as Co-Documentation Agent (term loan
facility), UBS Securities LLC, as Co-Documentation Agent (term loan facility),
Société Générale, as Co-Documentation Agent (Revolving Credit Loan Facility),
Credit Lyonnaise New York Branch, as Co-Documentation Agent (Revolving Credit
Loan Facility), Citicorp USA, Inc., as Administrative Agent for the Bank
Parties and Citibank, N.A., as Collateral Agent for the bank parties.


 


2.             The
Borrower wishes to amend and restate the Existing Bank Credit Agreement to,
among other things, restructure certain provisions of the Existing Bank Credit
Agreement.


 


NOW, THEREFORE, in consideration of the premises and
of the mutual covenants and agreements contained herein, the parties hereto
hereby agree to amend and restate the Existing Bank Credit Agreement, and the
Existing Bank Credit Agreement is hereby amended and restated, in its entirety
as follows:


 


AES Fourth Amended and
Restated Credit Agreement


 

















 


ARTICLE
I



DEFINITIONS


 


Section 1.01 Definitions.


 


The following terms, as used herein, have the following meanings:


 


“Actionable Default” means an Event of
Default described in clauses (a), (g) and (h) of Section 6.01.


 


“Acquired Debt” means Debt of a Person
existing at the time the Person merges with or into any Subsidiary or becomes a
Subsidiary and not incurred in connection with, or in contemplation of, such
merger or such Person becoming a Subsidiary.


 


“Additional Collateral Trust Agreement Collateral”
means the “Additional Collateral” referred to in the Collateral Trust
Agreement.


 


“Additional Term Loan Bank” means any
Eligible Assignee who agrees, in accordance with the provisions of Section 2.17,
to commit to one of the Term Loan Facilities existing at the time of the
request for a Commitment Increase.


 


“Adjusted London
Interbank Offered Rate” means, for any Interest Period and
subject to Section 2.02(a)(iv), a rate per annum equal to the quotient
obtained (rounded upward, if necessary, to the next higher 1/100th
of 1%) by dividing (i) the applicable London Interbank Offered Rate by (ii) 1.00
minus the Euro-Dollar Reserve
Percentage.


 


“Adjusted Parent Operating Cash Flow”  means, for any period, (i) Parent
Operating Cash Flow for such period less
(ii) the sum of the following expenses (determined without duplication),
in each case to the extent paid by the Borrower during such period in cash and
regardless of whether any such amount was accrued during such period:


 


(A)  income
tax expenses of the Borrower and its Subsidiaries; and


 


(B)   corporate
overhead expenses (including rental expense of the Borrower).


 


“Administrative
Questionnaire”  means,
with respect to each Bank Party, an administrative questionnaire in the form
prepared by the Agent and submitted to the Agent (with a copy to the Borrower)
duly completed by such Bank.


 


“Adverse Alternative Currency Letters of Credit”
has the meaning set forth in Section 2.16.


 


“AES”
means The AES Corporation, a Delaware corporation, and its successors.


 


“AES Business”
shall have the meaning set forth in Section 5.07(b)(ii).


 


AES Fourth Amended and
Restated Credit Agreement


 


2

















 


“AES BVI II” means AES International
Holdings II, Ltd., a company organized under the laws of the British
Virgin Islands.


 


“AES Electric”  means Applied Energy Services
Electric Limited, an English corporation, and its successors.


 


“AES Hawaii
Management” means AES Hawaii Management Company, Inc., a
Delaware corporation and a Subsidiary of the Borrower, and its successors.


 


“AES Management
Group” means (i) individuals who are members of the
board of directors or officers of the Borrower or the president of any Material
AES Entity; (ii) their respective spouses, children, grandchildren,
siblings and parents; (iii) trusts established for the sole or principal
benefit of Persons described in clauses (i) and (ii) above; (iv) heirs,
executors, administrators and personal or legal representatives of Persons
described in clauses (i) and (ii) above; and (v) any
corporation or other Person that is controlled by, and a majority of the equity
interests in which are directly owned by, Persons described in clauses (i) and
(ii) above.


 


“AES New York” means AES New York Funding,
L.L.C., a Delaware limited liability company and a wholly-owned Subsidiary of
the Borrower, and its successors.


 


“AES Oklahoma”  means AES Oklahoma Holdings,
L.L.C., a Delaware limited liability company and a Subsidiary of the Borrower,
and its successors.


 


“AES Sonel”
means AES-SONEL S.A., a société anonyme organised and existing under the laws
of Cameroon.


 


“AES Warrior Run”  means AES Warrior Run Funding,
L.L.C., a Delaware limited liability company and a Wholly-Owned Consolidated
Subsidiary of the Borrower, and its successors.


 


“Affiliate”
means (i) any Person that directly, or indirectly through one or more
intermediaries, controls the Borrower (a “Controlling
Person”), or (ii) any Person (other than the Borrower or a
Subsidiary) which is controlled by or is under common control with a
Controlling Person or (iii) as to any Person (other than the Borrower and
its Subsidiaries), any other Person that, directly or indirectly, controls, is
controlled by or is under common control with such Person or is a director or
officer of such Person.  As used herein,
the term “control” means possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.


 


“Agent”
means Citicorp USA, Inc., in its capacity as administrative agent for the
Bank Parties hereunder, and its successors in such capacity.


 


“Agreement”  has the meaning specified in the
recital of the parties to this Agreement.


 


“Alternative
Currency” means (i) any lawful currency (other than Dollars)
that is freely transferable and convertible into Dollars or (ii) with
respect to any Revolving Letter of 


 


AES Fourth Amended and
Restated Credit Agreement


 


3

















 


Credit issued by a Revolving Fronting Bank, any other
lawful currency (other than Dollars) that such Revolving Fronting Bank agrees
may be used as the designated currency of such Revolving Letter of Credit; provided that such Revolving Fronting Bank
is able to provide, and continues to provide, to the Agent the information
required pursuant to Section 2.15(b) with respect to such Revolving
Letter of Credit.


 


“Alternative
Currency Letter of Credit” means any Revolving Letter of
Credit having a stated amount denominated in an Alternative Currency.


 


“Amendment No. 2 to the Collateral Trust Agreement”
means Amendment No. 2 to the Collateral Trust Agreement dated as of the
Effective Date, by and among each grantor thereunder, the Representatives (as
defined in the Collateral Trust Agreement) and the Corporate Trustee.


 


“Amendment and Restatement Effective Date” means the date
that Amendment No. 13 to the Existing Bank Credit Agreement, dated as of July 29,
2008, becomes effective in accordance with Section 2 thereof.


 


“Applicable
Lending Office”  means,
with respect to any Bank Party, (i) in the case of its Base Rate Loans,
its Domestic Lending Office and (ii) in the case of its Euro-Dollar Loans,
its Euro-Dollar Lending Office.


 


“Applicable Revolving Margin”  means, on any date, the percentage set
forth in the table below based on the ratings assigned to the Facilities on
such date by Moody’s Investors Service, Inc. and Standard & Poor’s
Ratings Services:


 


	
  Rating (Moody’s/S&P)

  	
   

  	
  Margin

  	
   

  
	
  Ba1 (or
  higher)/BB+ (or higher)

  	
   

  	
  1.50

  	
  %

  
	
  Ba2/BB

  	
   

  	
  1.75

  	
  %

  
	
  Ba3/BB-

  	
   

  	
  2.00

  	
  %

  
	
  B1 (or lower)/B+
  (or lower)

  	
   

  	
  2.50

  	
  %

  



 


If the
Facilities are rated by only one such rating agency, the rating of such rating
agency shall be used in determining the Applicable Revolving Margin.  If the Facilities are rated by both such
rating agencies and (x) the ratings differential is one level, the lower
rating will apply or (y) the ratings differential is two levels or more,
the midpoint rating will apply; provided
that if there is no midpoint rating, the lower of the two intermediate ratings
surrounding the midpoint will apply.  If
the Facilities are not rated by either of such rating agencies, the Facilities
shall be deemed to be rated one level higher than (i) in the case of Moody’s
Investors Service Inc., the Borrower’s corporate family rating and (ii) in
the case of Standard & Poor’s Rating Services, the Borrower’s
corporate credit rating and, in each case, the rules of the preceding two
sentences shall apply to such deemed ratings. 
If the Facilities are not rated (or deemed rated in accordance with the
preceding sentence) by either or such rating agencies, the Applicable Revolving
Margin shall be 2.50%.


 


AES Fourth Amended and
Restated Credit Agreement


 


4
















 


“Arranger Parties” means Citigroup Global
Markets Inc., as Lead Arranger and Book Runner, Banc of America Securities LLC,
as Lead Arranger and Book Runner and as Co-Syndication Agent (Initial Term Loan
Facility), Deutsche Bank Securities Inc., as Lead Arranger and Book Runner
(Initial Term Loan Facility) and Union Bank of California, N.A., as
Co-Syndication Agent (Initial Term Loan Facility) and as Lead Arranger and Book
Runner and as Syndication Agent (Revolving Credit Loan Facility).


 


“Asset Sale” means any sale, lease, transfer
or other disposition (including any such transaction effected by way of merger
or consolidation or by way of an Equity Issuance by a Subsidiary) by the
Borrower or any of its Subsidiaries, but excluding any transactions permitted by
the provisions of Section 5.18 (other than sales of assets or Equity
Interests of, or other Investments in, IPALCO or any of its Subsidiaries or any
Subsidiary Guarantor or Subsidiary thereof permitted by subsection (iv) thereof);
provided that a disposition of
such assets not excluded during any fiscal year shall not constitute an Asset
Sale unless and until (and only to the extent that) the aggregate Net Cash
Proceeds from such disposition, when combined with all other such dispositions
previously made during such fiscal year, exceeds $10,000,000.


 


“Assigned Agreements” has the meaning set
forth in Section 4.14(d).


 


“Assignee”
has the meaning set forth in Section 10.06(c).


 


“Assignment and Assumption” means an assignment and
assumption agreement substantially in the form of Exhibit C-1, C-2 or C-3
hereto, as applicable.


 


“Assumption Agreement” has the meaning set
forth in Section 2.17(d).


 


“Automatic
Acceleration Event”  means
the occurrence, with respect to the Borrower, of any of the Events of Default listed
in clauses (g) and (h) of Section 6.01.


 


“Available Amount”
means, for any Revolving Letter of Credit on any date of determination, the
maximum aggregate amount (which, in the case of an Alternative Currency Letter
of Credit, shall be the Dollar Equivalent on such date of determination of such
amount) available to be drawn under such Revolving Letter of Credit at any time
on or after such date, the determination of such maximum amount to assume the
compliance with and satisfaction of all conditions for drawing enumerated
therein.


 


“Bank”
means each lender listed on the signature pages hereof, each Assignee
which becomes a Bank pursuant to Section 10.06(c), each Incremental Term
Loan Bank and their respective successors. 
Without limiting the generality of the foregoing sentence, the term “Banks”
shall include the Term Loan Banks.


 


“Bank Party”
means any Bank.


 


“Banks’ Ratable Share” means, in respect of
any Net Cash Proceeds, a percentage of the Creditors’ Portion equal to a
fraction (x) the numerator of which is the Total Bank Exposure at such
time and (y) the denominator of which is the sum of the Total Bank
Exposure at such time plus the
aggregate principal amount of First Priority Secured Debt, the proceeds of
which were used to permanently reduce Total Bank Exposure.


 


AES Fourth Amended and
Restated Credit Agreement


 


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“Bankruptcy Law” means any law relating to bankruptcy,
insolvency, winding up, reorganization, suspension of payments, arrangement, liquidation,
relief of debtors, receivership, compromise, amalgamation, assignment for the
benefit of creditors or composition or readjustment of debts, or any equivalent
or similar proceeding or action.


 


“Base Rate”
means, for any day, a rate per annum equal to the higher of (i) the rate
of interest publicly announced by Citicorp USA, Inc. from time to time as
its Base Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal
Funds Rate for such day.


 


“Base Rate Borrowing” has the meaning set forth in the
definition of “Borrowing” herein.


 


“Base Rate Loan”
means a Loan which bears interest at the Base Rate pursuant to the applicable
Notice of Borrowing or Notice of Interest Rate Election or the provisions of Section 2.07(a) or
Article 8 plus the Base Rate
Margin.


 


“Base Rate Margin” means (i) in respect
of the Revolving Credit Loans, a rate per annum equal to the Applicable
Revolving Margin less 1.00%, (ii) in
respect of the Initial Term Loans, a rate per annum equal to 0.75% (subject to
the provisions of Section 2.06(f) hereof), and (iii) in respect
of the Incremental Term Loan Facility, a rate per annum to be agreed to by the
Borrower, the Agent and the Incremental Term Loan Banks.


 


“Benefit
Arrangement”  means,
at any time, an employee benefit plan within the meaning of Section 3(3) of
ERISA which is not a Plan or a Multiemployer Plan and which is maintained or
otherwise contributed to by any member of the ERISA Group.


 


“Borrower” has the meaning specified in the recital of the
parties to this Agreement.


 


“Borrowing”  means (i) a borrowing
hereunder consisting of Revolving Credit Loans made to the Borrower at the same
time by the Revolving Credit Loan Banks pursuant to Section 2.01(a) or
(ii) a borrowing hereunder consisting of Incremental Term Loans made to
the Borrower at the same time by the Incremental Term Loan Banks pursuant to Section 2.17.  A Borrowing is a “Base Rate Borrowing” if such Loans are Base Rate Loans or a “Euro-Dollar Borrowing” if such Loans are
Euro-Dollar Loans.


 


“Bridge Debt” means any Debt incurred
pursuant to Section 5.07(b)(iv) relating to a bridge financing of any
Asset Sale.


 


“Business Day” means either (i) a Domestic Business Day
or (ii) a Euro-Dollar Business Day, as applicable.


 


“BVI Cayman Pledge Agreement” means the
Pledge Agreement dated as of December 12, 2002, made by AES BVI II in
favor of the Collateral Trustees.


 


“BVI Collateral” means the “Collateral”
referred to in the BVI Cayman Pledge Agreement.


 


AES Fourth Amended and
Restated Credit Agreement


 


6

















 


“Cameroon Business” means any AES Business located in the
Republic of Cameroon, including, without limitation, AES Sonel.


 


“Capital Commitment” means any contractual commitment or
obligation under an equity contribution or other agreement the primary purpose
of which is for the Borrower to provide to an AES Business a portion of the
capital required to finance construction projects, the acquisition of
additional assets or capital improvements being undertaken by such AES Business.


 


“Capital Stock”
means, with respect to any Person, any and all shares, interests, participants
or other equivalents (however designated, whether voting or non-voting) of, or
interests in (however designated), the equity of such Person, including, without
limitation, all common stock and preferred stock and partnership and joint
venture interests of such Person.


 


“Cash Flow
Coverage Ratio” means, for any period, the ratio of (i) Adjusted
Parent Operating Cash Flow for such period to (ii) Corporate Charges for
such period.


 


“CFC” means any entity that is a controlled
foreign corporation under Section 957 of the Internal Revenue Code (or any
successor provision thereto).


 


“Closing Date”  means March 17, 2004, the date
on which the Agent received the fees and documents specified in or pursuant to Section 3.01.


 


“Collateral” means the Creditor Group
Collateral.


 


“Collateral Account” has the meaning as set
forth in the Collateral Trust Agreement.


 


“Collateral Agent” means Citibank N.A., in
its capacity as collateral agent for the Lender Parties under the Financing
Documents and its successors in such capacity.


 


“Collateral Documents” means the Security
Agreement, the Collateral Trust Agreement, the BVI Cayman Pledge Agreement and
any other agreement that creates or purports to create a Lien in favor of the
Collateral Trustees for the benefit of the Secured Holders.


 


“Collateral Trust Agreement” means the
Collateral Trust Agreement dated as of December 12, 2002 made by the
grantors thereunder in favor of the Collateral Trustees, as amended by
Amendment No. 1 dated as of July 29, 2003 and as further amended from
time to time.


 


“Collateral Trustees”  has the meaning as set forth in the
Collateral Trust Agreement.


 


“Collateral Value” means, at any time, the
aggregate book value at such time of the percentage of Equity Interests pledged
in favor of the Secured Holders (other than the Equity Interests of the
Excluded AES Entities); provided
that the book value of each Subsidiary whose Equity Interests are being pledged
shall be determined at such time (without giving effect to any accumulated
other comprehensive gain or loss) by the sum of (i) its contributed
capital less (ii) its
intercompany receivables, plus (iii) its
pre-tax retained earnings, plus (iv) its



 


AES Fourth Amended and
Restated Credit Agreement


 


7

















 


intercompany payables and less (v) dividends paid to the Borrower by such
Subsidiary; provided  further that for purposes of determining
IPALCO’s book value, IPALCO’s contributed capital shall be calculated on a
purchase accounting basis.


 


“Commitment Increase” has the meaning set
forth in Section 2.17(a).


 


“Communications” has the meaning set forth
in Section 7.11(a).


 


“Conduit Lender”  means any special purpose corporation
organized and administered by any Bank for the purpose of making Loans
hereunder otherwise required to be made by such Bank and designated by such
Bank in a written instrument, subject to the consent of the Agent and the
Borrower (which, in each case, shall not be unreasonably withheld or delayed); provided that the designation by any Bank
of a Conduit Lender shall not relieve the designating Bank of any of its
obligations to fund a Loan under the Agreement if, for any reason, its Conduit
Lender fails to fund any such Loan, and the designating Bank (and not the
Conduit Lender) shall have the sole right and responsibility to deliver all
consents and waivers required or requested under this Agreement with respect to
its Conduit Lender, and provided  further that no Conduit Lender shall (i) be
entitled to receive any greater amount pursuant to Section 8.03, 8.04 or
10.03 than the designating Lender would have been entitled to receive in
respect of the extensions of credit made by such Conduit Lender or (ii) be
deemed to have any Revolving Credit Commitment hereunder.


 


“Consolidated
Subsidiary”  means,
at any date with respect to any Person, any Subsidiary of such Person or other
entity the accounts of which would be consolidated with those of such Person in
its consolidated financial statements if such statements were prepared as of
such date.


 


“Controlling Person” has the meaning set forth in the
definition of “Affiliate” herein.


 


“Corporate Charges”  means, for any period, the sum of
the following amounts (determined without duplication), in each case to the
extent paid in cash by the Borrower during such period and regardless of
whether any such amount was accrued during such period:


 


(i)            interest expense of
the Borrower for such period:


 


(A)          including, without limitation, interest
expense attributable to (x) the accretion of original issue discount on
Debt issued at less than face value thereof and (y) any interest added to
the principal amount of Debt; but


 


(B)           excluding
any interest expense to the extent that (x) the Borrower has the option or
obligation to pay or satisfy such interest expense by the issuance of Capital
Stock of the Borrower or other securities of the Borrower which would not
constitute Recourse Debt and (y) the Borrower has not paid or satisfied
such interest expense during such period with cash or by the issuance of
Recourse Debt;


 


AES Fourth Amended and
Restated Credit Agreement


 


8

















 


(ii)           regularly
scheduled dividend (including cumulative payments made as a result of any
deferral) payments paid on the Borrower’s Redeemable Stock during such period;


 


(iii)          regularly
scheduled dividend (including cumulative payments made as a result of any
deferral) payments paid on Trust Preferred Securities during such period; and


 


(iv)          regularly scheduled
dividend (including cumulative payments made as a result of any deferral)
payments paid on the Borrower’s preferred stock or Hybrid Securities during
such period.


 


“Corporate Trustee” means Wilmington Trust
Company, a Delaware banking corporation, as Corporate Trustee under the
Collateral Trust Agreement and any successor in such capacity.


 


“Covered Transaction” has the meaning set forth in the
definition of “Net Cash Proceeds” herein.


 


“Credit Agreement Documents” has the meaning
set forth in the Collateral Trust Agreement.


 


“Credit Party” has the meaning set forth in Section 8.03.


 


“Creditor Group Collateral” means the
Security Agreement Collateral, the Additional Collateral Trust Agreement
Collateral and the BVI Collateral.


 


“Creditors’ Portion” means, in respect of
any Net Cash Proceeds, (i) 60% of such Net Cash Proceeds at any time that
the Recourse Debt to Cash Flow Ratio is greater than or equal to 5.0:1.0 or (ii) 50%
of such Net Cash Proceeds at any time that the Recourse Debt to Cash Flow Ratio
is less than 5.0:1.0.


 


                                “Debt”  of any Person means at any date,
without duplication, (i) all Obligations of such Person for borrowed
money; (ii) all Obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments; (iii) all Obligations of such Person
to pay the deferred purchase price of property or services, except trade
accounts payable arising in the ordinary course of business; (iv) all
Obligations of such Person as lessee which are capitalized in accordance with
generally accepted accounting principles; (v) all Obligations (whether
contingent or non-contingent) of such Person to reimburse any bank or other
Person in respect of amounts paid under a letter of credit, surety or performance
bond or similar instrument; (vi) all Debt secured by a Lien on any asset
of such Person, whether or not such Debt is otherwise an obligation of such
Person; (vii) all Debt of others Guaranteed by such Person and (viii) all
Redeemable Stock of such Person valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends.  For purposes hereof, contingent obligations
of the type described in clause (v) of this definition with respect
to letters of credit not issued hereunder shall not be treated as “Debt”
hereunder to the extent that such obligations are cash collateralized or to the
extent that the issuer of any such letter of credit is entitled to draw under a



 


AES Fourth Amended and
Restated Credit Agreement


 


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Revolving Letter of Credit issued hereunder which by
its terms requires that Revolving L/C Drawings under such letter of credit be
applied only to reimburse such issuer for amounts paid by such issuer under
such letter of credit.  The obligations
of the Borrower under any Capital Commitment or under any agreement, in the
form of indemnity or contingent equity contribution agreement or otherwise,
pursuant to which the Borrower agrees to protect any Person, in whole or in
part, from tax liabilities, environmental liabilities, political risks,
including currency convertibility and transferability risk and changes in law, or construction cost overruns shall not
constitute Debt.  For the avoidance of doubt, Qualified Equity-Linked or Hybrid Securities
shall not be considered Debt for any purpose of this Agreement (other than for
purposes of the definition of Material Debt and Section 6.01 hereof).


 


“Default”  means any condition or event which
constitutes an Event of Default or which with the giving of notice or lapse of
time or both would, unless cured or waived, become an Event of Default.


 


“Derivatives
Obligations” of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, credit
derivative transaction, foreign exchange transaction, cap transaction, floor transaction,
collar transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including any
option with respect to any of the foregoing transactions) or any combination of
the foregoing transactions; provided
that Derivatives Obligations shall not include any obligations of such Person
in relation to an equity forward contract, equity or equity index swap or
equity or equity index option pertaining, linked or indexed to the common stock
of such Person or any affiliate thereof. 
For purposes of determining the aggregate amount of Derivative
Obligations on any date or the Recourse Debt to Cash Flow Ratio on any date,
the Derivative Obligations of the applicable Person in respect of any Hedge Agreement
shall be the maximum aggregate amount (after giving effect to any netting
agreements to the extent such netting agreements are with the same Person to
whom any such Derivative Obligations are owed or with Affiliates of such
Person) that the applicable Person would be required to pay if such Hedge
Agreement were terminated at such time.


 


“Direct Exposure” has the meaning set forth
in Section 2.14(c).


 


“Disclosed Matters” means matters disclosed in any SEC
Filings made prior to March 15, 2004 or in written materials sent by or on
behalf of the Borrower to all of the Bank Parties prior to March 15, 2004.


 


“Dollar Equivalent”
means, on any date of determination with respect to any Alternative Currency
Letter of Credit, (i) in calculating the maximum aggregate amount
available to be drawn under such Alternative Currency Letter of Credit at any
time on or after such date, the amount thereof in Dollars most recently
reported to the Agent pursuant to Section 2.15 in calculating the amount
of any Revolving L/C Drawing under such Alternative Currency Letter of Credit,
the aggregate amount of Dollars paid by the relevant Revolving Fronting Bank to
purchase the Alternative Currency paid by such Revolving Fronting Bank in
respect of such Revolving L/C Drawing.


 


AES Fourth Amended and
Restated Credit Agreement


 


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“Dollars” has the meaning set forth in Section 2.16.


 


“Domestic Business
Day” means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized by law to close.


 


“Domestic Lending
Office”  means,
as to each Bank Party, its office located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative Questionnaire
as its Domestic Lending Office) or such other office as such Bank Party may
hereafter designate as its Domestic Lending Office by notice to the Borrower
and the Agent.


 


“Effective Date”
means March 17, 2004, the date the Existing Bank Credit Agreement became
effective in accordance with Section 10.10 of the Existing Bank Credit
Agreement.


 


“Eligible Assignee” means any commercial
bank or financial institution (including, without limitation, any fund that
regularly invests in loans similar to the Term Loans) as approved (which approval
shall be required only so long as no Event of Default has occurred and is
continuing at the time of an assignment) by the Borrower (such approval not to
be unreasonably withheld or delayed); provided, however, that neither any Loan Party nor
any Subsidiary of a Loan Party shall qualify as an Eligible Assignee under this
definition.


 


“Environmental
Laws”  means any
and all federal, state, local and foreign statutes, laws, judicial decisions,
regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions,
permits, concessions, grants, franchises, licenses, agreements and other
governmental restrictions relating to the environment, the effect of the
environment on human health or to emissions, discharges or releases of
pollutants, contaminants, Hazardous Substances or wastes into the environment,
including, without limitation, ambient air, surface water, ground water or
land, or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants,
contaminants, Hazardous Substances or wastes or the clean-up or other
remediation thereof.


 


“Equity Credit Preferred Securities” means,
at any date:


 


(i)            Debt
of the Borrower (A) that is owed to a Special Purpose Financing Subsidiary
of the Borrower; (B) that is issued in connection with the issuance by
such Special Purpose Financing Subsidiary of Existing Trust Preferred
Securities; (C) that is subordinated in right of payment to other Debt of
the Borrower of at least the types and to at least the extent as was, on the
date of issuance thereof, the Junior Subordinated Debentures issued by AES in
connection with the issuance by AES Trust III of its $3.375 Term
Convertible Securities, Series C, on October 7, 1999 (or otherwise
satisfactory to the Agent); and (D) as to which, at such date, AES has the
right to defer the payment of all interest for the period of at least 19
consecutive quarters beginning at such date; and


 


(ii)           Guarantees
by the Borrower of the obligations of the issuer of any Existing Trust
Preferred Securities in respect of such Existing Trust Preferred Securities;
and


 


AES Fourth Amended and
Restated Credit Agreement


 


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(iii)          Mandatorily
convertible securities (such as those known as “DECS” (including tax deductible
DECS)) consisting of Debt of the Borrower that is subordinated in right of
payment to other Debt of the Borrower of at least the types and to at least the
extent as was, on the date of issuance thereof, the Junior Subordinated
Debentures issued by the Borrower in connection with the issuance by AES
Trust III of its $3.375 Term Convertible Securities, Series C, on October 7,
1999, (or otherwise satisfactory to the Agent) and which is mandatorily
convertible into, or redeemable with the proceeds of, Capital Stock of the
Borrower (other than Redeemable Stock).


 


“Equity Interest” means, with respect to any
Person, shares of capital stock of (or other ownership or profit interests in)
such Person, warrants, options or other rights for the purchase or other
acquisition from such Person of shares of capital stock of (or other ownership
or profit interests in) such Person, securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase or
other acquisition from such Person of such shares (or such other interests),
and other ownership or profit interests in such Person (including, without
limitation, partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such shares, warrants, options, rights or other
interests are authorized or otherwise existing on any date of determination; provided that Equity Interest shall not include
Trust Preferred Securities (other than the Existing Trust Preferred Securities)
or any debt security that constitutes Debt and is convertible into, or
exchangeable for, Equity Interests.


 


“Equity Issuances” means, in respect of any Person, the issuance
or sale of Equity Interests of such Person other than any such issuance to
directors, officers or employees pursuant to employee benefit plans in the
ordinary course of business (including by way of exercise of stock options).


 


“ERISA”  means the Employee Retirement
Income Security Act of 1974, as amended, or any successor statute.


 


“ERISA Group”  means the Borrower, its
Subsidiaries and all members of a controlled group of corporations and all
trades or businesses (whether or not incorporated) under common control which,
together with the Borrower or any of its Subsidiaries, are treated as a single
employer under Section 414 of the Internal Revenue Code.


 


“Euro-Dollar Borrowing” has the meaning set forth in the
definition of “Borrowing” herein.


 


“Euro-Dollar
Business Day” means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.


 


“Euro-Dollar Default Rate” has the meaning
set forth in Section 2.06(c).


 


“Euro-Dollar Lending
Office” means, as to each Bank Party, its office, branch or
affiliate located at its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Euro-Dollar Lending
Office) or such other office, branch or 


 


AES Fourth Amended and
Restated Credit Agreement


 


12

















 


affiliate of such Bank Party as it may hereafter
designate as its Euro-Dollar Lending Office by notice to the Borrower and the
Agent.


 


“Euro-Dollar Loan”
means a Loan which bears interest at the Adjusted London Interbank Offered Rate
pursuant to the applicable Notice of Borrowing or Notice of Interest Rate
Election plus the Euro-Dollar
Margin.


 


“Euro-Dollar
Margin” means (i) in respect of the Revolving Credit
Loans, a rate per annum equal to the Applicable Revolving Margin, (ii) in
respect of the Initial Term Loans, a rate per annum equal to 1.75% (subject to
the provisions of Section 2.06(f) hereof) and (iii) in respect
of the Incremental Term Loan Facility, a rate per annum to be agreed to by the
Borrower, the Agent and the Incremental Term Loan Banks.


 


“Euro-Dollar
Reserve Percentage” means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of “Eurocurrency liabilities” (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or
other assets which includes loans by a non-United States office of any Bank to
United States residents).  The Adjusted
London Interbank Offered Rate shall be adjusted automatically on and as of the
effective date of any change in the Euro-Dollar Reserve Percentage.


 


“Event of Default”
has the meaning set forth in Section 6.01.


 


“Excess Revolving L/C Collateral” has the
meaning set forth in Section 2.14(d).


 


“Exchange Note Holders” means the holders of
the Senior Secured Exchange Notes.


 


“Excluded AES Business” means any AES
Business located in Brazil or Argentina; provided
that the Borrower may by written notice to the Agent make an election not to
treat one or more AES Businesses in Brazil or Argentina as an “Excluded AES
Business”.  Once the Borrower elects not
to treat an AES Business as an “Excluded AES Business” it may not thereafter
change or revoke such election with respect to such AES Business without the
consent of the Required Banks.


 


“Excluded AES Entity” means any Person set
forth on Schedule IV, as such Schedule IV may be updated pursuant to Section 5.01(l)(2) whose
assets consist only of any of the Excluded AES Businesses and direct or
indirect Investments therein.


 


“Existing Bank Credit Agreement” has the meaning set forth in
the first preliminary statement hereto.


 


“Existing Letter of Credit”  means a  “Letter of Credit”  (as defined in the Former Bank Credit Agreement) issued under
the Former Bank Credit Agreement that was 


 


AES Fourth Amended and
Restated Credit Agreement


 


13

















 


outstanding on the Effective Date and listed on
Appendix III under the heading “Existing
Revolving Letters of Credit”.


 


“Existing Trust
Preferred Securities”  means
(i) the $3.375 Trust Preferred Securities, Series C issued by AES
Trust III on October 7, 1999 and (ii) the $3.00 Trust
Convertible Preferred Securities issued by AES Trust VII on May 17,
2000.


 


“Extension of
Credit”  means (i) a
Borrowing pursuant to Section 2.01 or Section 2.17 or (ii) the
issuance of a Revolving Letter of Credit pursuant to Section 2.03.


 


“Facilities” means the Revolving Credit Loan
Facility, the Initial Term Loan Facility and any Incremental Term Loan Facility
made available to the Borrower pursuant to Section 2.17.


 


“Federal Funds
Rate”  means, for
any day, the rate per annum (rounded upward, if necessary, to the nearest 1/100th
of 1%) equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Domestic Business Day next succeeding such day; provided that (i) if such day is not
a Domestic Business Day, the Federal Funds Rate for such day shall be such rate
on such transactions on the next preceding Domestic Business Day as so
published on the next succeeding Domestic Business Day and (ii) if no such
rate is so published on such next succeeding Domestic Business Day, the Federal
Funds Rate for such day shall be the average rate quoted to Citicorp USA, Inc.
on such day on such transactions as determined by the Agent.


 


“Financing
Documents”  means
this Agreement, the Collateral Documents and the Notes.


 


“Financing Parties” means (i) the Bank
Parties hereunder and (ii) Exchange Note Holders.


 


“First Priority Secured Debt” means Debt of
the Borrower secured by a first-priority lien on the Creditor Group Collateral
(subject to the limitations set forth in Section 5.10(p)), provided that Debt owed to an Affiliate of
the Borrower shall not be First-Priority Secured Debt.


 


“Foreign Subsidiary” means a Pledged
Subsidiary or a Subsidiary of a Pledged Subsidiary (other than an Excluded AES
Entity) organized under the laws of a jurisdiction other than the United States
or any State thereof.


 


“Form 10-K” means the Borrower’s annual
report on Form 10-K for the year ended December 31, 2003, as filed
with the Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1934.


 


“Form 10-Q” means the Borrower’s
quarterly report on Form 10-Q for the quarter ended September 30,
2003, as filed with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934.


 


AES Fourth Amended and
Restated Credit Agreement


 


14
















 


“Former Bank Credit Agreement” means the “Existing Bank
Credit Agreement” as defined in the Existing Bank Credit Agreement.


 


“GAAP” has the meaning set forth in Section 1.02.


 


“Group of Loans”  means, at any time, a group of
Loans consisting of (i) all Loans which are Base Rate Loans at such time
or (ii) all Euro-Dollar Loans having the same Interest Period at such
time; provided that if a Loan of
any particular Bank is converted to or made as a Base Rate Loan pursuant to Article 8,
such Loan shall be included in the same Group or Groups of Loans from time to
time as it would have been in if it had not been so converted or made.


 


“Guarantee”  by any Person means any obligation,
contingent or otherwise, of such Person directly or indirectly guaranteeing any
Debt or other obligation of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt or other obligation (whether
arising by virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay or to maintain
financial statement conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided
that the term Guarantee shall not include endorsements for collection or
deposit in the ordinary course of business or, for the avoidance of doubt,
obligations of the Borrower to provide capital to an AES Business under a
Capital Commitment.  The term “Guarantee”
used as a verb has a corresponding meaning.


 


“Guaranteed Obligations” has the meaning set forth in Section 9.01.


 


“Hazardous Substances” means any toxic,
radioactive, caustic or otherwise hazardous substance, including petroleum, its
derivatives, by-products and other hydrocarbons, or any substance having any
constituent elements displaying any of the foregoing characteristics.


 


“Hedge Agreement” means any contract,
instrument or agreement in respect of Derivative Obligations.


 


“Hedge Bank” means any Bank Party or an
Affiliate of a Bank Party in its capacity as a party to a Secured Hedge
Agreement.


 


“Hybrid Securities” means, with respect to any Person, any
securities of such Person that, at the time of issuance, received at least two
of the following treatments: (a) “intermediate equity content” or better
equity treatment from Standard & Poor’s Rating Services, (b) “Basket
C Equity Credit” or better equity treatment from Moody’s Investors Service, Inc.
and (c) “Class C- Moderate Equity Content” or better equity treatment
from Fitch Ratings; provided that
to the extent any such category of a rating agency is no longer in existence,
the applicable references in this definition shall be deemed to be a reference
to the nearest equivalent category of such rating agency.


 


“Increase Commitment Date” has the meaning
set forth in Section 2.17(b).


 


AES Fourth Amended and
Restated Credit Agreement


 


15

















 


“Increase Date” has the meaning set forth in
Section 2.17(a).


 


“Incremental Term Loan” means each term loan
made by an Incremental Term Loan Bank under the Incremental Term Loan Facility
in accordance with the terms of Section 2.17.


 


“Incremental Term Loan Bank” means each Bank
(including any Additional Term Loan Bank) having an Incremental Term Loan.


 


“Incremental Term Borrowings” means a
borrowing consisting of simultaneous Incremental Term Loans of the same type
made by the Incremental Term Loan Banks.


 


“Incremental Term Loan Commitment” means,
with respect to each Incremental Term Loan Bank, the amount set forth for such
Bank in respect of the Incremental Term Loan Facility in the Register
maintained by the Agent pursuant to Section 10.06(f).


 


“Incremental Term Loan Facility” has the
meaning set forth in Section 2.17(a).


 


“Incremental Term Loan Note” means a
promissory note of the Borrower to the order of any Incremental Term Loan Bank,
in substantially the form of Exhibit A-2 hereto (with such modifications
as the Borrower and the Agent may agree are necessary to evidence the terms of
the Incremental Term Loan Facility), evidencing the indebtedness of the
Borrower to such Bank resulting from the Incremental Term Loan deemed to have
been made by such Lender.


 


“Incremental Term Loan Termination Date” has
the meaning set forth in the definition of “Termination Date” herein.


 


“Indemnitee”  has the meaning set forth in Section 10.03(b).


 


“Initial Term Loan” means each “Term Loan”
under the Existing Bank Credit Agreement continued as an Initial Term Loan
hereunder in accordance with the terms of Section 2.01(b) and each
Initial Term Loan made as a result of a Commitment Increase in accordance with
the terms of Section 2.17.


 


“Initial  Term
Loan Bank” means each Bank (including any Additional Term Loan Bank)
having an Initial Term Loan.


 


“Initial Term Loan Commitment” means, with
respect to each Initial Term Loan Bank, the amount set forth opposite its name
on Appendix II hereto or, if such Bank has entered into one or more Assignment
and Assumptions or Assumption Agreements or is an Additional Term Loan Bank,
the amount set forth for such Bank in respect of the Initial Term Loan Facility
in the Register maintained by the Agent pursuant to Section 10.06(f).


 


“Initial  Term
Loan Facility” means, at any time, the aggregate amount of the
Initial Term Loan Banks’ Initial Term Loans at such time.


 


“Initial Term Loan Note” means a promissory
note of the Borrower to the order of any Initial Term Loan Bank, in
substantially the form of Exhibit A-2 hereto, evidencing the 


 


AES Fourth Amended and
Restated Credit Agreement


 


16

















 


indebtedness of the Borrower to such Bank resulting
from the Initial Term Loan deemed to have been made by such Lender.


 


“Initial  Term
Loan Termination Date” has the meaning set forth in the definition
of “Termination Date” herein.


 


“Interest Period”  means, with respect to each
Euro-Dollar Loan, the period commencing on the date of borrowing specified in
the applicable Notice of Borrowing or on the date specified in an applicable
Notice of Interest Rate Election and ending one, two, three, six or, with the
consent of all affected Banks, nine or twelve months thereafter, as the
Borrower may elect in such notice; provided
that:


 


(i)            any
Interest Period which would otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Euro-Dollar Business
Day;


 


(ii)           any
Interest Period which begins on the last Euro-Dollar Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall, subject to clause (iii) below,
end on the last Euro-Dollar Business Day of a calendar month; and


 


(iii)          any
Interest Period that would otherwise end after the Termination Date shall end
on the Termination Date.


 


“Intermediate Holding Companies” has the meaning set forth in
Section 5.16(b).


 


“Internal Revenue
Code”  means the
Internal Revenue Code of 1986, as amended, or any successor statute.


 


“Investment”  means any investment in any Person,
whether by means of share purchase, capital contribution, loan, Guarantee, time
deposit or otherwise (but not including any demand deposit).


 


“IPALCO” means Ipalco Enterprises, Inc.,
an Indiana corporation.


 


“IPALCO Asset Sale” has the meaning set
forth in Section 2.09(b)(ii).


 


“Lender Parties” has the meaning set forth
in the Collateral Trust Agreement.


 


“Lien”
means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind, or any other type of preferential
arrangement that has the practical effect of creating a security interest, in
respect of such asset.  For the purposes
of this Agreement, the Borrower or any of its Subsidiaries shall be deemed to
own subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.


 


AES Fourth Amended and
Restated Credit Agreement


 


17

















 


“Loan”
means a Revolving Credit Loan or a Term Loan, each of which may be a Base Rate
Loan or a Euro-Dollar Loan and “Loans”
means Revolving Credit Loans or Term Loans, each of which may be Base Rate
Loans or Euro-Dollar Loans or any combination of the foregoing.


 


“Loan Party” means each Obligor and AES BVI
II.


 


“London Interbank
Offered Rate”  means,
for any Interest Period, the average (rounded upward, if necessary, to the next
higher 1/16th of 1%) of the respective rates per annum at which
deposits in dollars are offered to each of the Reference Banks in the London
interbank market at approximately 11:00 A.M. (London time) two business
days before the first day of such Interest Period in an amount approximately
equal to the principal amount of the Euro-Dollar Loan of such Reference Bank to
which such Interest Period is to apply and for a period of time comparable to
such Interest Period.


 


“Material Adverse Effect” means a material adverse effect on (i) the
business, consolidated results of operations, consolidated financial condition
or prospects of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Loan Parties to perform their material obligations under any
Financing Document or (iii) the rights of and remedies available to any
Bank Party under any Financing Document.


 


“Material AES
Entity”  means (i) any
Subsidiary Guarantor and (ii) any other Person in which the Borrower has a
direct or indirect equity Investment if such Person’s contribution to Parent
Operating Cash Flow for the four most recently completed fiscal quarters of the
Borrower constitutes 15% or more of Parent Operating Cash Flow for such period.


 


“Material Debt”  means, with respect to any Person,
Debt (other than the Loans and the Reimbursement Obligations) of such Person
arising in one transaction, in an aggregate principal amount exceeding
$50,000,000.


 


“Material Hedge Agreement” means, with respect to any Person,
a Hedge Agreement entered into by such Person in respect of which the
Derivative Obligations of such Person exceed $50,000,000.


 


“Material Obligation” means any obligation or liability in an
amount equal to or in excess of $50,000,000.


 


“Material Plan”  means at any time a Plan or Plans
having aggregate Unfunded Liabilities in excess of $50,000,000.


 


“Maximum Outstanding Exposure” has the meaning set forth in Section 2.15(a).


 


“Minimum CP Rating”  means (i) A-1 for Standard &
Poor’s Ratings Services; (ii) P-1 for Moody’s Investors Service, Inc.;
(iii) F-1 for Fitch IBCA, Inc. and (iv) D-1 for Duff &
Phelps Credit Rating Co.


 


AES Fourth Amended and
Restated Credit Agreement


 


18

















 


“Minimum Ratings Condition” means, at any
time of determination, that the Facilities are rated at least Ba1 from Moody’s
Investors Service, Inc. and the corporate credit rating of the Borrower is
at least BB- from Standard & Poor’s Ratings Services, in each case
without any negative outlook.


 


“Multiemployer
Plan”  means at
any time an employee pension benefit plan within the meaning of Section 4001(a)(3)
of ERISA to which any member of the ERISA Group is then making or accruing an
obligation to make contributions or has within the preceding five plan years
made contributions, including for these purposes any Person which ceased to be
a member of the ERISA Group during such five year period.


 


“Net Cash Proceeds”:  (a)  with respect to an Equity Issuance
by a Subsidiary or the incurrence of Debt (a “Covered
Transaction”), means the aggregate amount of cash received from time
to time (whether as initial consideration or through payment or disposition of
deferred consideration) by the Borrower and its Subsidiaries from such Covered
Transaction after deducting therefrom (without duplication) (i) brokerage
commissions, underwriting fees and discounts, legal fees, finder’s fees and
other similar fees and commissions, (ii) in the case of a Covered Transaction
in the form of incurrence of Debt by a Subsidiary, the amount of any Debt of
such Subsidiary that, by the terms of the agreement or instrument governing
such Debt or applicable law, is required to be repaid or prepaid and is
actually so repaid or prepaid with all or a portion of the proceeds of such
Covered Transaction and (iii) any portion of the proceeds of such Covered
Transaction required to prepay or collateralize interest or dividends payable
in respect of such Covered Transaction during one six-month period; and


 


(b) with
respect to any Asset Sale, means cash payments received (including any cash
payments received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise, but only as and when received (including
any cash received upon sale or disposition of such note or receivable),
excluding any other consideration received in the form of assumption by the
acquiring Person of Debt or other obligations relating to the property disposed
of in such Asset Sale or received in any other noncash form) therefrom, in each
case, net of:


 


                (i)            all legal, title and
recording tax expenses, commissions and other customary fees and expenses
incurred (including, without limitation, consent and waiver fees and any
applicable premiums, earn-out or working interest payments or payments in lieu
or in termination thereof), and all federal, state, provincial, foreign and
local taxes payable to the relevant tax authority (x) as a direct
consequence of such Asset Sale, (y) as a result of the required repayment
of any Debt in any jurisdiction other than the jurisdiction where the property
disposed of was located or (z) as a result of any repatriation to the U.S.
of any proceeds of such Asset Sale,


 


                (ii)           a reasonable reserve
(which reserve if required by the applicable sale agreement, shall be deposited
into a third party escrow account with an escrow agent and shall be maintained
in such account until such time as the applicable indemnification obligation
expires or the amounts on deposit are required to make indemnification
payments) for any indemnification payments 


 


AES Fourth Amended and
Restated Credit Agreement


 


19

















 


(fixed
and contingent) attributable to seller’s indemnities to the purchaser
undertaken by the Borrower or any of its Subsidiaries in connection with such
Asset Sale (but excluding any payments, which by the terms of the indemnities
will not, under any circumstances, be made prior to the Termination Date); provided that any amounts in such reserve
to the extent not paid to the purchaser as an indemnification payment after the
expiration of any applicable time period set forth in the agreements in respect
of such Asset Sale shall be treated as “Net Cash Proceeds” for all purposes of
this Agreement,


 


                (iii)          all payments made on any
Debt which must by its terms or by applicable law be repaid out of the proceeds
from such Asset Sale, and


 


                (iv)          all required
distributions and other required payments made to minority interest holders in
Subsidiaries or joint ventures as a result of such Asset Sale;


 


provided that for purposes of
determining Net Cash Proceeds received by a Subsidiary required to be applied
pursuant to Section 2.10, only that portion of such Net Cash Proceeds
received by the Borrower or a Qualified Holding Company whose Equity Interests
have been pledged to the Secured Holders pursuant to the Collateral Documents
from such Subsidiary in accordance with Section 5.17 shall be included.


 


“Non-Consenting Bank” has the meaning set
forth in Section 10.16.


 


“Non-Pledged Subsidiaries” means (i) as
of the Closing Date, each of the direct Subsidiaries of the Borrower or of AES
BVI II listed on Schedule III or (ii) after the Closing Date, in addition
to the “Non-Pledged Subsidiaries” set forth on Schedule III, any newly formed
or acquired direct (1) Subsidiary of the Borrower whose aggregate assets
have a fair market value not in excess of $3,000,000 and, together with the
fair market value of the assets of all Non-Pledged Subsidiaries (other than any
Subsidiary which is described in clause (2) below), does not exceed
$50,000,000 or (2) Subsidiaries of the Borrower for which a grant or
perfection of a Lien on such Subsidiary’s stock would require approvals and
consents from foreign and domestic regulators and from lenders to, and
suppliers, customers or other contractual counterparties of, such Subsidiary.


 


“Note”
means a Revolving Credit Loan Note or a Term Loan Note.


 


“Notice of
Borrowing”  has
the meaning set forth in Section 2.02.


 


“Notice of
Interest Rate Election” has the meaning set forth in Section 2.07(a).


 


“Notice of
Issuance” has the meaning set forth in Section 2.03(d).


 


“Obligation” means, with respect to any
Person, any payment, performance or other obligation of such Person of any
kind, including, without limitation, any liability of such Person on any claim,
whether or not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured or unsecured, and whether or
not such claim is discharged, 


 


AES Fourth Amended and
Restated Credit Agreement


 


20

















 


stayed or otherwise affected by any proceeding referred
to in Section 6.01(g) or (h). 
Without limiting the generality of the foregoing, the Obligations of the
Borrower and the Subsidiary Guarantors under the Loan Documents include (i) the
obligation to pay principal, interest, Revolving Letter of Credit commissions,
charges, expenses, fees, attorneys’ fees and disbursements, indemnities and
other amounts payable by the Borrower and such Subsidiary Guarantor under any
Financing Document and (ii) the obligation of the Borrower and such
Subsidiary Guarantor to reimburse any amount in respect of any of the foregoing
that any Bank Party, in its sole discretion, may elect to pay or advance on
behalf of the Borrower and such Subsidiary Guarantor.


 


“Obligors”  means the Borrower and the
Subsidiary Guarantors.


 


“Off Balance Sheet Obligation” means, with
respect to any Person, any Obligation of such Person under a synthetic lease,
tax retention operating lease, off-balance sheet loan or similar off-balance
sheet financing classified as an operating lease in accordance with GAAP, if
such Obligations would give rise to a claim against such Person in a proceeding
referred to in Section 6.01(h).


 


“Other Taxes” has the meaning set forth in Section 8.04(b).


 


“Parent”  means, with respect to any Bank
Party, any Person controlling such Bank Party.


 


“Parent Operating
Cash Flow”  means,
for any period, the sum of the following amounts (determined without
duplication) as calculated below:


 


(i)            dividends
paid to the Borrower by its Subsidiaries during such period;


 


(ii)           consulting
and management fees paid to the Borrower for such period;


 


(iii)          tax
sharing payments made to the Borrower during such period;


 


(iv)          interest
and other distributions paid to the Borrower during such period with respect to
cash and other Temporary Cash Investments of the Borrower (other than with
respect to amounts on deposit in the Revolving L/C Cash Collateral Account);


 


(v)           cash
payments made to the Borrower in respect of foreign exchange Hedge Agreements
or other foreign exchange activities entered into by the Borrower on behalf of
any of its Subsidiaries; and


 


(vi)          other
cash payments made to the Borrower by its Subsidiaries other than (A) returns
of invested capital; (B) payments of the principal of Debt of any such
Subsidiary to the Borrower and (C) payments in an amount equal to the
aggregate amount released from debt service reserve accounts upon the issuance
of letters of credit for the account of the Borrower and the benefit of the
beneficiaries of such accounts.


 


AES Fourth Amended and
Restated Credit Agreement


 


21

















 


For purposes of determining Parent Operating Cash
Flow:


 


(1)           net cash payments
received by a Qualified Holding Company whose Equity Interests have been
pledged to the Secured Holders pursuant to the Collateral Documents during any
period which could have been (without regard for any cash held by such
Qualified Holding Company at the beginning of such period), but were not, paid
as a dividend to the Borrower during such period due to tax or other cash
management considerations may be included in Parent Operating Cash Flow for
such period; provided that any
amounts so included will not be included in Parent Operating Cash Flow if and
when paid to the Borrower in any subsequent period; and


 


(2)           Net Cash Proceeds from
Asset Sales, Equity Issuances or the incurrence of Debt (but only to the extent
that the Net Cash Proceeds from such incurrence of Debt are paid to the
Borrower or a Qualified Holding Company as a return of capital) shall not be
included in Parent Operating Cash Flow for any period.


 


“Participant”  has the meaning set forth in Section 10.06(b).


 


“Payment Restriction” means any provision in
any agreement limiting the ability of any of the Borrower’s Subsidiaries to
declare or pay dividends or other distributions in respect of its Equity
Interests or repay or prepay any Debt owed to, make loans or advances to, or
otherwise transfer assets to or invest in, the Borrower or any Subsidiary of
the Borrower (whether through a covenant restricting dividends, loans, asset
transfers or investments, a financial covenant or otherwise).


 


“PBGC”  means the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its functions under
ERISA.


 


“Permitted Business” means, with respect to
any Person, (i) a line of business which is substantially the same line of
business as one or more of the principal businesses of such Person and its
Subsidiaries, (ii) a line of business which is complementary or ancillary
to, one or more of the principal businesses of such Person and its
Subsidiaries, (iii) any energy business, (iv) any infrastructure
business, (v) any power business, (vi) any public utility business, (vii) the
ownership, extraction, processing, transportation, distribution and sales of
fossil fuels and derivatives thereof, (viii) any line of business relating
or in connection with, climate solutions, carbon offsets, biofuels or battery
storage and (ix) any business ancillary, complementary or related to any
of the business described in clauses (i) through (viii), including without
limitation trading activities.


 


“Permitted Credit Derivative Transaction”
means any credit derivative transaction referencing a government, governmental
agency or quasi-governmental agency, sovereign or sovereign agency or a super-
or multi- national agency or any debt obligation issued by any such entity, in
each case to the extent such transaction is not entered into for speculative
purposes.


 


AES Fourth Amended and
Restated Credit Agreement


 


22

















 


“Person”  means an individual, a corporation,
a partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.


 


“Plan”  means at any time an employee
pension benefit plan (other than a Multiemployer Plan) which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Internal Revenue Code and either (i) is maintained, or contributed
to, by any member of the ERISA Group for employees of any member of the ERISA
Group or (ii) has at any time within the preceding five years been
maintained, or contributed to, by any Person which was at such time a member of
the ERISA Group for employees of any Person which was at such time a member of
the ERISA Group.


 


“Pledged Debt” shall have the meaning specified in the
Security Agreement.


 


“Pledged Subsidiary” means a direct Subsidiary of the
Borrower or AES BVI II listed on Schedule I hereto, whose Equity Interests
have been pledged to the Collateral Trustees for the benefit of the Secured
Holders by the Borrower or AES BVI II, as applicable, pursuant to the Security
Agreement or the BVI Cayman Pledge Agreement.


 


“Power Supply
Business”  means
an electric power or thermal energy generation or cogeneration facility or
related facilities, or an electric power transmission, distribution, fuel
supply and fuel transportation facilities, or any combination thereof (all
subject to relevant security, if any, under related project financing
arrangements), together with its or their related power supply, thermal energy
and fuel contracts as well as other contractual arrangements with customers,
suppliers and contractors.


 


“PUHCA” has the meaning set forth in Section 4.12.


 


“Qualified Equity-Linked or Hybrid Securities” means
preferred stock, mandatorily convertible debt securities and Hybrid Securities,
in each case, that does not constitute Redeemable Stock.


 


“Qualified Holding
Company”  means
any Wholly-Owned Consolidated Subsidiary of the Borrower that satisfies, and
all of whose direct or indirect holding companies (other than the Borrower) are
Wholly-Owned Consolidated Subsidiaries of AES that satisfy, the following
conditions:


 


                (i)            its direct and indirect interest in any AES
Business shall be limited to the ownership of Capital Stock or Debt obligations
of a Person with a direct or indirect interest in such AES Business;


 


                (ii)           except as a result of the Financing
Documents (and permitted refinancings thereof), no consensual encumbrance or
restriction of any kind shall exist on its ability to make payments,
distributions, loans, advances or transfers to the Borrower;


 


                (iii)          it shall not have outstanding any Debt other
than Guarantees of Debt under, or Liens constituting Debt under, the Financing
Documents (and 


 


AES Fourth Amended and
Restated Credit Agreement


 


23

















 


permitted refinancings
thereof) and Debt to the Borrower or to other Qualified Holding Companies
(other than AES BVI II);


 


                (iv)          it shall engage in no business or other
activity, shall enter into no binding agreements and shall incur no obligations
(other than agreements with, and obligations to, the Borrower or other
Qualified Holding Companies (other than AES BVI II)) other than (A) the
holding of the Capital Stock and Debt obligations permitted under clause (i) above,
including entering into retention agreements and subordination agreements
relating to such Capital Stock and Debt, (B) the holding of cash received
from its Subsidiaries and the investment thereof in Temporary Cash Investments,
(C) the payment of dividends and other amounts to the Borrower, (D) ordinary
business development activities, (E) the making (but not the entering into
binding obligations to make) of Investments in AES Businesses owned by its
Subsidiaries, (F) in the case of AES Electric, the making of Investments
in Power Supply Business owned by NIGEN Limited and Medway Power Limited or the
repayment of up to GBP10,000,000 owed to AES Barry as of the Effective Date
under any agreement by which it is bound as of the Effective Date and (G) entering
into foreign exchange Hedge Agreements (otherwise permitted under Section 5.19)
in respect of dividends received or expected to be received from Subsidiaries
of such Qualified Holding Company, in a notional amount not to exceed
$100,000,000 outstanding at any time for each Qualified Holding Company and for
a term of no more than six months from the date the relevant Hedge Agreement is
entered into; and


 


                (v)           is listed on Schedule V hereto (as
supplemented from time to time by written notice to the Agent by the Borrower).


 


“Quarterly Payment
Date”  means each
March 31, June 30, September 30 and December 31.


 


“Recourse Debt”
means, on any date, the sum of (i) Debt of the Borrower (other than Equity
Credit Preferred Securities and Qualified Equity-Linked or Hybrid Securities)
plus (ii) Derivative Obligations of the Borrower plus (iii) Off
Balance Sheet Obligations of the Borrower.


 


“Recourse Debt to
Cash Flow Ratio”  means,
for any period, the ratio of:


 


(i)            the sum
of the Recourse Debt as of the end of such period to;


 


(ii)           the
Adjusted Parent Operating Cash Flow during such period.


 


“Redeemable Stock”  means any class or series of
Capital Stock or Hybrid Securities of any Person that by its terms or otherwise
is (i) required to be redeemed prior to the date that is 180 days
following the Termination Date (other than a redemption solely in the form of
Capital Stock that does not constitute Redeemable Stock), (ii) redeemable
at the option of the holder of such class or series of Capital Stock or Hybrid
Securities at any time prior to the date that is 180 days following the
Termination Date or (iii) convertible into or exchangeable for (unless
solely at the option of such person) Capital Stock or Hybrid Securities
referred to in


 


AES Fourth Amended and
Restated Credit Agreement


 


24
















 


clause (i) or (ii) above or Debt having a
scheduled maturity prior to the date that is 180 days following the Termination
Date; provided that any Capital
Stock or Hybrid Securities that would not constitute Redeemable Stock but for
provisions thereof giving holders thereof the right to require such person to
repurchase or redeem such Capital Stock or Hybrid Securities upon the
occurrence of an “asset sale” or a “change of control” occurring prior to the
date that is 180 days following the Termination Date shall not constitute
Redeemable Stock if such Capital Stock or Hybrid Securities specifically
provides that such person will not repurchase or redeem any such Capital Stock
or Hybrid Securities pursuant to such provisions unless such repurchase or
redemption is permitted under the terms of this Agreement.


 


“Reference Banks”  means the respective principal
London offices of Citicorp USA, Inc., Bank of America, N.A. and Union Bank
of California, N.A. and “Reference Bank” means any one of such Reference
Banks.


 


“Refunding
Borrowing”  means
a Borrowing which, after application of the proceeds thereof, results in no net
increase in the Total Outstandings of any Revolving Credit Loan Bank.


 


“Register”
has the meaning set forth in Section 10.06(f).


 


“Regulation U”
means Regulation U of the Board of Governors of the Federal Reserve
System, as in effect from time to time.


 


“Reimbursement
Obligations”  means
at any date the obligations then outstanding of the Borrower under Section 2.03(f) to
reimburse the Revolving Fronting Banks for Revolving L/C Drawings under
Revolving Letters of Credit.


 


“Related Fund” means with respect to any
Bank Party that is a fund that invests in bank loans, any other fund that
invests in commercial loans and is managed or advised by the same investment
advisor as such Bank party or by an Affiliate of such investment advisor.


 


“Relevant Contingent Exposure” has the
meaning set forth in Section 2.14(c).


 


“Required Banks” means, at any time, Bank
Parties owed or holding at least a majority in interest of the aggregate
principal amount (based in the case of any Revolving Letter of Credit
denominated in an Alternative Currency other than Dollars, on the Dollar
Equivalent at such time) of the sum of (i) the aggregate principal amount
of the Loans outstanding at such time, (ii) the aggregate Revolving Letter
of Credit Liabilities outstanding at such time and (iii) the aggregate
Unused Revolving Credit Loan Commitments at such time.


 


“Required Revolving Credit Loan Banks” means
at any time the Revolving Credit Loan Banks having at least a majority of the
aggregate Total Exposures at such time.


 


“Responsible Officer” means any duly
authorized officer of the Borrower or any of its Subsidiaries.


 


“Restricted Payment” has the meaning set
forth in Section 5.09(a).


 


AES Fourth Amended and
Restated Credit Agreement


 


25

















 


“Revolving Credit Assumption Agreement” has
the meaning set forth in Section 2.18(d)(ii).


 


“Revolving Credit Increase Date” has the
meaning set forth in Section 2.18(a).


 


“Revolving Credit
Loan” has the meaning set forth in Section 2.01(a).


 


“Revolving Credit Loan Bank” means each Bank
having a Revolving Credit Loan Commitment.


 


“Revolving Credit Loan Commitment” means, at
any time, with respect to any Revolving Credit Loan Bank at any time, the
amount set forth opposite such Bank’s name on Appendix I hereto under the
caption “Revolving Credit Loan Commitment” or, if such Bank has entered into
one or more Assignment and Assumptions, the amount set forth for such Bank in
the Register maintained by the Agent pursuant to Section 10.06(f) as
such Bank’s “Revolving Credit Loan Commitment”, as such amount may be reduced
at or prior to such time pursuant to Sections 2.09 or 2.10.


 


“Revolving Credit Loan Commitment Increase”
has the meaning set forth in Section 2.18(a).


 


“Revolving Credit Loan Facility” means, at
any time, the aggregate amount of the Revolving Credit Loan Banks’ Revolving
Credit Loan Commitments.


 


“Revolving Credit Loan Increase Commitment Date”
has the meaning set forth in Section 2.18(b).


 


“Revolving Credit Loan Note” means a
promissory note of the Borrower to the order of any Revolving Credit Loan Bank,
in substantially the form of Exhibit A-1 hereto, evidencing the
indebtedness of the Borrower to such Bank resulting from the Revolving Credit
Loans made or deemed to have been made by such Lender.


 


“Revolving Credit Loan/Term Loan Obligations”
shall have the meaning set forth in Section 9.01.


 


“Revolving Credit
Period”  means
the period from and including the Effective Date to but excluding the
Termination Date.


 


“Revolving Fronting Bank” means (i) with respect to each
Existing Letter of Credit deemed to have been issued pursuant to the second
sentence of Section 2.03(a), each Bank listed as issuer thereof on
Appendix III hereto, as the case may be, (ii) each Revolving Credit Loan
Bank listed on Schedule VII hereto and (iii) any other Revolving Credit
Loan Bank and/or any Third Party Fronting Bank which has executed and delivered
to the Agent a Revolving Fronting Bank Agreement pursuant to Section 10.15,
in each case, unless such Bank has been released from its obligation as a
Revolving Fronting Bank pursuant to Section 10.15(b).


 


“Revolving Fronting Bank
Agreement” means an
agreement, in substantially the form of Exhibit E hereto.


 


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Restated Credit Agreement


 


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“Revolving L/C Cash Collateral Account”  has
the meaning set forth in Section 2.14(a).


 


“Revolving L/C Collateral” has the meaning set forth in Section 2.14(b).


 


“Revolving L/C Drawing”  means a drawing
effected under any Revolving Letter of Credit.


 


“Revolving Letter of Credit” means a letter of credit issued by a
Revolving Fronting Bank pursuant to Section 2.03(a) and shall also include each
Existing Letter of Credit.


 


“Revolving Letter of Credit Commission Rate”  means
a rate per annum equal to the Applicable Revolving Margin.


 


“Revolving Letter of Credit Liabilities”  means,
at any time and in respect of any Revolving Letter of Credit, the sum, without
duplication, of (i) the Available Amount of such Revolving Letter of
Credit plus (ii) the
aggregate unpaid amount of all Reimbursement Obligations in respect of previous
Revolving L/C Drawings made under such Revolving Letter of Credit.


 


“Revolving Letter of Credit Termination Date”
has the meaning set forth in Section 2.03(h)(i).


 


“SEC Filings”
means public filings made by the Borrower with the Securities and Exchange
Commission on Form 8-K, Form 10-Q or Form 10-K, and any filed
amendments to any of the foregoing.


 


“Second-Priority Secured Debt” means (i) the
Borrower’s 83⁄4% Second Priority Senior Secured Notes due 2013, (ii) the
Borrower’s 9% Second Priority Notes due 2015 and (iii) Debt of the
Borrower that is secured by a Lien on the Creditor Group Collateral that is pari passu with the Lien securing the
Notes described in clauses (i) or (ii) (or permitted refinancings
thereof).


 


“Secured Hedge Agreement” means any Hedge
Agreement permitted under Article V that (i) is entered into by and
between the Borrower and any Hedge Bank and (ii) specifies by its terms
that it is secured by the Collateral.


 


“Secured Holders” has the meaning set forth
in the Collateral Trust Agreement.


 


“Secured Obligations” has the meaning
specified in the Collateral Trust Agreement.


 


“Secured Treasury Management Service Agreements”
means any agreement between the Borrower or any of its Subsidiaries and a Bank
Party or an Affiliate of a Bank Party to provide treasury management services
to the Borrower.


 


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Restated Credit Agreement


 


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“Security Agreement” means the Security
Agreement dated as of December 12, 2002 made by the grantors thereunder in
favor of the Collateral Trustees, as amended by Amendment No. 1 dated as
of July 29, 2003 and as further amended from time to time.


 


“Security Agreement Collateral” means the “Collateral”
referred to in the Security Agreement.


 


“Senior Secured Exchange Notes” means the 10% Exchange Notes
due December 15, 2005 issued by the Borrower pursuant to the Senior
Secured Exchange Note Indenture and any other Debt issued by the Borrower under
the Senior Secured Exchange Note Indenture.


 


“Senior Secured Exchange Note Indenture”
means that certain indenture between the Borrower and Wells Fargo Bank
Minnesota, National Association, as Trustee to be dated as of December 13,
2002.


 


“Senior Subordinated Notes” means the 8.375%
Senior Subordinated Notes due August 2007 and the 8.50% Senior
Subordinated Notes due November 2007 issued by the Borrower pursuant to
the Senior Subordinated Notes Indentures.


 


“Senior Subordinated Notes Indentures” means
(i) that certain indenture between the Borrower and The Bank of New York,
as Trustee dated as of July 17, 1997 and (ii) that certain indenture
between the Borrower and Wells Fargo Bank Minnesota, National Association
(successor to The First National Bank of Chicago), as Trustee dated as of October 29,
1997.


 


“Shared Collateral Documents” means the Security Agreement,
the Collateral Trust Agreement, the BVI Cayman Pledge Agreement and any other
agreement that creates or purports to create a Lien in favor of the Collateral
Trustees for the Lender Parties.


 


“Significant AES
Entity” means (i) any Material AES Entity, (ii) AES
BVI II and (iii) any other Person (other than any Excluded AES Entity) in
which the Borrower has a direct or indirect equity Investment if (A) such
Person’s contribution to Parent Operating Cash Flow for the four most recently
completed fiscal quarters of the Borrower constitutes 10% or more of Parent
Operating Cash Flow for such period, or (B) on any date of determination,
the Borrower’s direct or indirect interest in the total assets of such Person
if such Person is a Consolidated Subsidiary or in the net assets of such Person
in all other cases is at least equal to 10% of the consolidated assets of the
Borrower and its Consolidated Subsidiaries, taken as a whole, on such date of
determination.


 


“Solvent” and “Solvency” mean, with respect to any Person on a particular
date, that on such date (i) the fair value of the property of such Person
is greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (ii) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (iii) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such Person’s
ability to pay such debts and liabilities as they mature and (iv) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a 


 


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Restated Credit Agreement


 


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transaction, for which such Person’s property would
constitute an unreasonably small capital. 
The amount of contingent liabilities at any time shall be computed as
the amount that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.


 


“Special Purpose
Financing Subsidiary” means a Consolidated Subsidiary that
has no direct or indirect interest in a Power Supply Business or other AES
Business and (1) for purposes of Section 5.09(a)(v), was formed
solely for the purpose of acquiring Equity Interests in the Borrower and obtaining financing (including the issuance of securities) the
proceeds of which were intended to be used to acquire Equity Interests in the
Borrower or (2) for any other purpose hereunder, was formed solely
for the purpose of issuing Trust Preferred Securities.


 


“Subsidiary”
means, with respect to any Person, any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person.


 


“Subsidiary
Guarantors”  means
AES Oklahoma, AES Hawaii Management, AES Warrior Run and AES New York.


 


“Subsidiary
Guaranty”  has
the meaning set forth in Section 9.01.


 


“Sul Guarantee” means the Guarantee in the
Sponsor Agreement dated as of March 7, 2001 between the Borrower and BankBoston,
N.A. Nassau Branch, as agent (“BankBoston”)
for the lenders under the Sul Credit Agreement referred to below by the
Borrower to Guarantee the obligations of AES Cayman Guaiba, Ltd., a Cayman
Islands corporation (the “Sul Borrower”)
under the Credit Agreement dated
as of March 6, 2001 (the “Sul Credit
Agreement”), with BankBoston, Banc of America Securities, LLC,
Unibanco – Uniao de Bancos Brasilieros S.A. and Westdeutsche Landesbank
Girozentrale, New York Branch, and the lenders named therein (as the same may
be amended or amended and restated from time to time) in an amount of up to a
maximum aggregate amount of $50,000,000.


 


“Supermajority Banks” means, at any time,
Bank Parties owed or holding at least a 66 2/3% interest of the aggregate principal
amount (based in the case of any Revolving Letter of Credit denominated in an
Alternative Currency other than Dollars, on the Dollar Equivalent at such time)
of the sum of (i) the aggregate principal amount of the Loans outstanding
at such time, (ii) the aggregate Revolving Letter of Credit Liabilities
outstanding at such time and (iii) the aggregate Unused Revolving Credit
Loan Commitments at such time.


 


“Taxes” has the meaning set forth in Section 8.04(a).


 


“Temporary Cash
Investment”  means
any Investment (having a maturity of not greater than 60 days from the date of
issuance thereof) in (A)(i) direct obligations of the United States or any
agency thereof, or obligations guaranteed by the United States or any agency
thereof; (ii) commercial paper rated at least the Minimum CP Rating by any
two of Standard & Poor’s Ratings Services, Moody’s Investors Service, Inc.,
Fitch IBCA, Inc. and Duff & Phelps Credit Rating Co., provided that one of such two Minimum CP
Ratings is by Standard & Poor’s Ratings Services or Moody’s Investors
Service, Inc.; (iii) time deposits with, including 


 


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Restated Credit Agreement


 


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certificates of deposit issued by, any office located
in the United States of any bank or trust company which is organized or
licensed under the laws of the United States or any state thereof and has
capital, surplus and undivided profits aggregating at least $500,000,000; (iv) medium
term notes, auction rate preferred stock, asset backed securities, bonds, notes
and letter of credit supported instruments, issued by any entity organized
under the laws of the United States, or any state or municipality of the United
States and rated in any of the three highest rated categories by Standard &
Poor’s Ratings Services or Moody’s Investors Service, Inc.; (v) repurchase
agreements with respect to securities described in clause (i) above
entered into with an office of a bank or trust company meeting the criteria
specified in clause (iii) above; (vi) Euro-Dollar certificates of
deposit issued by any bank or trust company which has capital and unimpaired
surplus of not less than $500,000,000 or (vii) with respect to a
Subsidiary, any category of investment designated as permissible investments
under such Subsidiary’s loan documentation; provided
that in each case (except clause (vii)) that such Investment matures within
fifteen months from the date of acquisition thereof by the Borrower or a
Subsidiary and (B) registered investment companies that are “money market
funds” within the meaning of Rule 2a-7 under the Investment Company Act of
1940.


 


“Term Loan” means each Initial Term Loan and each Incremental
Term Loan.


 


“Term Loan Bank” means each Initial Term
Loan Bank and each Incremental Term Loan Bank.


 


“Term Borrowings” means a borrowing consisting of
simultaneous Term Loans of the same type made by the appropriate Term Loan
Banks.


 


“Term Loan Commitments” means the Initial
Term Loan Commitments of the Initial Term Loan Banks at such time and the
Incremental Term Loan Commitments of the Incremental Term Loan Banks at such
time.


 


“Term Loan
Facilities” means the Initial Term Loan Facility and the
Incremental Term Loan Facility.


 


“Term Loan Notes” means the Initial Term
Loan Notes and the Incremental Term Loan Notes.


 


“Termination Date”  means (i) June 23, 2010
in the case of the Revolving Credit Loan Facility, (ii) August 10,
2011, in the case of the Initial Term Loan Facility (the “Initial Term Loan Termination Date”) and (iii) the
date agreed to by the Borrower, the Agent and the Incremental Term Loan Banks
in the case of any Incremental Term Loan Facility (the “Incremental Term Loan Termination Date”); provided that the Incremental Term Loan
Termination Date shall not occur prior to the Initial Term Loan Termination
Date; provided, in each case,
that if the Termination Date occurs on a day that is not a Euro-Dollar Business
Day, the Termination Date shall occur on the next succeeding Euro-Dollar
Business Day unless such Euro-Dollar Business Day falls in another calendar
month, in which case the Termination Date shall be the next preceding
Euro-Dollar Business Day.


 


“Third Party Fronting Bank” means (i) the Agent, (ii) any
Term Loan Bank or any Affiliate of any Term Loan Bank (A) a majority of
whose common equity is owned, directly 


 


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Restated Credit Agreement


 


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or indirectly, by such Term Loan Bank, (B) that
owns, directly or indirectly, a majority of the common equity of such Term Loan
Bank or (C) a majority of whose common equity is owned, directly or
indirectly, by a Person that owns, directly or indirectly, a majority of the
common equity of such Term Loan Bank and any Subsidiary of any Term Loan Bank a
majority of whose common equity is owned directly or indirectly, by such Term
Loan Bank, (iii) any commercial bank having total assets in excess of
$5,000,000,000, (iv) any savings and loan association or savings bank
organized under the laws of the United States, or any State thereof, and having
a net worth in excess of $250,000,000 or (v) any other Person approved by
the Agent, that shall, in the
case of any such Agent, Term Loan Bank, Affiliate, Parent, Subsidiary or other
financial institution or Person agree to issue letters of credit hereunder with
the consent of the Agent (which consent will be deemed to have been given
unless the Agent shall have notified the Borrower to the contrary within one
day of the Agent’s receipt of notice that such Bank, Affiliate, Parent, Subsidiary
or other financial institution or Person is to be a Third Party Fronting Bank).


 


“Total Bank Exposure” at any time means the
sum of (i) the aggregate principal amount of the Loans outstanding at such
time plus (ii) the aggregate
amount of the Revolving Letter of Credit Liabilities at such time plus (iii) the aggregate amount of
the Unused Revolving Credit Loan Commitments.


 


“Total Exposure”
means at any time with respect to each Revolving Credit Loan Bank, its
Revolving Credit Loan Commitment or, if the Revolving Credit Loan Commitments
shall have terminated, its Total Outstandings.


 


“Total
Outstandings” means at any time, as to any Revolving Credit
Loan Bank, the sum of the aggregate outstanding principal amount of such
Revolving Credit Loan Bank’s Loans and its participation in the Revolving
Letter of Credit Liabilities and all unreimbursed Revolving L/C Drawings.


 


“Total Term Loan Commitments” means at any
time in respect of a Term Loan Bank the sum of such Term Loan Bank’s Initial
Term Loan Commitment at such time plus such Term Loan Bank’s Incremental Term
Loan Commitment at such time.


 


“Trust Preferred Securities” means, at any
date:


 


                (i)            any Existing Trust Preferred Securities, and


 


                (ii)           any
other equity interests in a Special Purpose Financing Subsidiary of AES (such
as those known as “TECONS”, “MIPS” or “RHINOS”): (I) that are not (A) required
to be redeemed or redeemable at the option of the holder thereof prior to the
fifth anniversary of the Termination Date or (B) convertible into or exchangeable
for (unless solely at the option of AES) equity interests referred to in clause
(A) above or Debt having a scheduled maturity, or requiring any repayments
or prepayments of principal or any sinking fund or similar payments in respect
of principal or providing for any such repayment, prepayment, sinking fund or
other payment at the option of the holder thereof prior to the fifth
anniversary of the Termination Date and (II) as to which, 


 


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Restated Credit Agreement


 


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at such date, AES has the
right to defer the payment of all dividends and other distributions in respect
thereof for the period of at least 19 consecutive quarters beginning at such
date.


 


“Unfunded
Liabilities”  means,
with respect to any Plan at any time, the amount (if any) by which (i) the
value of all benefit liabilities under such Plan, determined on a plan
termination basis using the assumptions prescribed by the PBGC for purposes of Section 4044
of ERISA, exceeds (ii) the fair market value of all Plan assets allocable
to such liabilities under Title IV of ERISA (excluding any accrued but
unpaid contributions), all determined as of the then most recent valuation date
for such Plan, but only to the extent that such excess represents a potential
liability of a member of the ERISA Group to the PBGC or any other Person under
Title IV of ERISA.


 


“United States”
means the United States of America, including the States and the District of
Columbia, but excluding its territories and possessions.


 


“Unrestricted
Cash” means all cash or cash equivalents of the Borrower and its
Subsidiaries that would not appear as “restricted” on the consolidated balance
sheet of the Borrower or any of its Subsidiaries; provided
that Unrestricted Cash shall not include cash or cash equivalents of a
Subsidiary that is not an Obligor to the extent such Subsidiary is not
permitted (by law, contract or otherwise) from distributing such cash or cash
equivalents to the Borrower.


 


“Unused Revolving Credit Loan Commitments”
means, with respect to any Revolving Credit Loan Bank at any time, (i) such
Bank’s Revolving Credit Loan Commitment at such time minus (ii) the sum of (A) the aggregate principal
amount of all Revolving Credit Loans outstanding at such time and owed to such
Revolving Credit Loan Bank plus (B) such
Bank’s pro rata share of the Revolving Letter of Credit Liabilities and all
unreimbursed Revolving L/C Drawings at such time.


 


“Wholly-Owned Consolidated Subsidiary”  means
any Consolidated Subsidiary all of the shares of Capital Stock or other
ownership interests of which (except directors’ qualifying shares and shares
owned by foreign nationals mandated by applicable law) are at the time directly
or indirectly owned by AES.


 


Section 1.02  Accounting Terms and Determinations.


 


Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by the
Borrower’s independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Banks (“GAAP”);
provided that, if the Borrower
notifies the Agent that the Borrower wishes to amend any covenant in Article 5
to eliminate the effect of any change in generally accepted accounting
principles on the operation of such covenant (or if the Agent notifies the
Borrower that the Required Banks wish to amend Article 5 for such
purpose), then 


 


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Restated Credit Agreement


 


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the Borrower’s compliance with such covenant shall be
determined on the basis of generally accepted accounting principles in effect
immediately before the relevant change in generally accepted accounting
principles became effective, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to the Borrower and the Required
Banks.


 


Section 1.03  Types of Borrowing.


 


The
term “Borrowing” denotes (a) the aggregation of
Loans made (or deemed to have been made) or to be made to the Borrower by one
or more Banks pursuant to Article 2 on the same day, all of which Loans
are of the same type (subject to Article 8) and, except in the case of
Base Rate Loans, have the same initial Interest Period or (b) if the
context so requires, the borrowing of such Loans.  Borrowings are classified for purposes hereof
by reference to the pricing of Loans comprising such Borrowing (e.g., a “Euro-Dollar
Borrowing” is a
Borrowing comprised of Euro-Dollar Loans). 
It is understood and agreed that all Borrowings will be made in Dollars.


 


Section 1.04  Currency Equivalents Generally.


 


For
purposes of this Agreement, the equivalent in any Alternative Currency of an
amount in Dollars shall be determined at the rate of exchange quoted by the
Agent in New York, at 11:00 A.M. (New York time) on the date of
determination, to prime banks in New York for the spot purchase in the New York
foreign exchange market of such amount of Dollars with such Alternative
Currency.


 


ARTICLE
II



THE CREDITS


 


Section 2.01  Commitment to Lend.


 


(a)   Revolving Credit Loan Facility.  (i)  Each Revolving Credit Loan Bank
severally agrees, on the terms and conditions set forth in this Agreement, to
make loans (each a “Revolving Credit Loan”)
in Dollars to the Borrower pursuant to this Section 2.01(a) from time
to time during the Revolving Credit Period in amounts such that the Total
Outstandings of such Revolving Credit Loan Bank at any time shall not exceed
the amount of its Revolving Credit Loan Commitment at such time.  Each Borrowing under this subsection (a) shall
be in an aggregate principal amount of $5,000,000 or any larger multiple of
$1,000,000 (except for Refunding Borrowings and that any such Borrowing may be
in the aggregate amount available in accordance with Section 3.02(b)) and
shall be made from the several Revolving Credit Loan Banks ratably in
proportion to their respective Revolving Credit Loan Commitments.  Within the foregoing limits, the Borrower may
borrow under this Section 2.01(a), repay, or, to the extent permitted by Section 2.10,
prepay Revolving Credit Loans and reborrow at any time during the Revolving
Credit Period.


 


(ii)           Any “Revolving Credit Loans”
outstanding under the Existing Bank Credit Agreement on the Amendment and
Restatement Effective Date shall be continued as Revolving Credit Loans
hereunder.  As of the Amendment and
Restatement Effective Date, the aggregate amount of outstanding Revolving
Credit Loans is $263,257,731.61.


 


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Restated Credit Agreement


 


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(b)   Initial Term Loan Facility.  Subject to the terms and conditions set forth
herein, on the Amendment and Restatement Effective Date any “Term Loan”
outstanding under the Existing Bank Credit Agreement shall be continued as an
Initial Term Loan hereunder.  As of the
Amendment and Restatement Effective Date, the aggregate amount of outstanding
Initial Term Loans is $200 million.


 


(c)   Term Loan Facilities.  The Term Loans are not revolving in nature, and
amounts repaid or prepaid in respect thereof may not be reborrowed.


 


Section 2.02  Notice of Borrowing.


 


(a)   The Borrower shall give the Agent notice (a “Notice of Borrowing”) not later than 11:00 A.M.
(New York City time) on (x) the date of each Base Rate Borrowing and (y) the
third Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:


 


(i)            the date of such
Borrowing, which shall be a Domestic Business Day in the case of a Base Rate
Borrowing or a Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing;


 


(ii)           the aggregate
amount of such Borrowing;


 


(iii)          whether the Loans
comprising such Borrowing are to bear interest initially at the Base Rate or
the Adjusted London Interbank Offered Rate; and


 


(iv)          in the case of a
Euro-Dollar Borrowing, the duration of the initial Interest Period applicable
thereto, subject to the provisions of the definition of “Interest Period.”


 


(b)   Upon receipt of a Notice of Borrowing, the
Agent shall promptly notify each Bank of the contents thereof and of such Bank’s
ratable share of such Borrowing and such Notice of Borrowing shall not
thereafter be revocable by the Borrower.


 


(c)   Not later than 2:00 P.M. (New York City
time) on the date of each Borrowing, each Bank shall (except as provided in
subsection (d) of this Section 2.02) make available its ratable share
of such Borrowing, in Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section 10.01.  Unless the Agent determines that any
applicable condition specified in Article 3 has not been satisfied, the
Agent will make the funds so received from the Banks available to the Borrower
requesting such Borrowing at the Agent’s aforesaid address.


 


(d)   If any Bank makes a new Loan hereunder to the
Borrower on a day on which the Borrower is to repay all or any part of an
outstanding Loan from such Bank, such Bank shall apply the proceeds of its new
Loan to make such repayment and only an amount equal to the difference (if any)
between the amount being borrowed and the amount being repaid shall be made
available by such Bank to the Agent as provided in subsection (c) of
this Section 2.02, or remitted by the Borrower to the Agent as provided in
Section 2.11, as the case may be.


 


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Restated Credit Agreement


 


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(e)   Unless the Agent shall have
received notice from a Bank prior to the date of any Borrowing that such Bank
will not make available to the Agent such Bank’s share of such Borrowing, the
Agent may assume that such Bank has made such share available to the Agent on
the date of such Borrowing in accordance with subsections (c) and (d) of
this Section 2.02 and the Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount.  If and to the extent that such Bank shall not
have so made such share available to the Agent, such Bank and the Borrower
severally agree to repay to the Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such amount
is made available to the Borrower until the date such amount is repaid to the
Agent, at (i) in the case of the Borrower, a rate per annum equal to the
higher of the Federal Funds Rate and the interest rate applicable thereto
pursuant to Section 2.06 and (ii) in the case of such Bank, the
Federal Funds Rate.  If such Bank shall
repay to the Agent such corresponding amount, such amount so repaid shall
constitute such Bank’s Loan included in such Borrowing for purposes of this
Agreement.


 


Section 2.03  Revolving Letters of Credit.


 


(a)   Issuance of Letters of Credit.  Subject to the terms and conditions hereof,
each Revolving Fronting Bank agrees to issue letters of credit under this Section 2.03(a) upon
the Borrower’s request and for the Borrower account or the account of any of
the Borrower’s Subsidiaries, from time to time during the Revolving Credit
Period; provided, however, that in no event shall (i) the
aggregate Available Amount for all Revolving Letters of Credit exceed the
Revolving Credit Loan Facility at such time and (ii) a Revolving Letter of
Credit be issued with an Available Amount in excess of the Unused Revolving
Credit Commitments of the Revolving Credit Loan Banks at such time.  In addition, and notwithstanding any
reference in any Existing Letter of Credit to the Former Bank Credit Agreement,
on and as of the Effective Date, (x) each Existing Letter of Credit shall
be deemed to be a Revolving Letter of Credit and to have been issued on the
Effective Date (by the Revolving Fronting Bank that issued or was deemed to
have issued such Existing Letter of Credit under the Former Bank Credit
Agreement) pursuant to this Section 2.03(a), (y) participations in
such Existing Letters of Credit held by the Revolving Credit Loan Banks under
the Former Bank Credit Agreement shall be deemed to be cancelled and (z) the
Revolving Credit Loan Banks under this Agreement shall be deemed to hold
participations in such
Existing Letters of Credit in the amount required so that the participations of
such Revolving Credit Loan Banks shall be in proportion to their respective
Revolving Credit Loan Commitments; provided,
however, that nothing in this Section 2.03(a) shall
extend, modify or otherwise affect the existing expiry date under any such
Existing Letter of Credit.  Notwithstanding
the foregoing, (x) each Revolving Credit Loan Bank that is a Revolving
Fronting Bank, in its separate capacity as a Revolving Fronting Bank, shall
only be obligated to issue at any time Revolving Letters of Credit having an
aggregate face amount at any time that is equal to the unused Revolving Credit
Loan Commitment of such Revolving Credit Loan Bank at such time and (y) each
other Revolving Fronting Bank shall only be obligated to issue Revolving
Letters of Credit having an aggregate face amount at any time that is equal to
such Revolving Fronting Bank’s commitment at such time as set forth in the
relevant Revolving Fronting Bank Agreement. 
Any “Revolving Letters of Credit” outstanding under the Existing Bank
Credit Agreement on the Amendment and Restatement Effective Date shall remain
outstanding as Revolving Letters of Credit hereunder.


 


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(b)   Participations in Letters of
Credit.  Upon the issuance (or deemed issuance) of
each Revolving Letter of Credit by a Revolving Fronting Bank pursuant to Section 2.03(a),
such Revolving Fronting Bank shall be deemed, without further action by any
party hereto, to have sold to each Revolving Credit Loan Bank (other than such
Revolving Fronting Bank in the case of Revolving Letters of Credit not issued
by a Third Party Fronting Bank) and each such Revolving Credit Loan Bank shall
be deemed, without further action by any party hereto, to have purchased from
such Revolving Fronting Bank a participation in such Revolving Letter of Credit
and the related Revolving Letter of Credit Liabilities in the amount required
so that the participations of the Revolving Credit Loan Banks (including such
Revolving Fronting Bank’s retained participation in the case of Revolving
Letters of Credit not issued by a Third Party Fronting Bank) therein shall be
in proportion to their respective Revolving Credit Loan Commitments.


 


(c)   Required Terms.  Each Revolving Letter of Credit issued hereunder
shall:


 


(i)            by
its terms expire no later than five Domestic Business Days prior to the
Termination Date for the Revolving Credit Loan Facility; except that a Revolving Fronting Bank, at
it sole discretion and without recourse to the Agent or any other Bank Party,
may issue a Revolving Letter of Credit which expires after the Termination Date
for the Revolving Credit Loan Facility, provided
that five Domestic Business Days prior to the Termination Date for the
Revolving Credit Loan Facility, the Borrower shall pay to such issuing
Revolving Fronting Bank an amount in immediately available funds equal to the
Available Amount of such Revolving Letter of Credit, to be held by such issuing
Revolving Fronting Bank as cash collateral;


 


(ii)           be
in a face amount of (x) not less than $300,000 (or the equivalent thereof
in an Alternative Currency); provided
that up to five Revolving Letters of Credit may be issued with stated amounts
less than $300,000 (or the equivalent thereof in an Alternative Currency) and (y) not
more than the amount that would, after giving effect to the issuance thereof
(and the related purchase and sale of participations therein pursuant to Section 2.03(b))
cause the Total Outstandings of any Revolving Credit Loan Bank to equal its
Revolving Credit Loan Commitment; and


 


(iii)          be
in a form acceptable to the relevant Revolving Fronting Bank.


 


(d)   Notice of Issuance.  Except in the case of Existing Letters of
Credit, the Borrower may request that a Revolving Letter of Credit be issued by
giving the Agent and the Revolving Fronting Banks for such Revolving Letter of
Credit a notice (a “Notice of Issuance”)
at least two Domestic Business Days before such Revolving Letter of Credit is
to be issued (or such shorter period of time as shall be acceptable to the
Agent and the relevant Revolving Fronting Banks), specifying:


 


(i)            the
date of issuance of such Revolving Letter of Credit;


 


(ii)           the
expiry date of such Revolving Letter of Credit (which shall comply with the
requirements of Section 2.03(c)(i));


 


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Restated Credit Agreement


 


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(iii)          the
proposed terms of such Revolving Letter of Credit (or the proposed form thereof
shall be attached to such Notice of Issuance), including the face amount
thereof (which shall comply with the requirements of Section 2.03(c)(ii));


 


(iv)          the
transaction that is to be supported or financed with such Revolving Letter of
Credit, including identification of the Power Supply Business or other AES
Business, if any, to which such transaction relates and the name of the
proposed account party for such Revolving Letter of Credit (which may be the
Borrower and any subsidiary of the Borrower); and


 


(v)           the
identity of the Revolving Fronting Banks for such Revolving Letter of Credit,
which shall comply with the definition of “Revolving Fronting Bank” hereunder.


 


Upon
the receipt of a Notice of Issuance, the Agent shall promptly notify each
Revolving Credit Loan Bank of the contents thereof and of the amount of such
Revolving Credit Loan Bank’s participation in such Revolving Letter of Credit
and such Notice of Issuance shall not thereafter be revocable by the Borrower.


 


(e)   Revolving L/C Drawings under Revolving Letters of Credit.


 


(i)            Upon receipt from the
beneficiary of any Revolving Letter of Credit of demand for payment under such
Revolving Letter of Credit, the relevant Revolving Fronting Bank shall
determine in accordance with the terms of such Revolving Letter of Credit
whether such request for payment should be honored.


 


(ii)           If the relevant
Revolving Fronting Bank determines that a demand for payment by the beneficiary
of a Revolving Letter of Credit should be honored, such Revolving Fronting Bank
shall make available to the beneficiary in accordance with the terms of such
Revolving Letter of Credit the amount of the Revolving L/C Drawing under such
Revolving Letter of Credit.  Such
Revolving Fronting Bank shall thereupon promptly notify the Borrower and the
Agent of the amount of such Revolving L/C Drawing paid by it.  Upon receipt by the Agent of such notice from
the relevant Revolving Fronting Bank, the Agent shall promptly notify each
Revolving Credit Loan Bank of the amount of each such Revolving Credit Loan
Bank’s participation therein (which, in the case of any Revolving L/C Drawing
under an Alternative Currency Letter of Credit shall be the Dollar Equivalent
thereof).


 


(f)    Reimbursement and Other Payments by the Borrower.


 


(i)            If any amount is drawn
under any Revolving Letter of Credit issued at the request of or for the
account of the Borrower or any Subsidiary of the Borrower, the Borrower
irrevocably and unconditionally agrees to reimburse the applicable Revolving
Fronting Bank in Dollars for all amounts paid by such Revolving Fronting Bank
upon such Revolving L/C Drawing (which, in the case of any Revolving L/C
Drawing under an Alternative Currency Letter of Credit shall be the Dollar
Equivalent thereof), together with any and all reasonable charges and expenses
which any Revolving Credit Loan Bank or Revolving Fronting Bank may pay or
incur relative to such Revolving L/C Drawing and all such amounts due from the
Borrower shall bear interest, payable on the date upon which such amounts shall
be due and payable, on the amount drawn for each day from and including the
date such amount is drawn to 


 


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Restated Credit Agreement


 


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but excluding the date such reimbursement
payment is due and payable at a rate per annum equal to the rate applicable to
Base Rate Loans for such day.  If a
Revolving Fronting Bank makes any payment under a Revolving Letter of Credit,
the Borrower shall reimburse such Revolving Fronting Bank by paying such amount
to the relevant Revolving Fronting Bank not later than 12:00 noon (New York
City time) on the day that such payment is made, if the Borrower receives
notice of such payment before 10:00 A.M. (New York City time) on such day,
or if such notice has not been received by the Borrower before such time on such
day, then not later than 12:00 noon (New York City time) on (i) the
Domestic Business Day that the Borrower receives such notice, if such notice is
received before 10:00 A.M. (New York City time) on the day of receipt, or (ii) the
next Domestic Business Day, if such notice is not received before such time on
the day of receipt; provided that
if such payment is at least $1,000,000, the Borrower may, subject to the
conditions to borrowing set forth herein, request in accordance with Section 2.02,
that such payment be made with the proceeds of a Base Rate Borrowing (which
shall consist of Revolving Credit Loans) in an equivalent amount and, to the
extent so financed, the Borrower’s obligation to make such payment shall be
discharged and replaced by the resulting Base Rate Borrowing (which shall
consist of Revolving Credit Loans).  Any
overdue reimbursement payment, or overdue interest thereon, shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the sum of the rate applicable to Base Rate Loans for such day plus 2%.


 


(ii)           Each payment to be made
by the Borrower pursuant to this Section 2.03(f) shall be made, in
Federal or other funds immediately available, to the applicable Revolving
Fronting Bank at its address referred to in Section 10.01.


 


(iii)          The obligations of the
Borrower to reimburse any Revolving Fronting Bank under this Section 2.03(f) shall
be absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, under all circumstances
whatsoever, including without limitation the following circumstances:


 


(A)  any lack of validity or enforceability of any
Financing Document;


 


(B)   any amendment or waiver of or any consent to
departure from any Financing Document (except, in the case of an effective
amendment to, waiver of or consent to a departure from any provision of this
Agreement, to the extent specified herein);


 


(C)   the existence of any claim, set-off, defense or
other right which the Borrower may have at any time against the beneficiary of
any Revolving Letter of Credit (or any Person or entity for whom such
beneficiary may be acting), the Agent, any Revolving Fronting Bank or any
Revolving Credit Loan Bank or any other Person or entity, whether in connection
with this Agreement, any other Financing Document or any unrelated transaction;


 


(D)  any statement or any other document presented under
any Revolving Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect whatsoever;


 


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Restated Credit Agreement


 


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(E)   payment by a Revolving Fronting Bank under any
Revolving Letter of Credit against presentation of a draft or document which
does not comply with the terms of such Revolving Letter of Credit; or


 


(F)   to the extent permitted under applicable law, any
other circumstance or happening whatsoever, whether or not similar to any of
the foregoing.


 


(g)   Payments by Revolving Credit
Loan Banks with Respect to Revolving Letters of Credit.


 


(i)            Each Revolving Credit
Loan Bank shall make available an amount equal to its ratable share of any
Revolving L/C Drawing under a Revolving Letter of Credit, in Federal or other
funds immediately available in New York City, to the applicable Revolving
Fronting Bank by 3:00 P.M. (New York City time) on the date on which the
Borrower is required to reimburse such Revolving Fronting Bank with respect to
such Revolving L/C Drawing pursuant to Section 2.03(f)(i), together with
interest on such amount for the period from and including the date of such
Revolving L/C Drawing to but excluding the date upon which such amount is to be
made available at the Federal Funds Rate on the date of such Revolving L/C
Drawing, at such Revolving Fronting Bank’s address referred to in Section 10.01;
provided that each Revolving
Credit Loan Bank’s obligation shall be reduced by its pro rata share of any
reimbursement theretofore paid by the Borrower in respect of such Revolving L/C
Drawing pursuant to Section 2.03(f)(i). 
The applicable Revolving Fronting Bank shall notify each Revolving
Credit Loan Bank of the amount of such Revolving Credit Loan Bank’s obligation
(which, in the case of any payment under an Alternative Currency Letter of
Credit, shall be the Dollar Equivalent thereof) in respect of any Revolving L/C
Drawing under a Revolving Letter of Credit not later than 1:30 P.M. (New
York City time) on the day such payment by such Revolving Credit Loan Bank is
due.  Each Revolving Credit Loan Bank
shall be subrogated to the rights of the applicable Revolving Fronting Bank
against the Borrower to the extent such payment due from such Revolving Credit
Loan Bank to such Revolving Fronting Bank is paid, plus interest thereon, from
and including the day such amount is due from such Revolving Credit Loan Bank
to such Revolving Fronting Bank to but excluding the day the Borrower makes
payment to such Revolving Fronting Bank pursuant to Section 2.03(f)(i),
whether before or after judgment, at a rate per annum equal to the sum of 2% plus the rate applicable to Base Rate
Loans for such day.  In the event that,
on the date of any Revolving L/C Drawing, (x) Total Outstandings exceeds
the Maximum Outstanding Exposure, (y) the applicable Revolving Fronting
Bank is not reimbursed by the Borrower on such date for the entire amount of
such Revolving L/C Drawing, and (z) the Revolving Credit Loan Banks,
pursuant to the last sentence of subsection (iv) below, are not obligated
to reimburse such Revolving Fronting Bank for the entire amount of such
Revolving L/C Drawing, the Agent shall, solely for purposes of determining the
portion of such Revolving L/C Drawing to be reimbursed by each Revolving Credit
Loan Bank, (A) allocate the respective Revolving Credit Loan Commitments
of the Revolving Credit Loan Banks to the Revolving Letter of Credit
Liabilities of each Revolving Letter of Credit on such date on a pro rata basis
(based upon (1) the proportion of the Revolving Credit Loan Commitments to
the aggregate amount of the Revolving Letter of Credit Liabilities of all
outstanding Revolving Letters of Credit and (2) each Revolving Credit Loan
Bank’s pro rata share of the Revolving Credit Loan Commitments), (B) based
on such allocation, determine the reimbursement obligation of each Revolving
Credit Loan Bank with respect to such Revolving L/C Drawing and (C) promptly



 


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Restated Credit Agreement


 


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notify each Revolving Credit Loan Bank of the
amount of its reimbursement obligation with respect to such Revolving L/C
Drawing.


 


(ii)           If any Revolving Credit
Loan Bank fails to pay any amount required pursuant to subsection (i) of
this Section 2.03(g) on the date on which such payment is due,
interest, payable on demand, shall accrue on such Revolving Credit Loan Bank’s
obligation to make such payment, for each day from and including the date such
payment becomes due to but excluding the date such Revolving Credit Loan Bank
makes such payment at a rate per annum equal to the Federal Funds Rate.  Any payment made by any Revolving Credit Loan
Bank after 3:00 P.M. (New York City time) on any Domestic Business Day
shall be deemed for purposes of the preceding sentence to have been made on the
next succeeding Domestic Business Day.


 


(iii)          If the Borrower shall
reimburse a Revolving Fronting Bank for any Revolving L/C Drawing under a
Revolving Letter of Credit after the Revolving Credit Loan Banks shall have made
funds available to such Revolving Fronting Bank with respect to such Revolving
L/C Drawing in accordance with subsection (i) of this Section 2.03(g),
such Revolving Fronting Bank shall promptly upon receipt of such reimbursement
distribute to each Revolving Credit Loan Bank its pro rata share thereof,
including interest, to the extent received by such Revolving Fronting Bank.


 


(iv)          The several obligations
of the Revolving Credit Loan Banks to the Revolving Fronting Banks hereunder
shall be absolute, irrevocable and unconditional under any and all
circumstances whatsoever and shall not be affected by any circumstance,
including, without limitation, (1) any set-off, counterclaim, recoupment,
defense or other right which any such Revolving Credit Loan Bank or any other
Person may have against the Agent, any Revolving Fronting Bank or any other
Person for any reason whatsoever; (2) the occurrence or continuance of a
Default or an Event of Default or the termination of the Revolving Credit Loan
or any Revolving Letter of Credit; (3) any adverse change in the condition
(financial or otherwise) of any Obligor or any other Person; (4) any
breach of any Financing Document by any party thereto; (5) the fact that
any condition precedent to the issuance of, or the making of any payment under,
any Revolving Letter of Credit was not in fact met; (6) any violation or
asserted violation of law by any Revolving Credit Loan Bank or any affiliate
thereof; or (7) to the extent permitted under applicable law, any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.  Each payment by each
Revolving Credit Loan Bank to a Revolving Fronting Bank for its own account
shall be made without any offset, abatement, withholding or reduction whatsoever.  If a Revolving Fronting Bank is required at
any time (whether before or after the Termination Date) to return to the
Borrower or to a trustee, receiver, liquidator, custodian or other similar
official any portion of the payments made by the Borrower to such Revolving
Fronting Bank in payment of any Reimbursement Obligation or interest thereon
upon the insolvency of the Borrower, or the commencement of any case or
proceeding under any bankruptcy, insolvency or other similar law with respect
to the Borrower, each Revolving Credit Loan Bank shall, on demand of such
Revolving Fronting Bank, forthwith return to such Revolving Fronting Bank any
amounts transferred to such Revolving Credit Loan Bank by such Revolving
Fronting Bank in respect thereof pursuant to this subsection plus such Revolving Credit Loan Bank’s pro
rata share of any interest on such payments required to be paid to the Person
recovering such payments plus
interest on the amount so demanded from the day such demand is made, if such
demand is made by 2:00 P.M. (New 


 


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Restated Credit Agreement


 


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York City time), or from the next following Domestic Business Day, if
such demand is made after 2:00 P.M. (New York City time), to but not
including the day such amounts are returned by such Revolving Credit Loan Bank
to such Revolving Fronting Bank at a rate per annum for each day equal to (A) the
Federal Funds Rate for the day of such demand and (B) the Base Rate plus 1% for each day thereafter.  Notwithstanding the foregoing or any other
provision contained herein, in no event shall any Revolving Credit Loan Bank be
obligated to make any payment to a Revolving Fronting Bank to the extent that
such payment would cause such Bank’s pro rata share of the Total Outstandings
hereunder to exceed such Bank’s Revolving Credit Loan Commitment; provided that the foregoing shall not
affect the obligation of the Borrower (which is absolute, unconditional and
irrevocable) to reimburse each Revolving Fronting Bank for the entire amount of
each payment made by such Revolving Fronting Bank under a Revolving Letter of
Credit, including any amount thereof that is not paid by any Revolving Credit
Loan Bank to such Revolving Fronting Bank (pursuant to this sentence or
otherwise).


 


(h)   Revolving Letter of Credit
Commission; Issuance Fee.


 


(i)            Revolving Letter of
Credit Commission.  The Borrower
agrees to pay to the Agent a letter of credit commission with respect to each
Revolving Letter of Credit issued at its request or for its account, computed
for each day from and including the date of issuance of such Revolving Letter
of Credit through and including the last day a Revolving L/C Drawing is
available under such Revolving Letter of Credit (the “Revolving
Letter of Credit Termination Date”), at the Revolving Letter of Credit Commission Rate on the
aggregate amount available for drawing under such Revolving Letter of Credit
from time to time (whether or not any conditions to drawing can then be met),
such fee to be for the account of the Revolving Credit Loan Banks ratably in
proportion to their Total Exposures. 
Such fee shall be payable quarterly in arrears (A) on the last
Domestic Business Day of each January, April, July and October occurring
on or before October 31, 2005, (B) on each March 31, June 30,
September 30 and December 31 commencing with December 31, 2005
and (C) upon the Termination Date.


 


(ii)           Issuance Fee.  The Borrower shall pay to each Revolving
Fronting Bank for its own account such fees with respect to each Revolving
Letter of Credit issued by such Revolving Fronting Bank for the account of the
Borrower as shall have been agreed between the Borrower and such Revolving
Fronting Bank.


 


(iii)          Limited Liability of
the Revolving Fronting Bank.  As
between a Revolving Fronting Bank, on the one hand, and the Borrower, on the
other, the Borrower assumes all risks of any acts or omissions of the
beneficiary and any transferee of any Revolving Letter of Credit with respect
to its use of such Revolving Letter of Credit. 
Neither a Revolving Fronting Bank nor any of its respective employees,
officers or directors shall be liable or responsible for:  (1) the use which may be made of any
Revolving Letter of Credit or for any acts or omissions of any beneficiary or
transferee in connection therewith; (2) the validity, sufficiency or
genuineness of documents, or of any endorsement(s) thereon, even if such
documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (3) payment by the Revolving Fronting
Bank against presentation of documents which do not comply with the terms of
any Revolving Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Revolving Letter of Credit; or (4) any
other circumstance whatsoever in making or failing to make payment under any
Revolving Letter of Credit; 


 


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Restated Credit Agreement


 


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provided that the
Borrower shall have a claim against the applicable Revolving Fronting Bank, and
such Revolving Fronting Bank shall be liable to the Borrower, to the extent,
but only to the extent, of any direct, as opposed to consequential or special,
damages suffered by the Borrower which are found in a final, unappealable
judgment of a court of competent jurisdiction to have been caused by (x) such
Revolving Fronting Bank’s willful misconduct or gross negligence in determining
whether documents presented under any Revolving Letter of Credit comply with
the terms thereof or (y) such Revolving Fronting Bank’s willful failure to
pay, or gross negligence resulting in a failure to pay, any Revolving L/C
Drawing after the presentation to it by the beneficiary (or any transferee of the
Revolving Letter of Credit) of a draft and other required documentation
strictly complying with the terms and conditions of the Revolving Letter of
Credit.  In furtherance and not in
limitation of the foregoing, a Revolving Fronting Bank may accept documents
that appear on their face to be in order, without responsibility for further
investigation.


 


(iv)          Revolving Fronting
Banks and Affiliates.  Each Revolving
Fronting Bank shall have the same rights and powers under the Financing
Documents as any other Bank and may exercise or refrain from exercising the
same as though they were not Revolving Fronting Banks (in each case to the
extent such Revolving Fronting Bank is also a Bank), and the Revolving Fronting
Banks and their respective affiliates may accept deposits from, lend money to,
and generally engage in any kind of business with the Borrower or any
Subsidiary or affiliate of the Borrower as if they were not Revolving Fronting
Banks hereunder.


 


(i)    Applicability of ISP98.  Unless otherwise expressly agreed by the
Revolving Fronting Bank and the Borrower when a Revolving Letter of Credit is
issued (or deemed issued), the rules of the “International Standby
Practices 1998” published by the Institute of International Banking Law and
Practice (or such later version thereof as may be in effect at the time
issuance) shall apply to the Revolving Letter of Credit.


 


Section 2.04  Evidence of Debt.


 


(a)   Each Bank Party shall maintain
in accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Bank Party resulting from each Loan owing
to such Bank Party from time to time, including the amounts of principal and
interest payable and paid to such Bank Party from time to time hereunder.  The Borrower agrees that upon notice by any
Bank Party to the Borrower (with a copy of such notice to the Agent) to the
effect that a promissory note or other evidence of indebtedness is required or
appropriate in order for such Bank Party to evidence (whether for purposes of
pledge, enforcement or otherwise) the Loans owing to, or to be made by, such
Bank Party, the Borrower shall promptly execute and deliver to such Bank Party,
with a copy to the Agent, a Revolving Credit Loan Note or a Term Loan Note, as
applicable, in substantially the form of Exhibits A-1 and A-2 hereto,
respectively, payable to the order of such Bank Party in a principal amount
equal to the Loans owing to, or to be made by, such Bank Party.  All references to Notes in the Financing
Documents shall mean Notes, if any, issued hereunder.


 


(b)   The Register maintained by the
Agent pursuant to Section 10.06(f) shall include a control account,
and a subsidiary account for each Bank Party, in which accounts 


 


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Restated Credit Agreement


 


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(taken together) shall be recorded (i) the
date and amount of each Loan made hereunder (or deemed to be made hereunder),
whether such Loan bears interest at the Base Rate or the Adjusted London
Interbank Offered Rate, and, if appropriate, the Interest Period applicable
thereto; (ii) the terms of each Assignment and Assumption delivered to and
accepted by it; (iii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Bank Party
hereunder; and (iv) the amount of any sums received by the Agent from the
Borrower hereunder and each Bank Party’s share thereof.


 


(c)   Entries made in good faith by
the Agent in the Register pursuant to subsection (b) above, and by each
Bank Party in its account or accounts pursuant to subsection (a) above,
shall be prima facie evidence of
the amount of principal and interest due and payable or to become due and
payable from the Borrower to, in the case of the Register, each Bank Party and,
in the case of such account or accounts, such Bank Party, under this Agreement,
absent manifest error; provided, however, that the failure of the Agent or
such Bank Party to make an entry, or any finding that an entry is incorrect, in
the Register or such account or accounts, shall not limit or otherwise affect
the obligations of the Borrower under this Agreement.


 


Section 2.05  Maturity of Loans.


 


(a) Each
Revolving Credit Loan shall mature, and the principal amount thereof shall be
due and payable (together with interest accrued thereon), on the Termination
Date in respect of the Revolving Credit Loan Facility, (b) each Initial
Term Loan shall mature, and the principal amount thereof shall be due and
payable (together with interest accrued thereon), on the Initial Term Loan
Termination Date and (c) each Incremental Term Loan shall mature, and the
principal amount thereof shall be due and payable (together with interest
accrued thereon) on the Incremental Term Loan Termination Date in respect of
such Incremental Term Loan Facility.


 


Section 2.06  Interest Rates.


 


(a)   Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the
date such Loan is made until it becomes due, at a rate per annum equal to the
Base Rate Margin applicable to such Loan plus
the Base Rate for such day.  Such
interest shall be payable quarterly in arrears on each Quarterly Payment Date.


 


(b)   Each Euro-Dollar Loan shall bear
interest on the outstanding principal amount thereof, for each day during each
Interest Period applicable thereto, at a rate per annum equal to the sum of the
Euro-Dollar Margin applicable to such Loan for such day plus the Adjusted London Interbank Offered
Rate applicable to such Interest Period. 
Such interest shall be payable for each Interest Period on the last day
thereof and, if such Interest Period is longer than three months, at intervals
of three months after the first day thereof.


 


(c)   Upon the occurrence and during
the continuance of an Event of Default described in Section 6.01(a) or
an Event of Default described in Section 6.01(g) or 6.01(h) with
respect to the Borrower, the Borrower shall pay interest on (x) (i) the
outstanding principal amount of each Base Rate Loan owing to each Bank Party,
payable on demand, at a 


 


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Restated Credit Agreement


 


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rate per annum equal at all times to 2% per
annum above the rate per annum required to be paid on such Base Rate Loan
pursuant to Section 2.06(a) above and (ii) to the fullest extent
permitted by law, the amount of any interest that is not paid when due, from
the date such amount shall be due until such amount shall be paid in full, at a
rate per annum equal to 2% per annum above the rate per annum required to be
paid on the Base Rate Loans on which such interest has accrued pursuant to Section 2.06(a) above
and (y)(i) the outstanding principal amount of each Euro-Dollar Loan owing
to each Bank Party payable on demand, at a rate per annum equal at all times to
a rate per annum equal to the higher of (i) the sum of 2% plus the Euro-Dollar Margin applicable to
such Loan plus the Adjusted
London Interbank Offered Rate applicable to such Euro-Dollar Loan and (ii) the
sum of 2% plus the Euro-Dollar
Margin applicable to such Loan plus
the quotient obtained (rounded upward, if necessary, to the next higher 1/100th
of 1%) by dividing (x) the average (rounded upward, if necessary, to the
next higher 1/16th of 1%) of the respective rates per annum at which
one day (or, if such amount due remains unpaid more than three Euro-Dollar
Business Days, then for such other period of time not longer than three months
as the Agent may select) deposits in dollars in an amount approximately equal
to such overdue payment due to each of the Reference Banks are offered to such
Reference Bank in the London interbank market for the applicable period
determined as provided above by (y) 1.00 minus
the Euro-Dollar Reserve Percentage (or, if the circumstances described in
clause (a) or (b) of Section 8.01 shall exist, at a rate per
annum equal to the sum of 2% plus
the relevant rate applicable to Base Rate Loans) (the “Euro-Dollar Default Rate”) and (ii) to the fullest
extent permitted by law, the amount of any interest that is not paid when due,
from the date such amount shall be due until such amount shall be paid in full,
at a rate per annum equal to the Euro-Dollar Default Rate for the Euro-Dollar
Loans on which such interest has accrued pursuant to Section 2.06(b) above.


 


(d)   The Agent shall determine each
interest rate applicable to the Loans and Reimbursement Obligations
hereunder.  The Agent shall give prompt
notice to the Borrower and the participating Banks of each rate of interest so
determined, and its determination thereof shall be conclusive in the absence of
manifest error.


 


(e)   Each Reference Bank agrees to
use its best efforts to furnish quotations to the Agent as contemplated by this
Section.  If any Reference Bank does not
furnish a timely quotation, the Agent shall determine the relevant interest
rate on the basis of the quotation or quotations furnished by the remaining
Reference Bank or Banks or, if none of such quotations is available on a timely
basis, the provisions of Section 8.01 shall apply.


 


(f)    The yield to maturity with
respect to any First Priority Secured Debt issued after the Effective Date and
consisting of a term loan facility or similar bank credit facility (taking into
account upfront fees paid to the lenders under such new First Priority Secured
Debt) may be no more than 0.25% per annum greater than the yield to maturity
with respect to the Initial Term Loans on the Closing Date (and the Borrower
agrees that the pricing of the Initial Term Loans (if any) will be increased
and or additional fees will be paid to the Banks (if any) to the extent
necessary to satisfy such requirement).


 


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Restated Credit Agreement


 


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Section 2.07  Method of Electing Interest Rates.


 


(a)   The Loans included in each
Borrowing shall bear interest initially at the type of rate specified by the
Borrower in the applicable Notice of Borrowing. 
Thereafter, the Borrower may from time to time elect to change or
continue the type of interest rate borne by each Group of Loans (subject to Section 2.07(d) and
the provisions of Article 8), as follows:


 


(i)            if
such Loans are Base Rate Loans, the Borrower may elect to convert such Loans to
Euro-Dollar Loans as of any Euro-Dollar Business Day;


 


(ii)           if
such Loans are Euro-Dollar Loans, the Borrower may elect to convert such Loans
to Base Rate Loans as of any Domestic Business Day or elect to continue such
Loans as Euro-Dollar Loans for an additional Interest Period, subject to Section 2.13
if any such conversion is effective on any day other than the last day of an
Interest Period applicable to such Loans.


 


Each
such election shall be made by delivering a notice (a “Notice of Interest Rate Election”) to the Agent not later than 11:00 A.M.
(New York City time) on the third Euro-Dollar Business Day before the
conversion or continuation selected in such notice is to be effective (unless
the relevant Loans are to be converted from Euro-Dollar Loans to Base Rate
Loans, in which case such notice shall be delivered to the Agent not later than
11:00 A.M. (New York City time) on the date such conversion is to be
effective).  A Notice of Interest Rate
Election may, if it so specifies, apply to only a portion of the aggregate
principal amount of the relevant Group of Loans; provided that (i) such portion is allocated ratably
among the Loans comprising such Group of Loans and (ii) the portion to
which such Notice applies, and the remaining portion to which it does not apply,
are each at least $5,000,000 (unless such portion is comprised of Base Rate
Loans).  If no such notice is timely
received before the end of an Interest Period for any Group of Loans consisting
of all Euro-Dollar Loans, the Borrower shall be deemed to have elected that
such Group of Loans be converted to Base Rate Loans at the end of such Interest
Period.


 


(b)   Each Notice of Interest Rate
Election shall specify:


 


(i)            the
Group of Loans (or portion thereof) to which such notice applies;


 


(ii)           the
date on which the conversion or continuation selected in such notice is to be
effective, which shall comply with the applicable clause of Section 2.07(a) above;


 


(iii)          if
the Loans comprising such Group are to be converted, the new type of Loans and,
if the Loans resulting from such conversion are to be Euro-Dollar Loans, the
duration of the next succeeding Interest Period applicable thereto; and


 


(iv)          if
such Loans are to be continued as Euro-Dollar Loans for an additional Interest
Period, the duration of such additional Interest Period.


 


Each
Interest Period specified in a Notice of Interest Rate Election shall comply
with the provisions of the definition of Interest Period.


 


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(c)   Promptly after receiving a
Notice of Interest Rate Election from the Borrower pursuant to Section 2.07(a) above,
the Agent shall notify each Bank of the contents thereof and such notice shall
not thereafter be revocable by the Borrower.


 


(d)   The Borrower shall not be
entitled to elect to convert any Loans to, or continue any Loans for an
additional Interest Period as, Euro-Dollar Loans if (i) the aggregate
principal amount of any Group of Loans consisting of all Euro-Dollar Loans created
or continued as a result of such election would be less than $5,000,000 or (ii) a
Default shall have occurred and be continuing when the Borrower delivers notice
of such election to the Agent.


 


(e)   If any Loan is converted to a
different type of Loan, the Borrower shall pay, on the date of such conversion,
the interest accrued to such date on the principal amount being converted.


 


Section 2.08  Commitment Fee.


 


The Borrower shall pay to the Agent, for the account of the Revolving
Credit Loan Banks, ratably in proportion to their Revolving Credit Loan
Commitments, a commitment fee of 1⁄2 of 1% per annum on the daily amount by which
the aggregate amount of the Revolving Credit Loan Commitments exceeds the
aggregate Total Outstandings.  Such
commitment fee shall accrue from and including the Effective Date to but
excluding the Termination Date (or earlier date of termination of the Revolving
Credit Loan Commitments in their entirety). 
Accrued commitment fees under this Section 2.08 shall be payable
quarterly in arrears on each March 31, June 30, September 30 and
December 31 and upon the date of termination of the Revolving Credit
Commitments in their entirety.


 


Section 2.09  Termination or Reduction of Revolving
Credit Loan Commitments.


 


(a)   Optional.  The Borrower may, upon at least three
Domestic Business Days’ notice to the Agent, (i) terminate the Revolving
Credit Loan Commitments in their entirety at any time, if no Revolving Credit
Loans or Revolving Letters of Credit are outstanding at such time or (ii) ratably
reduce from time to time by an aggregate amount of $5,000,000 or any larger
multiple thereof, the aggregate amount of the Revolving Credit Loan Commitments
in excess of the aggregate Total Outstandings.


 


(b)   Mandatory.  (i)  Scheduled Termination.  The Revolving Credit Loan Commitments shall
terminate on the Termination Date, and any Revolving Credit Loans and
Reimbursement Obligations then outstanding (together with accrued interest
thereon) shall be due and payable on such date.


 


(ii)           Net Cash Proceeds of
Asset Sales.


 


(x)            Other than in the case
of an Asset Sale involving the sale of assets or Equity Interests of, or other
Investments in, IPALCO or any of its Subsidiaries (an “IPALCO Asset
Sale”), on and after the date on which all of the Term Loan
Facilities have been paid in full, in the event that the Borrower shall at any
time, or from time to time, receive any Net Cash 


 


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Proceeds from Asset Sales, the Revolving Credit Loan
Commitments of the Revolving Credit Loan Banks shall, unless the Required Banks
otherwise agree, be ratably reduced by such amounts and at such times as may be
required to avoid any requirement that all or any portion of such Net Cash
Proceeds be applied to repay, prepay, repurchase or defease any Debt of the
Borrower that is subordinated in right of payment to the Debt of the Borrower
under the Financing Documents.


 


(y)           In the case of an
IPALCO Asset Sale, following the application of the Net Cash Proceeds thereof
to repay Term Loans in accordance with Section 2.10(b)(i) or if the
Term Loan Facilities have been paid in full, the Revolving Credit Loan
Commitments of the Revolving Credit Loan Banks shall, (A) unless the
Supermajority Banks otherwise agree or the Minimum Ratings Condition is met at
such time (after giving effect to such IPALCO Asset Sale), be ratably reduced
by an amount equal to the Banks’ Ratable Share of such remaining Net Cash
Proceeds (concurrently with the prepayment of outstanding Revolving Credit
Loans in accordance with Section 2.10(b)(i)) and (B) after giving
effect to any reduction in clause (A), unless the Required Banks otherwise
agree, be ratably reduced by such amounts and at such times as may be required
to avoid any requirement that all or any portion of such Net Cash Proceeds be
applied to repay, prepay, repurchase or defease any Debt of the Borrower that
is subordinated in right of payment to the Debt of the Borrower under the
Financing Documents.


 


(c)   Reductions Permanent.  All reductions of the Revolving Credit Loan
Commitments pursuant to this Section 2.09 shall be permanent.


 


Section 2.10  Prepayment of the Loans.


 


(a)           Optional.  (i)  Subject in the case of any
Euro-Dollar Loans to Section 2.12, the Borrower may, upon at least one
Domestic Business Day’s notice to the Agent, prepay any Loans that bear
interest at the Base Rate or upon at least three Euro-Dollar Business Days’
notice to the Agent, prepay any Euro-Dollar Loans, in each case in whole at any
time, or from time to time in part in amounts aggregating $5,000,000 or any
larger multiple of $1,000,000, by paying the principal amount to be prepaid
together with (x) accrued interest thereon to the date of prepayment and (y) in
the case of prepayments of Initial Term Loans prior to July 29, 2004, a
premium equal to 1.00% of the aggregate principal amount so prepaid.


 


(ii)           Upon receipt of a
notice of prepayment pursuant to this Section 2.10, the Agent shall
promptly notify each Bank of the contents thereof and of such Bank’s ratable
share of such prepayment and such notice shall not thereafter be revocable by
the Borrower.


 


(b)   Mandatory.  (i)  The Borrower shall, on the third
Business Day following the receipt by the Borrower after the Effective Date of (A) Net
Cash Proceeds from any Asset Sales or (B) Net Cash Proceeds from the
incurrence of any Bridge Debt, offer to prepay, on a pro rata basis, an
aggregate principal amount of the Term Loans in an amount equal to the Banks’
Ratable Share of such Net Cash Proceeds and the Term Loan Banks shall have the
option to accept or refuse such prepayment in accordance with the provisions
set forth in Section 2.10(c).  Upon
the payment in full of the Term Loans, the Borrower shall apply such Net Cash
Proceeds to prepay the Revolving Credit Loans outstanding at such time (without



 


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any reduction of Revolving Credit Loan
Commitments, except as set forth in Section 2.09(b)(ii)).


 


(ii)           The Borrower shall, on
the third Business Day following the date of receipt of Net Cash Proceeds from
the issuance of Debt by any Subsidiary of the Borrower permitted pursuant to Section 5.07(b)(ii) (but
only to the extent applicable pursuant to the proviso thereof) and Section 5.07(b)(vi) (but
only to the extent the Debt was incurred by IPALCO or a Subsidiary Guarantor),
offer to prepay an aggregate principal amount of the Term Loans in an aggregate
amount equal to the Banks’ Ratable Share of such Net Cash Proceeds (other than
$200,000,000 of additional Debt of IPALCO and the Subsidiary Guarantors
incurred after the Effective Date).  The
Term Loan Banks shall have the option to accept or refuse any prepayment
pursuant to this Section 2.10(b)(ii) in accordance with the
provisions set forth in Section 2.10(c). 
So long as Net Cash Proceeds referred to in this Section 2.10(b)(ii) are
received by the Borrower, the Borrower agrees to use all reasonable efforts to
cause all such Net Cash Proceeds permitted to be distributed to be so
distributed.  Upon the payment in full of
the Term Loans, the Borrower shall apply such Net Cash Proceeds to prepay the
Revolving Credit Loans outstanding at such time (without any reduction of
Revolving Credit Loan Commitments).


 


(c)   Term Loan Opt-Out.  With respect to any prepayment of a Term Loan
Facility pursuant to Section 2.10(b) above, the Borrower shall notify the Agent
by 12:00 Noon (New York City time) on or before the third Business Day after
the Borrower is in receipt of the applicable Net Cash Proceeds of the receipt
of such Net Cash Proceeds and its offer to prepay the Term Loans on the fourth
Business Day following receipt of such notice by the Agent.  The Agent shall then notify each of the Term
Loan Banks of such offer.  Each Term Loan
Bank, at its option, may elect not to accept such prepayment.  Any Term Loan Bank declining such prepayment
shall give written notice to the Agent by 12:00 Noon (New York City time) on
the third Business Day immediately following the date the Term Loan Banks
receive notice of such prepayment.  If a
Term Loan Bank fails to give notice by 12:00 Noon as set forth in the
immediately preceding sentence, such Term Loan Bank shall be deemed to have
accepted the offer.  Any amounts that
would otherwise have been applied to prepay such declining Term Loan Bank shall
instead be retained by the Borrower.


 


Section 2.11  General Provisions as to Payments.


 


(a)   The Borrower shall make each
payment of principal of, and interest on, the Loans and Reimbursement
Obligations and of fees hereunder, not later than 12:00 Noon (New York City
time) on the date when due, in Federal or other funds immediately available in
New York City, without set-off, counterclaim or other deduction, to the Agent
at its address referred to in Section 10.01.  The Agent will promptly distribute to each
Bank Party its ratable share of each such payment received by the Agent for the
account of the Bank Parties.  Whenever
any payment of principal of, or interest on, the Base Rate Loans or
Reimbursement Obligations or of fees shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be extended to the
next succeeding Domestic Business Day.  Whenever
any payment of principal of, or interest on, the Euro-Dollar Loans shall be due
on a day which is not a Euro-Dollar Business Day, the date for payment thereof
shall be extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case the
date for 


 


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Restated Credit Agreement


 


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payment thereof shall be the next preceding
Euro-Dollar Business Day.  If the date
for any payment of principal is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time.


 


(b)   Unless the Agent shall have
received notice from the Borrower prior to the date on which any payment is due
from the Borrower to the Bank Parties hereunder that the Borrower will not make
such payment in full, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date and the Agent may, in reliance upon
such assumption, cause to be distributed to each Bank Party on such due date an
amount equal to the amount then due such Bank Party.  If and to the extent that the Borrower shall
not have so made such payment, each Bank Party shall repay to the Agent
forthwith on demand such amount distributed to such Bank Party together with
interest thereon, for each day from the date such amount is distributed to such
Bank Party until the date such Bank Party repays such amount to the Agent, at
the Federal Funds Rate.


 


Section 2.12  Funding Losses.


 


If the
Borrower makes any payment of principal with respect to any Euro-Dollar Loan or
any Euro-Dollar Loan is converted to a Base Rate Loan (pursuant to Article 2,
6 or 8 or otherwise) on any day other than the last day of an Interest Period
applicable thereto, or the last day of an applicable period fixed pursuant to Section 2.06(c),
or if the Borrower fails to borrow, prepay, convert or continue any Euro-Dollar
Loans after notice has been given to any Bank Party in accordance with Section 2.02(b),
2.07(c) or 2.10(a), the Borrower shall reimburse each Bank Party within 15 days
after demand for any resulting loss or expense incurred by it (or by an
existing or prospective Participant in the related Loan), including (without
limitation) any loss incurred in obtaining, liquidating or employing deposits
from third parties, but excluding loss of margin for the period after such
payment or conversion or failure to borrow, prepay, convert or continue; provided that such Bank Party shall have
delivered to the Borrower a certificate as to the amount of such loss or
expense, which certificate shall be conclusive in the absence of manifest
error.


 


Section 2.13  Computation of Interest and Fees.


 


Interest
based on the Base Rate hereunder shall be computed on the basis of a year of
365 days (or 366 days in a leap year) and paid for the actual number of days
elapsed (including the first day but excluding the last day).  All other interest and fees shall be computed
on the basis of a year of 360 days and paid for the actual number of days
elapsed (including the first day but excluding the last day).


 


Section 2.14  Revolving L/C Cash Collateral Account.


 


(a)   All amounts required to be
deposited as cash collateral with the Collateral Agent pursuant to Section 2.15
or Section 6.03 shall be deposited in a cash collateral account (the “Revolving L/C Cash Collateral
Account”)
established by the Borrower with the Collateral Agent, to be held, applied or
released for application as provided in this Section 2.14 and Section 2.15.


 


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(b)   The Borrower hereby grants to
the Collateral Agent for the ratable benefit of the Revolving Fronting Banks
and the other Lender Parties as their respective interests appear, a security
interest in the Borrower’s right, title and interest in and to the Revolving
L/C Cash Collateral Account and all funds and financial assets from time to
time credited thereto, all interest, dividends, distributions, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such funds
and financial assets, and all certificates and instruments, if any, from time
to time representing or evidencing the Revolving L/C Cash Collateral Account
and all of proceeds of any of the foregoing (the “Revolving L/C Collateral”), to secure all of the
Borrower’s Obligations hereunder and the other Credit Agreement Documents.


 


(c)   If and when any portion of the
Revolving Letter of Credit Liabilities on which any deposit of cash collateral
was based (the “Relevant Contingent Exposure”) shall become fixed (a “Direct Exposure”) as a result of the payment by a Revolving Fronting Bank of
a draft presented under any relevant Revolving Letter of Credit, (including any
such payment under an Alternative Currency Letter of Credit for which the
relevant Revolving Fronting Bank, as a result of fluctuations in currency
exchange rates, is not reimbursed in full by the Revolving Credit Loan Banks)
the amount of such Direct Exposure (but not more than the amount in the
Revolving L/C Cash Collateral Account at the time) shall be withdrawn by the
Agent from the Revolving L/C Cash Collateral Account and shall be paid to the
relevant Revolving Fronting Bank to be applied against such Direct Exposure and
the Relevant Contingent Exposure shall thereupon be reduced by such amount.


 


(d)   Interest and other payments and
distributions made on or with respect to the Revolving L/C Collateral held by
the Collateral Agent shall be for the account of the Borrower and shall
constitute additional Revolving L/C Collateral to be held by the Agent; provided that the Agent shall have no
obligation to invest any Revolving L/C Collateral on behalf of the Borrower or
any other Person.  Beyond the exercise of
reasonable care in the custody thereof, the Agent shall have no duty as to any
Revolving L/C Collateral in its possession or control or in the possession or
control of any agent or bailee or any income thereon or as to the preservation
of rights against prior parties or any other rights pertaining thereto.  The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Revolving L/C
Collateral in its possession if the Revolving L/C Collateral is accorded
treatment substantially equal to that which it accords its own property, and
shall not be liable or responsible for any loss or damage to any of the
Revolving L/C Collateral, or for any diminution in the value thereof, by reason
of the act or omission of any agent or bailee selected by the Collateral Agent
in good faith.  All expenses and
liabilities incurred by the Collateral Agent in connection with taking, holding
and disposing of any Revolving L/C Collateral (including customary custody and
similar fees with respect to any Revolving L/C Collateral held directly by the
Agent and the Revolving L/C Cash Collateral Account) shall be paid by the
Borrower from time to time upon demand. 
Upon an Actionable Default, the Collateral Agent shall be entitled to
apply (and, at the request of the Required Banks but subject to applicable law,
shall apply) Revolving L/C Collateral or the proceeds thereof to payment of any
such expenses, liabilities and fees. 
After the termination of the Revolving Credit Loan Commitments of the
Revolving Loan Credit Loan Banks, the termination of all Revolving Letters of
Credit and the repayment in full of all outstanding Reimbursement Obligations
in respect of the Revolving Letters of Credit, the 


 


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Collateral Agent shall transfer the remaining
Revolving L/C Collateral or the proceeds thereof (the “Excess Revolving L/C Collateral”) to the Collateral
Account.  Notwithstanding any other term
or provision of this Agreement, and for the avoidance of doubt, the Revolving
L/C Collateral shall be paid first
to the relevant Revolving Fronting Bank in satisfaction of any Direct Exposures
or Relevant Contingent Exposures and no Revolving L/C Collateral shall be
released or disbursed to any party other than the relevant Revolving Fronting
Bank until the satisfaction of all Revolving Letter of Credit Liabilities and
the termination of the Revolving Credit Loan Commitments and all Revolving Letters
of Credit.


 


Section 2.15  Computations of Outstandings;
Determination of Available Amount of Alternative Currency Letters of Credit.


 


(a)   Whenever reference is made in
this Agreement to the Total Outstandings on any date under this Agreement, such
reference shall refer to the Total Outstandings on such date after giving
effect to all Extensions of Credit to be made on such date.  For purposes of calculating the Total
Outstandings on any date of determination, the aggregate Available Amount in
respect of all Alternative Currency Letters of Credit shall be deemed to equal
the amount thereof most recently reported to the Agent pursuant to subsection (b) below.  At no time shall the Total Outstandings under
this Agreement exceed the sum of (i) the aggregate amount of the Revolving
Credit Loan Commitments, plus (ii) the
amounts on deposit in the Revolving L/C Cash Collateral Account (such sum being
referred to herein as the “Maximum Outstanding Exposure”).  References to the Unused
Revolving Credit Loan Commitments shall refer to the excess, if any, of the
Revolving Credit Loan Commitments over the Total Outstandings; and references
to the unused portion of any Revolving Credit Loan Commitment shall refer to
the Unused Revolving Credit Loan Commitment of such Bank.


 


(b)   Each Revolving Fronting Bank
that issues an Alternative Currency Letter of Credit shall (i) on the
first Domestic Business Day of each calendar month, deliver to the Agent a
schedule listing (A) each outstanding Alternative Currency Letter of
Credit issued by such Revolving Fronting Bank, (B) the maximum aggregate
amount available to be drawn under each such Alternative Currency Letter of
Credit at any time on or after such date (denominated in the applicable
Alternative Currency, assuming the compliance with and satisfaction of all
conditions for Revolving L/C Drawing enumerated therein) and (C) the
equivalent in Dollars of such amount (as determined by such Revolving Fronting
Bank on the basis of exchange rates available to or otherwise used by such
Revolving Fronting Bank), together with the applicable exchange rate utilized
by such Revolving Fronting Bank and the source thereof (it being agreed and
understood that such applicable exchange rate may be adjusted by a reasonable
and customary volatility factor as agreed by the Borrower and such Revolving
Fronting Bank); (ii) on the date of issuance of any Alternative Currency
Letter of Credit (including, if any Alternative Currency Letters of Credit are
issued or deemed issued on the Closing Date, on the Closing Date), deliver to
the Agent a schedule listing the information described in clauses (B) and (C) above;
(iii) on the date of any increase or decrease in the Available Amount of
any Alternative Currency Letter of Credit (other than any increase or decrease
attributable solely to currency exchange rate fluctuations), deliver to the
Agent a schedule listing the information described in clauses (B) and (C) above
after 


 


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giving effect to such increase or decrease
(as the case may be) and (iv) not later than one Domestic Business Day
after its receipt of a written request therefor from the Agent or any Bank,
deliver to the Agent a schedule listing the information described in clauses
(A), (B) and (C) above.  The
Agent shall promptly after its receipt thereof deliver a copy of each such
schedule to the Collateral Agent, the Borrower and the Banks.  For all purposes under this Agreement, unless
otherwise expressly set forth herein, the Available Amount in respect of each
Alternative Currency Letter of Credit shall be deemed to equal, on any date of
determination, the Dollar Equivalent thereof as most recently reported to the
Agent by the relevant Revolving Fronting Bank pursuant to this subsection (b).


 


(c)   If, on (i) the date that
any schedule is delivered by a Revolving Fronting Bank to the Agent pursuant to
subsection (b) above; (ii) any date, after giving effect to reduction
in the Revolving Credit Loan Commitments or (iii) any other date, Total
Outstandings on such date (calculated pursuant to subsection (a) and (b) above)
exceeds the Maximum Outstanding Exposure, then within two Domestic Business
Days thereafter the Borrower shall be obligated to deposit cash collateral with
the Collateral Agent in the Revolving L/C Cash Collateral Account in an amount
equal to such excess to be held, applied or released for application as
provided in Section 2.14.


 


(d)   If at any time the Maximum
Outstanding Exposure exceeds the Total Outstandings hereunder, the Borrower may
provide a written notice to the Collateral Agent requesting the Collateral
Agent to withdraw such excess amount from the Revolving L/C Cash Collateral
Account and pay such amount to the Borrower, and, provided that no Actionable Default shall have occurred and
be continuing, the Collateral Agent shall promptly undertake such actions in
accordance with the instructions of the Borrower.  If an Actionable Default shall have occurred
and be continuing, the Collateral Agent shall not take any of the foregoing
actions and, if and when requested by the Required Banks, the amounts held in
the Revolving L/C Cash Collateral Account shall be withdrawn by the Collateral
Agent, and the proceeds thereof shall be first
applied by the Collateral Agent to repay the Total Outstandings and other due
and unpaid amounts required to be paid by the Borrower hereunder and second, held, applied or transferred as
provided in Section 2.14.


 


Section 2.16  Alternative Currency Letter of Credit
Issuances.


 


It is
understood that, if Revolving Letters of Credit are issued in an Alternative
Currency, a circumstance may arise where the United States dollars (“Dollars”) needed to reimburse a Revolving
Fronting Bank may exceed the Unused Revolving Credit Loan Commitment of the
Revolving Credit Loan Banks and the amounts on deposit in the Revolving L/C
Cash Collateral Account available for that purpose.  This situation could occur if an Alternative
Currency exchange rate between the currency of a Revolving Letter of Credit
issuance and Dollars changes between the date of issuance of, and the date of
funding a Revolving L/C Drawing on, an Alternative Currency Letter of Credit
(or funding a deposit to the Revolving L/C Cash Collateral Account to cover
issuances in excess of the Revolving Credit Loan Commitments) so that more
Dollars are needed to purchase the Alternative Currency on the date of funding
of the Revolving L/C Drawing on an Alternative Currency Letter of Credit (or
funding a deposit to the Revolving L/C Cash Collateral Account) than would have
been needed to fund a Revolving L/C Drawing made on the issuance date of such
Revolving Letter of Credit 


 


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(i.e., the
currency of issuance has appreciated against the Dollar between the date of
issuance and the date of funding or cash collateral deposit).  In such a circumstance, the Revolving
Fronting Banks agree as follows:  (a) (x) Any
shortfall under the Revolving Credit Loan Commitment to purchase participations
in Revolving L/C Drawings under Revolving Letters of Credit shall be allocated pro rata among the Revolving Fronting
Banks who have issued Alternative Currency Letters of Credit for which the
currency of issuance has appreciated against the Dollar (“Adverse
Alternative Currency Letters of Credit”); (y) the pro rata allocation shall be based on
the Dollar Equivalent of the face amount of each Adverse Alternative Currency
Letter of Credit, measured at the issuance date of each such Adverse
Alternative Currency Letter of Credit and (z) Revolving Credit Loan
Commitments shall not be used to purchase participations in Adverse Alternative
Currency Letters of Credit to the extent that use of those Revolving Credit
Loan Commitments covers any increase in the Dollar Equivalent of an Adverse
Alternative Currency Letters of Credit since the date of issuance of the
Revolving Letter of Credit if following such purchase remaining Unused Revolving
Credit Loan Commitments are insufficient to purchase participations in the
remaining outstanding Revolving Letters of Credit and (b) amounts
deposited in the Revolving L/C Cash Collateral Account shall be allocated first to cover shortfalls to the extent existing on the last
date of actual deposit to the Revolving L/C Cash Collateral Account, or if
later, the most recent date of determination pursuant to Section 2.15(b),
and second to any additional shortfalls
(allocated pro rata among such shortfalls); provided that funds on deposit in the Revolving L/C Cash
Collateral Account, if any, may not be applied to fund a Revolving L/C Drawing
on an Adverse Alternative Currency Letter of Credit to the extent those funds
have been allocated to cover an exposure existing on the last date of deposit
to the Revolving L/C Cash Collateral Account if following the application a
previously covered exposure is left without cash collateral.


 


Section 2.17  Increase in Term Loan Commitments.


 


(a)           The Borrower may, at
any time and from time to time prior to the later of (x) the Initial Term
Loan Termination Date and (y) any Incremental Term Loan Termination Date,
by notice to the Agent, request the addition of one or more new term loan
facilities (each, an “Incremental Term Loan
Facility”) or one or more increases in the Commitments under a Term
Loan Facility existing at the time of such request (each, a “Commitment Increase”) in an aggregate
amount up to $500,000,000 plus
the sum of all amounts applied from time to time after the Effective Date to
permanently prepay Term Loans pursuant to Section 2.10 hereof or to
permanently reduce Revolving Credit Loan Commitments pursuant to Section 2.09
hereof less the aggregate amount
of Revolving Credit Loan Commitment Increases pursuant to Section 2.18, to
be effective as of a date that is at least 90 days prior to the scheduled
Termination Date then in effect (each, an “Increase
Date”) as specified in the related notice to the Agent; provided,  however,
that (i) in no event shall the aggregate amount of such Commitment
Increases exceed $700,000,000 less
the aggregate amount of Revolving Credit Loan Commitment Increases pursuant to Section 2.18,
(ii) on the date of any request by the Borrower for a Commitment Increase
and on the related Increase Date, the applicable conditions set forth in Section 3.02
and in clause (d) of this Section 2.17 shall be satisfied and (iii) if
the request is for an Incremental Term Loan Facility, such Incremental Term
Loan Facility shall contain such other terms as may be agreed by the Borrower,
the Agent and the Incremental Term Loan Banks, provided
that (A) the final scheduled maturity date of the Incremental Term Loan
Facility shall in no event be 


 


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Restated Credit Agreement


 


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prior to the Initial Term Loan Termination Date and (B) no
Bank shall have any obligation to participate in any Incremental Term Loan
Facility or any Commitment Increase.


 


(b)   The Agent shall promptly notify
the Initial Term Loan Banks of any request by the Borrower for a Commitment
Increase, which notice shall include (i) the proposed amount of such
requested Commitment Increase, (ii) the proposed Increase Date and (iii) the
date by which Initial Term Loan Banks wishing to participate in the Commitment
Increase must commit to an increase in the amount of their respective
Commitments (the “Increase Commitment Date”).  Each Initial Term Loan Bank that is willing
to participate in the requested Commitment Increase shall, in its sole
discretion, give written notice to the Agent on or prior to the applicable
Increase Commitment Date of the amount by which it is willing either to
increase its Initial Term Loan Commitment or commit to the Incremental Term
Loan Facility.  If the Initial Term Loan
Banks notify the Agent that they are willing to participate in a Commitment
Increase by an aggregate amount that exceeds the amount of the requested
Commitment Increase, the requested Commitment Increase shall be allocated among
the Initial Term Loan Banks willing to participate therein in such amounts as
are agreed between the Borrower and the Agent.


 


(c)   Promptly following the
applicable Increase Commitment Date, the Agent shall notify the Borrower as to
the amount, if any, by which the Initial Term Loan Banks are willing to
participate in the requested Commitment Increase.  If the aggregate amount by which the Initial
Term Loan Banks are willing to participate in the requested Commitment Increase
on any such Increase Date is less than the requested Commitment Increase, then
the Borrower may extend offers to one or more Eligible Assignees to participate
in any portion of the requested Commitment Increase that has not been committed
to by the Initial Term Loan Banks as of the applicable Increase Commitment
Date; provided, however,
that the Initial Term Loan Commitment or Incremental Term Loan Commitment, as
the case may be, of each such Eligible Assignee shall be in an amount equal to
at least $1,000,000.


 


(d)           On the applicable
Increase Date, each Eligible Assignee that accepts an offer to participate in a
requested Commitment Increase in accordance with Section 2.17(c) shall
become a Bank party to this Agreement as of the applicable Increase Date and
the Initial Term Loan Commitment or the Incremental Term Loan Commitment, as
the case may be, of each Initial Term Loan Bank participating in such
Commitment Increase shall be so increased by such amount (or by the amount
allocated to such Initial Term Loan Bank pursuant to the last sentence of Section 2.17(b))
as of such Commitment Increase Date; provided, however, that the Agent shall have received on or before the
applicable Increase Date the following, each dated such date:


 


(i)            (A) certified
copies of resolutions of the Board of Directors (or a committee thereof) of the
Loan Parties approving the applicable Commitment Increase and the corresponding
modifications to this Agreement and (B) an opinion of counsel for each of
the Loan Parties (which may be an opinion of in-house counsel), each in form
and substance reasonably satisfactory to the Agent;


 


(ii)           an assumption agreement
from each Eligible Assignee, if any, in form and substance satisfactory to the
Borrower and the Agent (each an “Assumption
Agreement”), duly
executed by such Eligible Assignee, the Agent and the Borrower; and


 


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(iii)          confirmation from each
Initial Term Loan Bank of the increase in the amount of its Initial Term Loan
Commitment or Incremental Term Loan Commitment, as the case may be, in a
writing satisfactory to the Borrower and the Agent.


 


On the
applicable Increase Date, upon fulfillment of the conditions set forth in the
immediately preceding sentence of this Section 2.17(d) and the
conditions set forth in Section 3.02, (x) the Agent shall notify the
Initial Term Loan Banks and the Additional Term Loan Banks participating in
such Commitment Increase and the Borrower, on or before 11:00 A.M. (New
York City time), by telecopier or telex, of the occurrence of the applicable
Commitment Increase to be effected on the related Increase Date, (y) each
Initial Term Loan Bank participating in such Commitment Increase and each
Additional Term Loan Bank participating in such Commitment Increase shall make
a single advance to the Borrower in an amount equal to its agreed commitment in
respect of the Commitment Increase; provided
that after taking into account such advance, the aggregate principal amount of
the Term Loans of each such participating Term Loan Bank shall not exceed such
Term Loan Bank’s Total Term Loan Commitments and (z) the Agent shall
record in the Register maintained by the Agent pursuant to Section 10.06(f) the
relevant information with respect to each Initial Term Loan Bank and each
Additional Term Loan Bank participating in such Commitment Increase on such
date.


 


Section 2.18  Increase in Revolving Credit Loan
Commitments.


 


(a)   The Borrower may, at any time
and from time to time prior to the Termination Date of the Revolving Credit
Loan Facility, by notice to the Agent, request one or more increases in the
Commitments under the Revolving Credit Loan Facility existing at the time of
such request (each, a “Revolving Credit Loan
Commitment Increase”) in an aggregate amount up to $500,000,000 plus the sum of all amounts applied from
time to time after the Effective Date to permanently reduce Revolving Credit
Loan Commitments pursuant to Section 2.09 hereof or to permanently repay
Term Loans pursuant to Section 2.10 hereof less
the aggregate amount of Incremental Term Loan Facilities and Commitment
Increases pursuant to Section 2.17, to be effective as of a date that is
at least 90 days prior to the scheduled Termination Date then in effect (each,
a “Revolving Credit Increase Date”)
as specified in the related notice to the Agent; provided, however,
that (i) in no event shall the aggregate amount of such Revolving Credit
Loan Commitment Increases exceed $700,000,000 less
the aggregate amount of Incremental Term Loan Facilities and Commitment
Increases pursuant to Section 2.17 and (ii) on the date of any
request by the Borrower for a Revolving Credit Loan Commitment Increase and on
the related Revolving Credit Increase Date, the applicable conditions set forth
in Section 3.02 and in clause (d) of this Section 2.18
shall be satisfied, provided that
no Bank shall have any obligation to participate in any Revolving Credit Loan
Commitment Increase.


 


(b)   The Agent shall promptly notify
the Revolving Credit Loan Banks of any request by the Borrower for a Revolving
Credit Loan Commitment Increase, which notice shall include (i) the
proposed amount of such requested Revolving Credit Loan Commitment Increase, (ii) the
proposed Revolving Credit Increase Date and (iii) the date by which Revolving
Credit Loan Banks wishing to participate in the Revolving Credit Loan
Commitment Increase must commit to an increase in the amount of their
respective 


 


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Restated Credit Agreement


 


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Revolving Credit Loan Commitments (the “Revolving Credit Loan Increase
Commitment Date”).  Each Revolving Credit Loan Bank that desires
to participate in the requested Revolving Credit Loan Commitment Increase
shall, in its sole discretion, give written notice to the Agent on or prior to
the applicable Revolving Credit Loan Increase Commitment Date of the amount by
which it desires to increase its Revolving Credit Loan Commitment.


 


(c)   The Borrower may extend offers
to one or more Eligible Assignees to participate in any portion of the
requested Revolving Credit Loan Commitment Increase; provided, however,
that the Revolving Credit Loan Commitment of each such Eligible Assignee shall
be in an amount equal to at least $1,000,000. 
Promptly following the applicable Revolving Credit Loan Increase Commitment
Date, the Agent shall notify the Borrower as to the amount, if any, by which
the Revolving Credit Loan Banks and any Eligible Assignees are willing to
participate in the requested Revolving Credit Loan Commitment Increase.  In all cases (including if the aggregate
amount by which the Revolving Credit Loan Banks and any Eligible Assignees are
willing to participate in the requested Revolving Credit Loan Commitment
Increase on any such Revolving Credit Increase Date exceeds the amount of the
requested Revolving Credit Loan Commitment Increase), the requested Revolving
Credit Loan Commitment Increase shall be allocated among the Revolving Credit
Loan Banks and any Eligible Assignees willing to participate therein in such
amounts as are agreed between the Borrower and the Agent.


 


(d)   On the applicable Revolving
Credit Increase Date, each Eligible Assignee that accepts an offer to
participate in a requested Revolving Credit Loan Commitment Increase in
accordance with Section 2.18(c) shall become a Bank party to this
Agreement as of the applicable Revolving Credit Increase Date and the Revolving
Credit Loan Commitment of each Revolving Credit Loan Bank participating in such
Revolving Credit Loan Commitment Increase shall be increased by the amount
allocated to such Revolving Credit Loan Bank pursuant to the last sentence of Section 2.18(c))
as of such Revolving Credit Increase Date; provided,
however, that the Agent shall
have received on or before the applicable Revolving Credit Increase Date the following,
each dated such date:


 


(i)            (A) certified
copies of resolutions of the Board of Directors (or a committee thereof) of the
Loan Parties approving the applicable Revolving Credit Loan Commitment Increase
and the corresponding modifications to this Agreement and (B) an opinion
of counsel for each of the Loan Parties (which may be an opinion of in-house
counsel), each in form and substance reasonably satisfactory to the Agent;


 


(ii)           an
assumption agreement from each Eligible Assignee, if any, in form and substance
satisfactory to the Borrower and the Agent (each a “Revolving
Credit  Assumption Agreement”),
duly executed by such Eligible Assignee, the Agent and the Borrower; and


 


(iii)          confirmation
from each Revolving Credit Loan Bank of the increase in the amount of its
Revolving Credit Loan Commitment in a writing satisfactory to the Borrower and
the Agent.


 


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On the applicable Revolving Credit Increase Date, upon
fulfillment of the conditions set forth in the immediately preceding sentence
of this Section 2.18(d) and the conditions set forth in Section 3.02,
(x) the Agent shall notify the existing Revolving Credit Loan Banks and
any new Revolving Credit Loan Banks participating in such Revolving Credit Loan
Commitment Increase and the Borrower, on or before 11:00 A.M. (New York
City time), by telecopier or telex, of the occurrence of the applicable
Revolving Credit Loan Commitment Increase to be effected on the related
Revolving Credit Increase Date and (y) the Agent shall record in the Register
maintained by the Agent pursuant to Section 10.06(f) the relevant information
with respect to each existing Revolving Credit Loan Bank and each new Revolving
Credit Loan Bank participating in such Revolving Credit Loan Commitment
Increase on such date.


 


ARTICLE
III



CONDITIONS


 


Section 3.01  Closing.


 


The
closing under the Existing Bank Credit Agreement occurred on March 17,
2004 when all the following conditions had been satisfied:


 


(a)           The
Borrower shall have paid all accrued fees of the Agent, the Collateral Agent, the
Arranger Parties and the Banks and all accrued expenses of the Agent and the
Collateral Agent (including, without limitation, all fees and expenses of
counsel to the Agent payable pursuant to Section 10.03);


 


(b)           The
Agent shall have received, if requested, duly executed Notes of the Borrower
for the account of each Bank that has so requested, dated on or before the
Closing Date complying with the provisions of Section 2.04;


 


(c)           The
Agent shall have received (i) an opinion of the Assistant General Counsel
of the Borrower, substantially in the form of Exhibit B-1 hereto, (ii) an
opinion of Davis Polk & Wardwell, special counsel for the Borrower,
substantially in the form of Exhibit B-2 hereto, (iii) opinions of
special counsel for certain Subsidiaries of the Borrower in each of the
jurisdictions in which the Required Banks may reasonably request, substantially
in the form of Exhibit B-3 hereto, (iv) an opinion of Morris,
Nichols, Arsht & Tunnell, Delaware counsel for the Borrower,
substantially in the form of Exhibit B-4 hereto, (v) an opinion of
Maples and Calder, Cayman Islands counsel for the Borrower, substantially in
the form of Exhibit B-5 hereto, and (vi) an opinion of Conyers Dill &
Pearman, British Virgin Islands counsel for the Borrower, substantially in the
form of Exhibit B-6 hereto, each dated the Closing Date (except for the
opinions to be delivered pursuant to clause (iii) above which shall be
dated on or about the Closing Date) and covering such additional matters
relating to the transactions contemplated hereby as the Required Banks may
reasonably request;


 


(d)           The
Agent shall have received an opinion of Shearman & Sterling, special
counsel for the Agent, substantially in the form of Exhibit B-7 hereto,
dated the Closing 


 


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Date and
covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;


 


(e)           The
Agent shall have received evidence, satisfactory to it, in the form of pro
forma calculations, that the making of Borrowings and the issuance (or deemed
issuance) of, and Revolving L/C Drawings under, the Revolving Letters of
Credit, under this Agreement are permitted under the terms of the Debt of the
Borrower outstanding on the Closing Date;


 


(f)            The
Agent shall have received executed counterparts of Amendment No. 2 to the
Collateral Trust Agreement reflecting such amendments as the Agent may deem
necessary.


 


(g)           The
Agent shall have received copies of the resolutions of the Board of Directors
(or, in the case of any limited liability companies, Board of Representatives
or the equivalent) of each Loan Party authorizing the execution, delivery and
performance by such Loan Party of the Financing Documents to which it is a
party, certified by a duly authorized officer of such Loan Party (which
certificate shall state that such resolutions are in full force and effect on
the Closing Date);


 


(h)           The
Agent shall have received certified copies of all approvals, authorizations or
consents of, or notices to or registrations with, any governmental body or
agency required for each Loan Party, if necessary, to enter into the Financing
Documents to which it is a party;


 


(i)            The
Agent shall have received a certificate of a duly authorized officer of each
Loan Party certifying the names and true signatures of the officers of such
Loan Party authorized to sign the Financing Documents to which it is a party
and the other documents to be delivered by such Loan Party hereunder;


 


(j)            The
Agent shall have received a certificate signed by a duly authorized officer of
the Borrower dated the Closing Date, to the effect that:  (i) the representations and warranties
contained in Article 4 hereof are true and correct on and as of the
Closing Date as though made on and as of such date; and (ii) no Default
has occurred and is continuing or would result from the issuance of the
Revolving Letters of Credit requested by the Borrower to be issued on such date
and the Borrowings requested by the Borrower to be made on such date
(including, without limitation, the deemed issuance of Revolving Letters of
Credit pursuant to the second sentence of Section 2.03(a));


 


(k)           The
Agent shall have received a certificate signed by a duly authorized officer of
the Borrower to the effect that the execution, delivery and performance by each Loan Party of the Financing Documents to which it is a
party are within such Loan Party’s
corporate or other organizational powers, have been duly authorized by all
necessary corporate or other organizational action, require no action by or in
respect of, or filing with, any governmental body, agency or official (other
than the filing of UCC-1 financing statements and other filings required to
perfect security interests) and do not contravene, or constitute a default
under, any provision of applicable law or regulation or 


 


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of the certificate of incorporation (or certificate of formation, as
applicable) or by-laws (or other organizational documents, as applicable) of
such Loan Party or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
the Borrower or any of its Subsidiaries that could reasonably be
expected to result in a Material Adverse Effect or result in the creation or
imposition of any Lien on any asset of the Borrower or of AES BVI II or of any Material AES Entity or of any Pledged
Subsidiary (except for Liens created by the Financing Documents) provided that any foreclosure or other exercise of remedies by the
Collateral Trustees or the Collateral Agent will require additional approvals
and consents that have not been obtained from foreign and domestic regulators
and from lenders to, and suppliers, customers or other contractual parties of
one or more Subsidiaries and failure to obtain such approval or consent could
result in a default, or a breach of agreement or other legal obligations of
such Subsidiaries; and


 


(l)            The
Agent shall have received all documents it may reasonably request relating to
the existence of the Loan Parties, the corporate or other organizational
authority for and the validity of this Agreement and the other Financing
Documents, and any other matters relevant hereto, all in form and substance
satisfactory to the Agent.


 


Section 3.02  Extension of Credit.


 


The
obligation of each Bank to make a Loan on the occasion of each Borrowing and
the obligation of the Revolving Fronting Banks to issue a Revolving Letter of
Credit on the occasion of each request therefor by the Borrower shall in each
case be subject to the satisfaction of the following conditions:


 


(a)           receipt
by the Agent of a Notice of Borrowing (except in the case of the deemed issuance
of Revolving Letters of Credit pursuant to the second sentence of Section 2.03(a))
or a Notice of Issuance as required by Section 2.02 or 2.03, as the case
may be;


 


(b)           the
fact that, immediately after such Extension of Credit, after giving effect to
all direct and indirect applications of the proceeds of such Extension of
Credit made substantially simultaneously with the extension thereof, the
aggregate Total Outstandings of any Revolving Credit Loan Bank will not exceed
its Revolving Credit Loan Commitment;


 


(c)           the
fact that the making of the Borrowings, the continuation of certain Loans and
the issuance of, and the Revolving L/C Drawings and the Revolving Letters of
Credit under this Agreement are permitted under the terms of the Debt of the
Borrower outstanding as of the date of the making of such Loan or the issuance
of, and the Revolving L/C Drawings under such Revolving Letter of Credit;


 


(d)           the
fact that, immediately before and after such Extension of Credit, no Default
shall have occurred and be continuing; and


 


(e)           the
fact that the representations and warranties of the Obligors contained in the
Financing Documents (except (i) in the case of a Refunding Borrowing, the 


 


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representations
and warranties set forth in Section 4.05(b) and 4.06 as to any matter
which has heretofore been disclosed in writing by the Borrower to the Bank
Parties and (ii) in the case of the representations and warranties set
forth in Section 4.16 which shall be true on and as of the date hereof)
shall be true on and as of the date of such Extension of Credit.


 


Each
Extension of Credit hereunder shall be deemed to be a representation and
warranty by the Borrower on the date of such Extension of Credit as to the
facts specified in clauses (b) through (e) of this Section.


 


ARTICLE
IV



REPRESENTATIONS AND WARRANTIES


 


The Borrower represents and warrants that:


 


Section 4.01  Corporate
Existence and Power.


 


Each
Loan Party is a corporation (or limited liability company, as applicable) duly
incorporated (or formed, as applicable), validly existing and in good standing
under the laws of the jurisdiction of its incorporation (or formation) and has
all corporate or other organizational powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.


 


Section 4.02  Corporate
and Governmental Authorization and Filings; No Contravention.


 


(a)   The execution, delivery and
performance by each Loan Party of
the Financing Documents to
which it is a party are within such Loan
Party’s corporate or other organizational powers, have been duly
authorized by all necessary corporate or other organizational action, require
no action by or in respect of, or filing with, any governmental body, agency or
official (other than the filing of UCC-1 financing statements and other filings
required to perfect security interests) and do not contravene, or constitute a
default under, any provision of applicable law or regulation or of the
certificate of incorporation (or certificate of formation, as applicable) or
by-laws (or other organizational documents, as applicable) of such Loan Party or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the Borrower or any of its Subsidiaries that could reasonably be
expected to result in a Material Adverse Effect or result in the creation or
imposition of any Lien on any asset of the Borrower, AES BVI II or of any Material AES Entity or of any Pledged
Subsidiary (except for Liens created by the Financing Documents).


 


(b)   All filings and other actions
necessary to perfect the security interest granted by each Loan Party in the
Collateral created under the Collateral Documents have been duly made or taken
and are in full force and effect, and (w) the Security Agreement creates
in favor of the Collateral Trustees for the benefit of the Secured Holders a
valid and, together with such filings and other actions, perfected first priority
security interest in the Security Agreement Collateral (subject to no Liens
other than Liens permitted by the Financing Documents), securing the payment of
the Secured Obligations, and (x) the BVI 


 


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Cayman Pledge Agreement creates in favor of
the Collateral Trustees for the benefit of the Secured Holders a valid and,
together with such other actions, perfected first priority security interests
in the BVI Collateral (subject to no Liens other than Liens permitted by the
Financing Documents), securing the payment of the Secured Obligations and (y) the
Collateral Trust Agreement creates in favor of the Collateral Trustees for the
benefit of the Secured Holders, a valid and, together with such filings and
other actions, perfected first priority security interest in the Additional
Collateral Trust Agreement Collateral; provided that any foreclosure or other
exercise of remedies by the Collateral Trustees will require additional
approvals and consents that have not been obtained from foreign and domestic
regulators and from lenders to, and suppliers, customers or other contractual
counterparties of one or more Subsidiaries and failure to obtain such approval
or consent could result in a default, or a breach of agreement or other legal
obligations of such Subsidiaries.  The
Borrower is the legal and beneficial owner of the Security Agreement Collateral
and the Additional Collateral Trust Agreement Collateral and AES BVI II is the
legal and beneficial owner of the BVI Collateral, in each case free and clear
of any Lien, except for Liens permitted by the Financing Documents.


 


Section 4.03  Compliance
with Laws.


 


The
Borrower is and each of its Subsidiaries are in compliance with all applicable
laws, ordinances, rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental Laws and ERISA and
the rules and regulations thereunder) except for any non-compliance that
could not reasonably be expected to have a Material Adverse Effect.


 


Section 4.04  Binding
Effect.


 


This
Agreement constitutes a valid and binding agreement of each Obligor and each
other Financing Document, when
executed and delivered in accordance with this Agreement, will constitute a
valid and binding obligation of each Loan
Party that is a party thereto, in each case enforceable in accordance
with its terms.


 


Section 4.05  Financial
Information.


 


(a)   The most recent consolidated
balance sheet of the Borrower and its Consolidated
Subsidiaries and the related consolidated statements of operations and
cash flows, in each case reported on by Ernst & Young or other
independent public accountants of nationally recognized standing and set forth
in the Annual Report on Form 10-K most recently filed by the Borrower with
the Securities and Exchange Commission, fairly present, in conformity with
generally accepted accounting principles, the consolidated financial position
of the Borrower and its Consolidated
Subsidiaries as of such date and their consolidated results of
operations and cash flows for such fiscal year.


 


(b)   Except for Disclosed Matters,
since December 31, 2003 there has been no material adverse change in the
business, financial position, results of operations or prospects of the
Borrower and its Consolidated
Subsidiaries, considered as a whole.


 


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Section 4.06  Litigation.


 


Except
for Disclosed Matters, there is no action, suit, investigation, litigation or
proceeding pending against, or to the knowledge of the Borrower threatened
against or affecting, the Borrower or any of its Subsidiaries before any court or arbitrator or any governmental
body, agency or official in which there is a reasonable possibility of an
adverse decision which could have a Material Adverse Effect or which in any
manner draws into question the legality, validity or enforceability of any Financing Document, and there shall have
been no change in the status of, or in the financial effect on the Borrower or
its Subsidiaries from the actions, suits, investigations, litigations or
proceedings set forth in the Disclosed Matters that could reasonably be
expected to have a Material Adverse Effect.


 


Section 4.07  Compliance
with ERISA.


 


Each
member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the currently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan.  No member of the ERISA Group has (a) sought a waiver of the minimum funding
standard under Section 412 of the Internal Revenue Code in respect of any
Plan; (b) failed to make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which has resulted or could
result in the imposition of a Lien or the posting of a bond or other security
under ERISA or the Internal Revenue Code or (c) incurred any liability in
excess of $100,000 under Title IV of ERISA other than a liability to the PBGC
for premiums under Section 4007 of ERISA.


 


Section 4.08  Environmental
Matters.


 


(a)   In the ordinary course of its
business, each of the Borrower and its Subsidiaries
conducts an ongoing review of the effect of Environmental Laws on the business,
operations and properties of the Borrower or such Subsidiary, in the course of which it identifies and evaluates
associated liabilities and costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure of properties presently
or previously owned, any capital or operating expenditures required for
investigation, to achieve or maintain compliance with environmental protection
standards imposed by Environmental Laws or as a condition of any license,
permit or contract, any related constraints on operating activities, including
any periodic or permanent shutdown of any facility or reduction in the level of
or change in the nature of operations conducted thereat, any costs or
liabilities in connection with off-site disposal of wastes or Hazardous
Substances by the Borrower or its Subsidiaries,
and any actual or potential liabilities to third parties, including employees,
and any related costs and expenses).  On
the basis of this review, the Borrower has reasonably concluded that such
associated liabilities and costs, including the costs of compliance with
Environmental Laws, are unlikely to have a Material Adverse Effect.


 


(b)   There are no facts,
circumstances or conditions that are reasonably likely to result in liabilities
arising under Environmental Laws that could have a material adverse 


 


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effect on the business, financial conditions,
results of operations or prospects of the Borrower and its Consolidated Subsidiaries, considered
as a whole.


 


Section 4.09  Taxes.


 


United
States Federal income tax returns of the Borrower and its Subsidiaries and any
other material tax returns filed by them have been examined and closed (other
than for the limited purposes of net operating loss carry-forwards) through the
fiscal year ended December 31, 1999 there are no ongoing or pending tax
audits or examinations, and no deficiencies or other claims for unpaid taxes
are proposed in respect of any taxes due from the Borrower, its Subsidiaries or
any Material AES Entity that could have a Material Adverse Effect.  The Borrower, its Subsidiaries and all
Material AES Entities have filed all United States Federal income tax returns
and the Borrower, its Subsidiaries and all Material AES Entities have filed all
other material tax returns which are required to be filed by them, all such
United States Federal income tax returns and all such other material returns
are true, correct and complete in all material respects and all taxes due as
indicated on such returns or pursuant to any assessment received by the
Borrower or any Subsidiary or any Material AES Entity have been paid, other
than any such taxes that are being diligently contested in good faith through
appropriate proceedings and for which adequate reserves have been established
in accordance with generally accepted accounting principals.  The charges, accruals and reserves on the
books of the Borrower, its Subsidiaries and all Material AES Entities in
respect of taxes or other governmental charges are, in the opinion of the
Borrower, adequate.


 


Section 4.10  Material
AES Entities.


 


Each Material AES Entity is a corporation
(or limited liability company, as applicable) duly incorporated (or formed, as
applicable), validly existing and (other than any Material AES Entity that is not incorporated under the laws of
the United States or any political subdivision thereof) in good standing under
the laws of its jurisdiction of incorporation (or jurisdiction of formation, as
applicable).  Each Material AES Entity has all corporate
or other organizational powers and all material governmental licenses,
authorization, consents and approvals required to carry on its business as
proposed to be conducted and has all governmental licenses, authorizations,
consents and approvals required to have been obtained prior to the date hereof
and which are material to the operation of its business as proposed to be
conducted, except to the extent that the failure to obtain any such license,
authorization, consent or approval, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.


 


Section 4.11  Not
an Investment Company.


 


None
of the Obligors is an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.


 


Section 4.12  Public
Utility Holding Company Act.


 


Neither
the Borrower nor any of its Subsidiaries
is subject to regulation as a “holding company” or a “subsidiary company”
of a holding company or an “affiliate” of a subsidiary or holding company or a “public
utility company” under Section 2(a) of the Public 


 


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Utility Holding Company Act of 1935, as amended (“PUHCA”), except that the Borrower and
certain of its Subsidiaries are exempt holding companies under Section 3(a) of
PUHCA by order of the Securities and Exchange Commission.


 


Section 4.13  Full
Disclosure.


 


All
information heretofore furnished by the Borrower to the Agent or any Bank Party
for purposes of or in connection with any Financing Document or any transaction
contemplated hereby or thereby is, and all such information hereafter furnished
by the Borrower to the Agent or any Bank Party will be, true and accurate in
all material respects on the date as of which such information is stated or
certified in the light of the circumstances under which such information was
provided (as modified or supplemented by other information so furnished, when
taken together as a whole and with the Disclosed Matters); provided
that, with respect to projected financial information, the Borrower represents
only that such information was prepared in good faith based on assumptions
believed to be reasonable at the time, it being recognized by the Bank Parties
that such projections as to future events are not to be viewed as facts and
that actual results during the period or periods covered by any such
projections may differ from the projected results.  The Borrower has disclosed to the Bank
Parties, in the Disclosed Matters or otherwise in writing, any and all facts
specific to the Borrower and its Subsidiaries and known as of the date hereof
to a responsible officer of the Borrower that could reasonably be expected to
result in a Material Adverse Effect, which materially and adversely affect or
may affect (to the extent the Borrower can now reasonably foresee), the
business, operations or financial condition of the Borrower and its Consolidated Subsidiaries, taken as a
whole, or the ability of any Obligor to
perform its obligations under the Financing
Documents.


 


Section 4.14  Collateral Documents and Collateral.


 


(a)   (i) The execution,
delivery, recordation, filing or performance by the Borrower and AES BVI II of
the Collateral Documents; (ii) the grant by the Borrower and AES BVI II of
the Liens granted by each of them pursuant to the Collateral Documents; (iii) the
perfection or maintenance of the Liens created under the Collateral Documents
(including the first priority nature thereof) and (iv) the exercise by the
Collateral Trustees of its remedies in respect of the Collateral pursuant to
the Collateral Documents, does not require any consent, approval, authorization
or other order of, or any notice to or filing with, any court, regulatory body,
administrative agency or other governmental body (other than such filings
required in order to perfect any security interest granted by the Collateral
Documents and other than any consent, approval, authorization, order, notice or
filing the failure of which to make or obtain could not reasonably be expected
to have a Material Adverse Effect), and does not conflict with or constitute a
breach of any of the terms or provisions of, or a default under, the charter or
by-laws of the Borrower, AES BVI II, or any of the other Pledged Subsidiaries
or any agreement, indenture or other instrument to which the Borrower, AES BVI
II or any of the other Pledged Subsidiaries is a party or by which the
Borrower, AES BVI II or any of the other Pledged Subsidiaries or the Borrower’s,
AES BVI II’s or the other Pledged Subsidiaries’ respective property is bound,
or violate or conflict with any laws, administrative regulations or rulings or
court decrees applicable to the Borrower, AES BVI II, any of the other Pledged
Subsidiaries or the Borrower’s, AES BVI II’s or the other Pledged Subsidiaries’
respective property except for any violation, breach,


 


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conflict or default that could not reasonably
be expected to have a Material Adverse Effect and except that in each of the
foregoing cases any foreclosure or other exercise of remedies by the Collateral
Trustees will require additional approvals and consents that have not been
obtained from foreign and domestic regulators and from lenders to, and
suppliers, customers or other contractual counterparties of, one or more
Subsidiaries and failure to obtain such approval or consent could result in a
default under, or a breach of, agreements or other legal obligations of such
Subsidiaries.


 


(b)   Each of the representations and
warranties of the Borrower and AES BVI II contained in the Collateral
Documents is true and correct.


 


(c)   Set forth on Schedule I hereto
is a complete and accurate list of all Pledged Subsidiaries as of the end of
the most recently ended quarter for which financial statements have been
delivered pursuant to Section 5.01(a) or (b) showing as of such
date (as to each such Pledged Subsidiary) its legal name, its jurisdiction of
incorporation, the type and number of shares of each class of its Equity
Interests authorized, and the type and number outstanding, on such date and the
percentage of each such class of its Equity Interests owned (directly or
indirectly) by the Borrower and
the certificate number corresponding to each such Equity Interest.  All of the outstanding Equity Interests
pledged to the Collateral Trustees for the benefit of the Secured Holders
pursuant to the Security Agreement and the BVI Cayman Pledge Agreement in each
Pledged Subsidiary have been validly issued, are fully paid and non-assessable
and are owned by the Borrower
or AES BVI II, as applicable, free and clear of all Liens, except those created
under the Financing Documents.


 


(d)   Set forth on Schedule II hereto
is a complete and accurate list of all assigned agreements of the Borrower and its Subsidiaries
(the “Assigned
Agreements”),
showing as of the Effective Date the parties, subject matter and term
thereof.  Each such Assigned Agreement
has been duly authorized, executed and delivered by all parties thereto, has
not been amended or otherwise modified (except as otherwise permitted pursuant
to the Security Agreement), is in full force and effect (except as otherwise permitted
pursuant to the Security Agreement) and is valid and binding upon and
enforceable against all parties thereto, except as the enforceability thereof
may be limited by bankruptcy, insolvency or similar laws affecting creditors’
rights generally and by equitable principles of general applicability and, as
of the Closing Date, there exists no default under any Assigned Agreement by
any party thereto.


 


Section 4.15  Existing Letters of Credit.


 


Appendix
III hereto identifies each Existing Letter of Credit outstanding as of the
Effective Date.


 


Section 4.16  Solvency.


 


Each
of AES BVI II, AES New York, AES Oklahoma, AES Hawaii and AES Warrior Run is,
individually, and together with its Subsidiaries, taken as a whole, Solvent as
of the date hereof.


 


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Section 4.17  Pledged Subsidiaries.


 


Other than the Non-Pledged Subsidiaries, the Pledged Subsidiaries
listed on Schedule I hereto most recently delivered to the Bank Parties in
accordance with Section 5.01(l), are, as of the date set forth on such
Schedule, all of the direct Subsidiaries of the Borrower and all of the direct
Subsidiaries of AES BVI II.


 


Section 4.18  Qualified Holding Companies Debt.


 


None of the Qualified Holding Companies is an obligor or a contingent
obligor on any of the Debt permitted by Section 5.07(b)(iii) or a
contingent obligor on any of the Debt permitted by Section 5.07(a)(ii),
other than Debt permitted by the definition of “Qualified Holding Company”.


 


ARTICLE
V



COVENANTS


 


The
Borrower agrees that, so long as any Loan or any other Obligation of any Loan
Party under any Financing Document shall remain unpaid or any Revolving Credit
Loan Bank has any Revolving Credit Loan Commitment hereunder or any amount
payable under any Note remains unpaid or any Revolving Letter of Credit or any
Reimbursement Obligation remains outstanding:


 


Section 5.01  Information.


 


The Borrower will deliver to each of the Bank Parties (it being
understood that, (x) with respect to clause (c) below, such
information shall only be delivered to the Bank Parties that on or prior to the
date of delivery have previously requested such information and (y) delivery
to the Agent and the posting by the Agent of each of the following items on an
electronic website, in accordance with Section 7.11, shall constitute
delivery to each of the Bank Parties, and the Agent hereby agrees to post on an
electronic website or otherwise distribute to the Bank Parties (subject to
clause (x) above) any such item delivered by the Borrower to the Agent):


 


(a)           as
soon as available and in any event (i) within 120 days after the end of
each fiscal year of the Borrower, a consolidated balance sheet of the Borrower
as of the end of such fiscal year, an unconsolidated balance sheet of the
Borrower as of the end of such fiscal year, the related consolidated and
unconsolidated (as applicable) statements of operations for such fiscal year
and the related consolidated and unconsolidated statements of cash flows for
such fiscal year, and a statement of cash flow distributions to the Borrower by
project for such fiscal year, setting forth in each case in comparative form
the figures for the previous fiscal year and (ii) within 180 days after
the end of the fiscal year of the Borrower, a consolidated balance sheet of
each Subsidiary Guarantor as of the end of such fiscal year and the related
consolidated statements of operations for such fiscal year and the related
consolidated statements of cash flows for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal year and said
consolidated financial statements, in each case with respect to clauses (i) and
(ii), to 


 


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be reported
on, in a manner acceptable to the Securities and Exchange Commission, by Ernst &
Young or other independent public accountants of nationally recognized standing
and such unconsolidated financial statements to be certified as to fairness of
presentation, generally accepted accounting principles (other than failure to
consolidate) and consistency by the chief executive officer, president, chief
financial officer or chief accounting officer of the Borrower;


 


(b)           as
soon as available and in any event (i) within 60 days after the end of
each of the first three quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower as of the end of such quarter and an
unconsolidated balance sheet of the Borrower as of the end of such fiscal
quarter and the related consolidated and unconsolidated statements of
operations for such quarter and for the portion of the Borrower’s fiscal year
ended at the end of such quarter and the related consolidated and
unconsolidated (as applicable) statements of cash flows for the portion of the
Borrower’s fiscal year ended at the end of such quarter, and a statement of
cash flow distributions to the Borrower by project for such fiscal quarter and
for the period of the Borrower’s fiscal year ended at the end of such quarter,
setting forth in the case of such consolidated statements of operations and
cash flows, in comparative form the figures for the corresponding quarter and
the corresponding portion of the Borrower’s previous fiscal year and (ii) within
90 days after the end of each of the first three quarters of each fiscal year
of the Borrower, a consolidated balance sheet of each Subsidiary Guarantor  as of the end of such quarter and the related
consolidated statements of operations for such quarter and for the portion of
such Subsidiary Guarantor’s fiscal year ended at the end of such quarter and
the related consolidated statements of cash flows for the portion of each
Subsidiary Guarantor’s fiscal year ended at the end of such quarter, setting
forth in the case of such consolidated statements of operations and cash flows,
in comparative form the figures for the corresponding quarter and the
corresponding portion of each Subsidiary Guarantor’s previous fiscal year, all
certified (subject to normal year-end adjustments) as to fairness of
presentation, generally accepted accounting principles and consistency by the
chief executive officer, president, chief financial officer or chief accounting
officer of the Borrower;


 


(c)           upon
request by any such Bank Party made at least 30 days prior to the date that the
relevant financial statements are required to be delivered pursuant to clause (a) or
(b) above (it being understood that upon the first such request,
subsequent requests shall automatically be deemed to have been made for as long
as such requesting Bank Party continues to be a Bank Party hereunder), (1) as
soon as available and in any event no later than the date on which financial
statements are required to be delivered pursuant to clause (a) above,
forecasts prepared by management of the Borrower, in form satisfactory to the
Agent, of cash flow statements on a monthly basis for the fiscal year following
such fiscal year and on an annual basis for each fiscal year thereafter until
the Termination Date and (2) as soon as available and in any event no
later than the date financial statements are required to be delivered pursuant
to clause (a) and (b) above, a statement of the monthly cash flows to
the Borrower of each Subsidiary of the Borrower for each of the twelve months
ending prior to the date of such financial statements;


 


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(d)           simultaneously
with the delivery of each set of financial statements referred to in clauses (a) and
(b) above, a certificate of the chief executive officer, president, chief
financial officer or chief accounting officer of the Borrower (i) setting
forth in reasonable detail the calculations required to establish whether the
Borrower was in compliance with the requirements of Sections 5.07, 5.09,
5.10(p), 5.11, 5.13, 5.14 and 5.16 on the date of such financial statements; (ii) stating
to the knowledge of the Borrower whether any Default exists on the date of such
certificate and, if any Default then exists, setting forth the details thereof
and the action which the Borrower is taking or proposes to take with respect
thereto and (iii) accompanied by a schedule setting forth in reasonable
detail a description, including, where applicable, the expected and maximum
dollar amounts thereof, of all material contingent liabilities not disclosed in
such financial statements;


 


(e)           simultaneously
with the delivery of each set of financial statements referred to in clause (a) above,
a statement of the firm of independent public accountants which reported on
such statements whether anything has come to their attention as a result of
their audit (which was not directed primarily toward obtaining knowledge of
noncompliance) to cause them to believe that the Borrower has failed to comply
with the terms, covenants, provisions or conditions as they relate to
accounting of financial matters addressed in Sections 5.07 to 5.17, inclusive;


 


(f)            within
five days after any officer of the Borrower obtains knowledge of any Default,
if such Default is then continuing, a certificate of the chief executive
officer, president, executive vice-president or chief financial officer of the
Borrower setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;


 


(g)           promptly
upon the mailing thereof to the shareholders of the Borrower generally, copies
of all financial statements, reports and proxy statements so mailed;


 


(h)           promptly
upon the filing thereof, copies of all registration statements (other than the
exhibits thereto and any registration statements on Form S-8 or its
equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their equivalents)
which the Borrower shall have filed with the Securities and Exchange
Commission;


 


(i)            if
and when any member of the ERISA Group (i) gives or is required to give
notice to the PBGC of any “reportable event” (as defined in Section 4043
of ERISA) with respect to any Plan which might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or
partial withdrawal liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been terminated, a
copy of such notice; (iii) receives notice from the PBGC under Title IV of
ERISA of an intent to terminate, impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice; (iv) applies for a waiver of
the minimum funding standard under Section 412 of the Internal Revenue 


 


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Code, a copy
of such application; (v) gives notice of intent to terminate any Plan
under Section 4041(c) of ERISA, a copy of such notice and other
information filed with the PBGC; (vi) gives notice of withdrawal from any
Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails
to make any payment or contribution to any Plan or Multiemployer Plan or in
respect of any Benefit Arrangement or makes any amendment to any Plan or
Benefit Arrangement which has resulted or could result in the imposition of a
Lien or the posting of a bond or other security, a certificate of the chief
executive officer, president, chief financial officer or chief accounting
officer of the Borrower setting forth details as to such occurrence and the
action, if any, which the Borrower or the applicable member of the ERISA Group
is required or proposes to take;


 


(j)            by
12:00 Noon (New York City time) on the third Business Day after receipt by the
Borrower or any Subsidiary of the Borrower of Net Cash Proceeds from any Asset
Sale, any issuance of Bridge Debt or any issuance of Debt by any Subsidiary of
the Borrower permitted pursuant to Section 5.07(b)(ii) (but only to
the extent applicable pursuant to the proviso thereof) and Section 5.07(b)(vi) (but
only to the extent the Debt was incurred by IPALCO or a Subsidiary Guarantor),
a certificate of the chief executive officer, president, chief financial
officer or chief accounting officer of the Borrower setting forth (i) a
description of the transaction giving rise to such Net Cash Proceeds, (ii) the
amount of Net Cash Proceeds anticipated to be received on such date or each of
such dates (together with a schedule detailing the calculations necessary to
determine the amount of Net Cash Proceeds), (iii) the amount of such Net
Cash Proceeds that is anticipated to prepay the Term Loans and (iv) in the
case of the receipt by a Subsidiary of any such Net Cash Proceeds, in the event
that such Subsidiary is unable to transfer such Net Cash Proceeds to the
Borrower or a Qualified Holding Company whose Equity Interests have been
pledged to the Secured Holders pursuant to the Collateral Documents, such
certificate shall also set forth a reasonably detailed explanation of the
circumstances preventing such Subsidiary from transferring such Net Cash
Proceeds to the Borrower or a Qualified Holding Company whose Equity Interests
have been pledged to the Secured Holders pursuant to the Collateral Documents;


 


(k)           promptly
after receipt by the Borrower or any Subsidiary of the Borrower, a copy of:
each complaint, order, citation, initial notice or other material written
communication from any Person with respect to the existence or alleged
existence of a material violation of any applicable Environmental Law or the
incurrence of any material liability, obligation, loss, damage, cost, expense,
fine, penalty or sanction or the requirement to commence any material remedial
action resulting from or in connection with any material air emission, water
discharge, noise emission, Hazardous Substance or any other material
environmental, health or safety matter at, upon, under or within any of the
properties now or previously owned, leased or operated by the Borrower, any of
its Subsidiaries or any Material AES Entity, or due to the operations or
activities of the Borrower, any Subsidiary of the Borrower, any Material AES
Entity or any other Person on or in connection with any such property or any
part thereof;


 


(l)            simultaneously
with the delivery of each set of financial statements referred to in clause (a) and
(b) above, (1) a revised Schedule I showing as of the last day of
such quarter all of the direct Subsidiaries of the Borrower and AES BVI II
(other than 


 


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Non-Pledged
Subsidiaries) and (2) a revised Schedule IV showing as of the last day of
such quarter all the Subsidiaries of the Borrower whose assets consist only of
any of the Excluded AES Business and direct or indirect Investments therein;


 


(m)          promptly
upon request thereof, deliver to the Agent and the Collateral Trustees (A) a
list setting forth, for each Secured Agreement, (i) the aggregate
principal amount outstanding thereunder, (ii) the accrued and unpaid
interest thereunder, (iii) the accrued and unpaid fees (if any)
thereunder, (iv) the names of the Representatives (as defined in the
Collateral Trust Agreement) and of the Secured Holders (to the extent known to
the Borrower) thereunder, and all other unpaid amounts thereunder known to the
Borrower, owing to each such Representative, for its own account and on behalf of
such Secured Holders and (v) such other information regarding the
Representatives, such Secured Holders and the Secured Agreements as the Agent
may reasonably request and (B) the Payment Information (as defined in the
Collateral Trust Agreement); and


 


(n)           from
time to time such additional information regarding the financial position or
business of the Borrower and its Subsidiaries as the Agent, at the request of
any Bank Party, may reasonably request.


 


Section 5.02  Payment of Obligations.


 


The Borrower will pay and discharge all its material obligations and
liabilities and will cause each Subsidiary Guarantor (other than AES Warrior
Run) and IPALCO (in each case, for so long as each Person is a Subsidiary of
the Borrower) to pay and discharge all its Material Obligations, in each case,
including, without limitation, tax liabilities, except where the same may be
contested in good faith by appropriate proceedings, and will maintain, and will
cause each Subsidiary of the Borrower to maintain, in accordance with generally
accepted accounting principles, appropriate reserves for the accrual of any of
the same.


 


Section 5.03  Maintenance of Property; Insurance.


 


(a)   The Borrower will keep, and will
cause each of its Subsidiaries to keep, all property useful and necessary in
its business in good working order and condition, ordinary wear and tear
excepted.


 


(b)   The Borrower will, and will
cause each of its Subsidiaries to, maintain (either in the name of the Borrower
or in such Subsidiary’s own name) with financially sound and responsible
insurance companies, insurance of such types, in at least such amounts and
against at least such risks (and with such risk retention) as are usually
insured against in similar circumstances in the same general area by companies of
established repute engaged in the same or a similar business; and will furnish
to each Bank Party upon request information presented in reasonable detail as
to the insurance so carried.


 


Section 5.04  Conduct of Business and Maintenance of
Existence.


 


The Borrower (a) will continue, and will cause each of AES BVI II,
the Material AES Entities and the Pledged Subsidiaries to continue, to engage
in a Permitted Business; (b) will continue, and will cause AES BVI II,
each Material AES Entity and each Pledged 


 


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Subsidiary to continue, to operate their respective
businesses on a basis substantially consistent with the policies and standards
of the Borrower, AES BVI II or such Material AES Entity or such Pledged
Subsidiary as in effect on the date hereof and (c) will preserve, renew
and keep in full force and effect, and will cause AES BVI II, each Material AES
Entity and each Pledged Subsidiary to preserve, renew and keep in full force
and effect their respective corporate existence and their respective rights,
privileges and franchises necessary or desirable in the normal conduct of
business; provided that nothing
in this Section 5.04 shall prohibit (i) the merger of a Subsidiary
into the Borrower or the merger or consolidation of a Subsidiary with or into
another Person if the Person surviving such consolidation or merger is a
Subsidiary and if, in each case, after giving effect thereto (x) no
Default shall have occurred and be continuing, (y) neither the Borrower or
any Subsidiary Guarantor shall be liable for any Debt of such Subsidiary except
to the extent it was liable for such Debt prior to giving effect to such merger
and (z) the transaction is otherwise permitted by Section 5.11, (ii) any
asset disposition by the Borrower or any of its Subsidiaries permitted by Section 5.18
and (iii) the termination of the corporate existence of any Subsidiary
(other than a Subsidiary Guarantor) if the Borrower in good faith determines
that such termination is in the best interest of the Borrower and is not
materially disadvantageous to the Bank Parties.


 


Section 5.05  Compliance with Laws.


 


The Borrower will comply, and cause each of its Subsidiaries to comply,
in all material respects with all applicable laws, ordinances, rules,
regulations, and requirements of governmental authorities (including, without
limitation, Environmental Laws and ERISA and the rules and regulations
thereunder) (a) except for such non-compliance as would result solely in
the payment of monetary compensation by the Borrower or such Subsidiary in an
amount not to exceed $15,000,000 in the aggregate and (b) except where the
necessity of compliance therewith is contested in good faith by appropriate
proceedings (and the pendency of such proceedings themselves shall not have a
material adverse effect on the Borrower and its Subsidiaries, taken as a
whole).


 


Section 5.06  Inspection of Property, Books and Records.


 


The Borrower will keep, and will cause each of its Subsidiaries to
keep, proper books of record and account in which full, true and correct
entries shall be made of all dealings and transactions in relation to its
business and activities; and will permit, and will cause each Significant AES
Entity to permit, representatives of any Bank Party at such Bank Party’s
expense to visit and inspect any of their respective properties, to examine and
make abstracts from any of their respective books and records and to discuss
their respective affairs, finances and accounts with their respective officers,
employees and independent public accountants, all at such reasonable times and
as often as may reasonably be desired.


 


Section 5.07  Limitation on Debt.


 


The Borrower shall not, and shall not permit any Subsidiary of the
Borrower to, incur, assume, create or suffer to exist any Debt, except for:


 


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(a)   in the case of the Borrower:


 


(i)            Debt under the Financing Documents;


 


(ii)           Debt existing on the Effective Date and set
forth on Schedule VI;


 


(iii)          Debt representing a refinancing, replacement
or refunding of Debt permitted by Section 5.07(a)(i), (ii), (iii), (vii) and
(ix); provided that:


 


(A)          (x) the aggregate principal amount of
such Debt outstanding or available will not exceed the principal amount
outstanding or available at the time of such refinancing, replacement or
refunding (plus fees and expenses, including any premium and defeasance costs
relating to such refinancing, replacement or refunding), (y) the final
maturity of such Debt is later than the Initial Term Loan Termination Date (other than Debt that can be settled in the
Borrower’s Capital Stock (other than Redeemable Stock); provided that such Debt may only be settled in cash
prior to the Initial Term Loan Termination Date up to an aggregate principal
amount not to exceed $400,000,000 and not before July 29, 2006; provided further that the Debt being refinanced, replaced or
refunded has a final maturity date on or prior to the Initial Term Loan Termination Date) (z) (1) such
Debt shall not contain any Payment Restriction more restrictive than the
Payment Restrictions contained in the Debt being refinanced, replaced or
refunded or (2) in the opinion of the Borrower, such Payment Restrictions
are consistent with customary market terms for a financing of its nature and do
not adversely affect the ability of the Borrower to meet its payment
Obligations under the Financing Documents; and


 


(B)           no obligor shall be liable for any such Debt
except to the extent that it was liable for the Debt so refinanced, replaced or
refunded, unless such liability in respect of such Debt would otherwise be
permitted by Section 5.07(b);


 


(iv)          Debt owing by the Borrower to a Consolidated
Subsidiary of the Borrower so long as such Debt is subordinated on terms
reasonably satisfactory to the Agent to the Debt of the Borrower under the
Financing Documents;


 


(v)           any Lien permitted by Section 5.10 that
constitutes Debt not otherwise permitted by this Section;


 


(vi)          Letters of credit, surety bonds, Guarantees
and performance bonds supporting obligations of Subsidiaries so long as, after
giving effect to such letters of credit, surety bonds, Guarantees and
performance bonds (and the Investments represented thereby), the Borrower would
be in compliance with Section 5.16;


 


(vii)         other Debt so long as (x) immediately
before and after giving effect to the incurrence and application of the
proceeds thereof no Default shall have occurred and be continuing, (y) if
such Debt is secured by a Lien on the 


 


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Creditor Group Collateral on a first-lien basis, the final scheduled
maturity of such Debt shall in no event be on or prior to the Initial Term Loan
Termination Date and (z) if such Debt is secured by a Lien on the Creditor
Group Collateral on a first-lien basis, such Debt shall not have any scheduled
amortization on or prior to the Initial Term Loan Termination Date in an
aggregate amount in excess of 10% of the initial amount of such Debt;


 


(viii)        Debt incurred as a bridge financing for a
proposed sale, transfer or other disposition of assets pursuant to Section 5.18(iv) with
respect to assets acquired after June 23, 2005; provided that (w) the only direct or contingent obligor
in respect of such Debt is the holder of the assets that are the subject of
such sale, transfer or other disposition, (x) the interest rate applicable
to such Debt does not exceed the then applicable market interest rate, (y) such
Debt is repaid with the proceeds of such sale, transfer or other disposition
upon consummation thereof and (z) such Debt was incurred in connection
with the acquisition by the Borrower of the assets that are the subject of such
sale, transfer or other disposition;


 


(ix)           Debt incurred to refinance, replace or
refund any of the obligations arising in respect of the Existing Trust
Preferred Securities, provided
that (x) the only direct or contingent obligor in respect of such Debt is
the Borrower and (y) the final scheduled maturity of such Debt shall be
later than the Initial Term Loan Termination Date; and


 


(x)            Debt in an aggregate principal amount not
to exceed $500,000,000 at any one time outstanding, so long as immediately
before and after giving effect to the incurrence and application of the
proceeds thereof no Default shall have occurred and be continuing; and


 


(b)   in the case of the Borrower’s Subsidiaries:


 


(i)            Guarantees of Debt of the Borrower under
the Financing Documents, the Senior Secured Exchange Notes and Debt permitted
by clause (a)(iii) or (a)(vii) above, the proceeds of which are
applied to permanently reduce Total Bank Exposure or prepay the Senior Secured
Exchange Notes (it being understood that if, after the Effective Date, any
Subsidiary Guarantees the Debt of the Borrower under the Financing Documents,
such Subsidiary may also Guarantee the Senior Secured Exchange Notes and the
Debt permitted by clause (a)(iii) or (a)(vii) above, the
proceeds of which are applied to permanently reduce Total Bank Exposure or
prepay the Senior Secured Exchange Notes);


 


(ii)           Debt incurred by a
Subsidiary:


 


                (x)            (1) to finance the acquisition,
development, construction, operation, maintenance (including modifications and
upgrades to comply with applicable laws and regulations) or working capital
requirements (including letters of credit or guarantees to fund debt service
reserve 


 


AES Fourth Amended and
Restated Credit Agreement


 


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accounts or similar
accounts or for the benefit of power purchase agreements or commodity hedging
counterparties) of a Power Supply Business or other business owned, operated or
managed (including on a joint basis with others), directly or indirectly, by
the Borrower (an “AES Business”)
or (2) to finance the acquisition of “greenfields” and the construction,
operation, maintenance or working capital requirements (including modifications
and upgrades to comply with applicable laws and regulations) or working capital
requirements (including letters of credit or guarantees to fund debt service
reserve accounts or similar accounts or for the benefit of power purchase
agreements or commodity hedging counterparties) necessary to develop and
construct such “greenfields” and to operate them as an AES Business or (3) that
constitutes Acquired Debt; and


 


                (y)           that is not also the Debt of any other
Subsidiary with an interest in any other AES Business (except for (1) Debt
incurred or assumed by Intermediate Holding Companies which, at the time such
Debt was incurred or assumed, in the aggregate, contributed less than 50% of
the Parent Operating Cash Flow for the immediately preceding four fiscal
quarters, (2) Debt incurred or assumed by Subsidiaries of the Borrower
(other than Intermediate Holding Companies), which, at the time such Debt was
incurred or assumed, in the aggregate, contributed less than 15% of the Parent
Operating Cash Flow for the immediately preceding four fiscal quarters and are
projected by the Borrower at the time such Debt is incurred or assumed to
contribute less than 15% of the Parent Operating Cash Flow for the immediately
succeeding four fiscal quarters and (3) in the case of any Cameroon
Business or any Subsidiary of the Borrower (other than any Subsidiary
Guarantor) that has a direct or indirect interest in any Cameroon Business,
Debt of any other Cameroon Business or any Subsidiary of the Borrower (other
than any Subsidiary Guarantor) that has a direct or indirect interest in any
Cameroon Business); provided that
Excluded AES Entities can guarantee, or be co-obligors with respect to, Debt of
other Excluded AES Entities;


 


provided, however,
that to the extent that the Debt incurred pursuant to this Section 5.07(b)(ii) is
not used for the purposes set forth in clauses (x)(1), (x)(2) or (x)(3) above,
unless such Debt is permitted by another provision hereunder, the portion of
Net Cash Proceeds of such Debt not used for such purposes shall be received by
the Borrower or a Qualified Holding Company whose Equity Interests have been
pledged to the Secured Holders pursuant to the Collateral Documents and such
Net Cash Proceeds shall be applied to prepay the Debt hereunder pursuant to and
in the amounts and order of priority set forth in Section 2.10(b);


 


(iii)          Debt existing on the Effective Date;


 


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Restated Credit Agreement


 


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(iv)          Debt incurred by a Subsidiary as a bridge
financing for a proposed sale, transfer or other disposition of assets pursuant
to Section 5.18(iv); provided
that (w) the only direct or contingent obligor in respect of such Debt is
the holder of the assets that are the subject of such sale, transfer or other
disposition, (x) the interest rate applicable to such Debt does not exceed
the then applicable market interest rate, (y) such Debt is repaid with the
proceeds of such sale, transfer or other disposition upon consummation thereof
and (z) in the case of a bridge financing for a proposed Asset
Sale, the Net Cash Proceeds from the incurrence of such Debt shall be applied
as set forth in Section 2.10(b);


 


(v)           Debt owing to the Borrower or a Consolidated
Subsidiary of the Borrower; provided that
Debt owed to the Borrower shall constitute Pledged Debt (to the extent such
Debtor is required to pledge such Debt pursuant to the Collateral Documents)
and delivered to the Collateral Trustees pursuant to the terms of the Security
Agreement; provided  further that any such Debt is permitted
under Section 5.16;


 


(vi)          Debt incurred by a Subsidiary, the Net Cash
Proceeds of which are received by the Borrower or a Qualified Holding Company
whose Equity Interests have been pledged to the Secured Holders pursuant to the
Collateral Documents and, in the case of Debt incurred by IPALCO or any
Subsidiary Guarantor, an amount equal to the Banks’ Ratable Share of 100% of
such Net Cash Proceeds (other than $200,000,000 of additional Debt of IPALCO
and the Subsidiary Guarantors incurred after the Effective Date), shall be
applied to prepay the Debt hereunder pursuant to and in the amount and order of
priority set forth in Section 2.10(b);


 


(vii)         Debt representing a
refinancing, replacement or refunding of Debt permitted by clauses (b)(ii),
(b)(iii), (b)(iv), (b)(vi) and (b)(vii); provided
that:


 


(A)          (x) the aggregate principal amount of
such Debt outstanding or available will not exceed the principal amount
outstanding or available at the time of such refinancing, replacement or
refunding (plus fees and expenses, including any premium and defeasance costs)
relating to such refinancing, replacement or refunding and (y) the Payment
Restrictions in such Debt (1) shall be no more restrictive than the
Payment Restrictions contained in the Debt being refinanced, replaced or
refunded or (2) in the opinion of the Borrower, are consistent with
customary market terms for a financing of its nature and do not adversely
affect the ability of the Borrower to meet its payment Obligations under the
Financing Documents;


 


(B)           after giving effect to the issuance of such
Debt, no Default shall have occurred and be continuing under Section 5.16(b);
and


 


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Restated Credit Agreement


 


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(C)           if any Debt being refinanced, replaced or
refunded is subordinated to the Debt of any Subsidiary Guarantor, such Debt
shall be subordinated at least to the same extent;


 


(viii)        any Lien permitted by Section 5.10 that
constitutes Debt not otherwise permitted by this Section 5.07;


 


(ix)           Guarantees by Excluded AES Entities of Debt
and other Obligations of other Excluded AES Entities; and


 


(x)            Guarantees by any Subsidiary of the
Borrower existing on the date that such Subsidiary ceased to be an “Excluded
AES Entity” hereunder that were permitted pursuant to Section 5.07(b)(ix) when
such Subsidiary was an “Excluded AES Entity”.


 


Notwithstanding
any of the foregoing in this Section 5.07(b), in no event shall Qualified
Holding Companies incur any Debt other than Debt permitted by the definition of
“Qualified Holding Company”.


 


Section 5.08  Use of Proceeds.


 


The proceeds of the Loans made, the Revolving Letters of Credit issued
(or deemed issued) under this Agreement will be used by the Borrower for
working capital and other general corporate purposes.  None of such proceeds will be used, directly
or indirectly, for the purpose, whether immediate, incidental or ultimate, of buying
or carrying any “margin stock” within the meaning of Regulation U.


 


Section 5.09  Restricted Payments.


 


(a)   The Borrower will not declare or
pay any dividends, purchase, redeem, retire, defease or otherwise acquire for
value any of its Equity Interests or Qualified Equity-Linked or Hybrid Securities
now or hereafter outstanding, return any capital to its stockholders as such,
make any distribution of assets, Equity Interests, obligations or securities to
its stockholders, or permit any of its Subsidiaries to purchase, redeem,
retire, defease or otherwise acquire for value any Equity Interests or
Qualified Equity-Linked or Hybrid Securities in the Borrower (each, a “Restricted Payment”), except:


 


(i)            the
Borrower may declare and pay regularly-scheduled cash dividends to the holders
of (x) the Existing Trust Preferred Securities and (y) the Borrower’s
preferred stock;


 


(ii)           the
Borrower may redeem, repurchase, refinance, replace or refund any of the Obligations
arising (x) in respect of the Existing Trust Preferred Securities at any
time, (y) in respect of any other preferred stock, Hybrid Securities and
convertible securities (including Qualified Equity-Linked or Hybrid Securities)
of the Borrower at any time with the proceeds of any contemporaneous issuance
and sale by the Borrower of its Capital Stock (other than Redeemable Stock) or (z) in
respect of any Qualified 


 


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Restated Credit Agreement


 


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Equity-Linked
or Hybrid Securities, within 180 days of the final maturity date or mandatory
redemption date of any such other Qualified Equity-Linked or Hybrid Securities;


 


(iii)          the
Borrower may declare and make Restricted Payments if, after giving effect
thereto, the aggregate of all Restricted Payments declared or made subsequent
to June 30, 2008 (pursuant to this Section 5.09(a)(iii)) does not
exceed 20% (or, if such amount is a loss, minus
100%) of an amount equal to Adjusted Parent Operating Cash Flow less Corporate Charges for the period from July 1, 2008
through the last day of the fiscal quarter of the Borrower then most recently
ended for which financial statements were required to be delivered to the Agent
pursuant to Section 5.01(a) or (b) (treated for this purpose as
a single accounting period); provided that
if after giving effect to such Restricted Payment, the amount of all Restricted
Payments made pursuant to this clause (iii) since the first day of the
most recently ended four fiscal quarter period for which financial statements
were required to be delivered to the Agent pursuant to Section 5.01(a) or
(b) through the date of such Restricted Payment is greater than the
greater of (1) 20% of an amount equal to Adjusted Parent Operating Cash
Flow less Corporate Charges for such four fiscal quarter period and (2) $250,000,000,
the Borrower shall only be permitted to make a Restricted Payment in excess of
such greater amount for such four fiscal quarter period to the extent that
before and after giving effect to such Restricted Payment, the Borrower and its
Subsidiaries shall have a combination of Unrestricted Cash and unused
commitments under the Revolving Credit Loan Facility equal to or greater than
the amount of the Revolving Credit Loan Facility in effect at that time;


 


(iv)          the
Borrower may declare and make Restricted Payments not otherwise permitted under
this Section 5.09 in an aggregate amount not to exceed $500,000,000 from
and after the Amended and Restatement Effective Date, provided, that
before and after giving effect to each Restricted Payment under this Section 5.09(a)(iv),
the Borrower and its Subsidiaries shall have any combination of Unrestricted
Cash and unused commitments under the Revolving Credit Loan Facility equal to
or greater than aggregate amount of the Revolving Credit Loan Facility in
effect at that time;


 


(v)           (A) any
Subsidiary of the Borrower (other than a Subsidiary Guarantor) may purchase,
redeem, retire, defease or otherwise acquire for value any Equity Interests in
the Borrower using funds that are not able to be paid to the Borrower or a Subsidiary
Guarantor as a dividend due to legal or contractual restrictions affecting such
Subsidiary or, from and after January 1, 2010, due to incremental tax
liability, (B) any Special Purpose Financing Subsidiary may purchase,
redeem, retire, defease or otherwise acquire for value any Equity Interests in
the Borrower using proceeds of financing that does not constitute Recourse Debt
and as to which neither the Borrower nor any of its other Subsidiaries (a) provides
credit support of any kind, (b) is directly or indirectly liable as a
guarantor or otherwise or (c) constitutes the lender  and (C) any Subsidiary may purchase,
redeem, retire, defease or otherwise acquire for value any Equity Interests in
the Borrower to the extent that the Borrower would have been permitted to do so
under clause (iii) or (iv) of this Section 5.09(a); provided that, in the case of clause (A) only to the
extent of any Restricted Payments made by a Qualified Holding Company, clause (B) only
to the extent of such Restricted Payments funded with proceeds received from
the Borrower, any Qualified Holding Company or any Subsidiary Guarantor and
clause (C), 


 


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Restated Credit Agreement


 


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such
Restricted Payment shall be deemed to be a Restricted Payment made by the
Borrower under clause (iii) or (iv) of this Section 5.09(a) (and
the making of such Restricted Payment shall reduce the availability thereunder)
and shall only be permitted to the extent there would have been availability
for the Borrower to make such Restricted Payment under clause (iii) or (iv) of
this Section 5.09(a); and


 


(vi)          The Borrower and its Subsidiaries may make
regularly-scheduled interest payments and pay dividends on Qualified
Equity-Linked or Hybrid Securities.


 


provided that nothing in this Section shall
prohibit the payment of any dividend or distribution within 45 days after the
declaration thereof if such declaration was not prohibited by this Section.


 


(b)   Notwithstanding Section 5.09(a) above,
so long as any Revolving Credit Loan or Term Loan remains outstanding, no
Subsidiary Guarantor will, without the prior written consent of the Required
Banks, if, and for so long as, an Actionable Default shall have occurred and be
continuing, (i) declare or make any dividend payment or other distribution
of assets, properties, cash, rights, obligations or securities on account of
any shares of any class of capital stock of such Subsidiary Guarantor (other
than stock splits and dividends payable solely in equity securities of such
Subsidiary Guarantor), or purchase, redeem or otherwise acquire for value (or
permit any of its Subsidiaries to do so), any shares of any class of capital
stock of such Subsidiary Guarantor or any warrants, rights or options to
acquire any such shares, now or hereafter outstanding or (ii) make any
Investment in or otherwise advance any funds to the Borrower, or, any
Subsidiary of the Borrower; and


 


Section 5.10  Negative Pledge.


 


Neither the Borrower nor any Subsidiary of the Borrower
will create, assume or suffer to exist any Lien on any asset now owned or
hereafter acquired by it, except:


 


(a)           Liens
created under the Financing Documents;


 


(b)           Liens
existing on the Effective Date securing Debt outstanding on the Effective Date;


 


(c)           any
Lien existing on any asset of any Person at the time such Person becomes a
Subsidiary of the Borrower and not created in contemplation of such event;


 


(d)           any
Lien on any asset securing Debt incurred or assumed for the purpose of
financing all or any part of the cost of acquiring such asset; provided that such Lien attaches to such
asset concurrently with or within 90 days after the acquisition thereof;


 


(e)           any
Lien on any asset of any Person existing at the time such Person is merged or
consolidated with or into the Borrower or a Subsidiary of the Borrower and not
created in contemplation of such event; provided
that such Lien shall not attach to any asset held by the Borrower or any
Subsidiary of the Borrower immediately prior to such merger or consolidation;


 


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Restated Credit Agreement


 


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(f)            any
Lien existing on any asset prior to the acquisition thereof by the Borrower or
a Subsidiary of the Borrower and not created in contemplation of such
acquisition;


 


(g)           any
Lien arising out of the refinancing, extension, renewal or refunding of any
Debt secured by any Lien permitted by any of the foregoing clauses or clause (o) of
this Section; provided that such
Debt is not increased and is not secured by any additional assets (other than,
in the case of Debt permitted under Section 5.07(b)(vii), Liens on assets
of any Subsidiary permitted under such Section 5.07(b)(vii) and Section 5.16(b) to
be obligated on such Debt);


 


(h)           Liens
arising in the ordinary course of its business which do not secure obligations
in an aggregate amount in excess of $25,000,000 and do not in the aggregate
materially detract from the value of its assets or materially impair the use
thereof in the operation of its business;


 


(i)            Liens
in connection with worker’s compensation, social security obligations, taxes,
assessments, statutory obligations or other similar charges, good faith
deposits in connection with tenders, contracts or leases to which the Borrower
or any of its Subsidiaries is a party or other deposits required to be made in
the ordinary course of business and not in connection with borrowing money or
obtaining advances or credit; provided
in each case that the obligation or liability arises in the ordinary course of
business and if overdue is being contested in good faith by appropriate
proceedings;


 


(j)            inchoate
materialmen’s, mechanics’, workmen’s, repairmen’s, employees’, carriers’,
warehousemen’s, or other like Liens arising in the ordinary course of business
of the Borrower or its Subsidiaries;


 


(k)           with
respect to real property, easements, rights of way, reservations and other
minor defects or irregularities in title which do not materially impair the use
thereof for the purposes for which it is held by the Borrower or its
Subsidiaries;


 


(l)            Liens
securing any future interest or dividends payable in respect of any Debt
permitted to be issued under Section 5.07 for one six month period with
respect to such Debt on cash or Temporary Cash Investments which constituted a
portion of the cash proceeds to the Borrower or a Subsidiary of the Borrower
from the issuance of such Debt;


 


(m)          Liens
on cash and Temporary Cash Investments securing Derivatives Obligations of the
Subsidiaries;


 


(n)           Liens
on cash and Temporary Cash Investments that secure contingent obligations to
reimburse any bank or other Person for amounts paid under Guarantees, surety or
performance bond or similar instrument that supports obligations to make
Investments in Subsidiaries permitted to be made under Section 5.16;


 


(o)           Liens
constituting or securing Debt of Subsidiaries (other than Subsidiary
Guarantors) permitted by Section 5.07(b)(ii), (vi), (vii) or (viii) or
utility obligations or 


 


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Restated Credit Agreement


 


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other
customer, supplier or contractor obligations associated with AES Businesses
that are limited to the assets and revenues of the related AES Businesses and
the Capital Stock or other assets (including contract rights) of Subsidiaries
of the Borrower having a direct or indirect interest in such AES Businesses
and, in the case of any Cameroon Business, the assets and revenues of any other
Cameroon Business and the Capital Stock (other than Capital Stock that has been
pledged to the Secured Holders pursuant to the Collateral Documents) or other
assets (including contract rights) of Subsidiaries of the Borrower (other than
Subsidiary Guarantors) having a direct or indirect interest in any Cameroon
Business;


 


(p)           Liens
on the Creditor Group Collateral securing the Debt of the Borrower or
obligations of the Borrower under Hedge Agreements; provided that Liens on the Creditor Group Collateral
securing First Priority Secured Debt of the Borrower shall only secure First
Priority Secured Debt up to an aggregate principal amount not to exceed
$1,750,000,000 (less the aggregate amount of mandatory prepayments of Term
Loans and mandatory reductions of Revolving Credit Loan Commitments resulting
from the application of Net Cash Proceeds from IPALCO Asset Sales);


 


(q)           Liens
securing Debt permitted by Section 5.07(a)(viii) or Section 5.07(b)(iv),
provided that such Debt is
secured solely by the asset that is the subject of the proposed sale, transfer
or other disposition related to such Debt;


 


(r)            Liens
on the assets of, or Investments in, any Excluded AES Entity securing Debt or
other obligations of any Excluded AES Entity permitted to be incurred
hereunder;


 


(s)           Liens
on cash set aside at the time of the issuance of Debt permitted to be incurred
pursuant to Section 5.07 or Temporary Cash Investments purchased with such
cash, in either case to the extent that such cash or Temporary Cash Investments
pre-fund the repayment or redemption of such Debt and are held in a third party
escrow account with an escrow agent on terms and conditions reasonably
satisfactory to the Agent to be applied for such purpose;


 


(t)            (i) Liens
on cash and Temporary Cash Investments that secure letters of credit up to an
aggregate principal amount not to exceed $300,000,000 and (ii) Liens on
rights under agreements relating to the sale of Equity Interests of the
Borrower (and any ancillary agreements) that secure letters of credit; provided that at the time such Lien is
created, no Default or Event of Default has occurred or is continuing; and


 


(u)           Liens
existing on any asset of any Subsidiary of the Borrower at the time such
Subsidiary ceased to be an “Excluded AES Entity” hereunder that were permitted
pursuant to Section 5.10(r) when such Subsidiary was an “Excluded AES
Entity”.


 


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Restated Credit Agreement


 


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Section 5.11  Consolidations and Mergers.


 


The Borrower will not merge into or consolidate with
any Person or permit any Person to merge into it, or permit any of its
Subsidiaries to do so, except that:


 


(a)           any Subsidiary of the Borrower may merge
into or consolidate with any other Subsidiary, provided
that, in the case of any such merger or consolidation, the Person formed by
such merger or consolidation shall be a wholly owned Subsidiary of the Borrower
and any third-party consents or waivers necessary for such merger or
consolidation shall have been obtained, provided
further that, (A), in the case of any such merger or consolidation
to which a Pledged Subsidiary is a party, the Person formed by such merger or
consolidation shall be a “Pledged Subsidiary” and (B) in the case of any
such merger or consolidation to which a Subsidiary Guarantor is a party, the
Person formed by such merger or consolidation shall be a Subsidiary Guarantor;


 


(b)           in connection with any sale or other
disposition permitted under Section 5.18 (other than clause (ii) thereof),
any Subsidiary of the Borrower may merge into or consolidate with any other
Person or permit any other Person to merge into or consolidate with it; and


 


(c)           the Borrower may merge with another Person;


 


provided, however, that in each case, such merger
or consolidation is otherwise in compliance with this Agreement and immediately
before and after giving effect thereto, no Default shall have occurred and be
continuing and, in the case of any merger to which the Borrower is a party, the
Borrower is the Person surviving such merger.


 


Notwithstanding
any of the foregoing in clauses (a) and (b) of this Section 5.11,
the Borrower will not permit any Subsidiary of the Borrower with any direct or
indirect interest in (x) a Power Supply Business to consolidate or merge
with, any other Person with a direct or indirect interest in any other Power
Supply Business or any unrelated business or (y) any unrelated business to
consolidate or merge with, any other Person with a direct or indirect interest
in any Power Supply Business, subject to the proviso set forth in Section 5.16(b) so
that any transaction permitted by such proviso shall also be permitted
by this Section 5.11 (except for consolidations and mergers by any
Subsidiary of the Borrower which, after giving pro forma effect to such
consolidation or merger, contributed less than 15% of the Parent Operating Cash
Flow for the immediately preceding four fiscal quarters and is projected by the
Borrower at the time of such consolidation or merger to contribute less than
15% of the Parent Operating Cash Flow for the immediately succeeding four fiscal
quarters).


 


Section 5.12  [Intentionally omitted.]


 


Section 5.13  Cash Flow Coverage.


 


The Borrower will maintain at the end of each fiscal quarter of the
Borrower, a Cash Flow Coverage Ratio of not less than the ratio set forth below
for each period set forth below:


 


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  Four

  Fiscal Quarters

  Ending

  	
   

  	
  Minimum Cash Flow

  Coverage Ratio

  	
   

  
	
  December 31,
  2003

  	
   

  	
  1.20

  	
   

  
	
  March 31,
  2004

  	
   

  	
  1.20

  	
   

  
	
  June 30,
  2004

  	
   

  	
  1.20

  	
   

  
	
  September 30,
  2004

  	
   

  	
  1.25

  	
   

  
	
  December 31,
  2004

  	
   

  	
  1.25

  	
   

  
	
  March 31,
  2005

  	
   

  	
  1.30

  	
   

  
	
  June 30,
  2005

  	
   

  	
  1.35

  	
   

  
	
  September 30,
  2005

  	
   

  	
  1.35

  	
   

  
	
  December 31,
  2005

  	
   

  	
  1.40

  	
   

  
	
  March 31,
  2006

  	
   

  	
  1.40

  	
   

  
	
  June 30,
  2006

  	
   

  	
  1.40

  	
   

  
	
  September 30,
  2006

  	
   

  	
  1.40

  	
   

  
	
  December 31,
  2006

  	
   

  	
  1.40

  	
   

  
	
  March 31,
  2007

  	
   

  	
  1.40

  	
   

  
	
  June 30,
  2007

  	
   

  	
  1.45

  	
   

  
	
  September 30,
  2007

  	
   

  	
  1.45

  	
   

  
	
  December 31,
  2007

  	
   

  	
  1.50

  	
   

  
	
  March 31,
  2008

  	
   

  	
  1.50

  	
   

  
	
  June 30,
  2008 and thereafter

  	
   

  	
  1.30

  	
   

  



 


Section 5.14  Recourse Debt to Cash Flow Ratio.


 


The Borrower will maintain at the end of each fiscal quarter of the
Borrower, a Recourse Debt to Cash Flow Ratio of not more than the ratio set
forth below for each period set forth below:


 


	
  Four Fiscal Quarter Ending

  	
   

  	
  Maximum Recourse Debt

  to Cash Flow Ratio

  	
   

  
	
  June 30,
  2005

  	
   

  	
  7.50

  	
   

  
	
  September 30,
  2005

  	
   

  	
  7.50

  	
   

  
	
  December 31,
  2005

  	
   

  	
  7.50

  	
   

  
	
  March 31,
  2006

  	
   

  	
  7.50

  	
   

  
	
  June 30,
  2006

  	
   

  	
  7.50

  	
   

  
	
  September 30,
  2006

  	
   

  	
  7.50

  	
   

  
	
  December 31,
  2006

  	
   

  	
  7.00

  	
   

  
	
  March 31,
  2007

  	
   

  	
  7.00

  	
   

  
	
  June 30,
  2007

  	
   

  	
  7.00

  	
   

  
	
  September 30,
  2007

  	
   

  	
  7.00

  	
   

  
	
  December 31,
  2007

  	
   

  	
  7.00

  	
   

  
	
  March 31,
  2008

  	
   

  	
  6.50

  	
   

  
	
  June 30,
  2008

  	
   

  	
  6.50

  	
   

  
	
  September 30,
  2008

  	
   

  	
  8.00

  	
   

  
	
  December 31,
  2008

  	
   

  	
  8.00

  	
   

  



 


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  Four Fiscal Quarter Ending

  	
   

  	
  Maximum Recourse Debt

  to Cash Flow Ratio

  	
   

  
	
  March 31,
  2009

  	
   

  	
  8.50

  	
   

  
	
  June 30,
  2009

  	
   

  	
  8.50

  	
   

  
	
  September 30,
  2009

  	
   

  	
  8.50

  	
   

  
	
  December 31,
  2009

  	
   

  	
  8.50

  	
   

  
	
  March 31,
  2010

  	
   

  	
  7.25

  	
   

  
	
  June 30,
  2010

  	
   

  	
  7.25

  	
   

  
	
  September 30,
  2010

  	
   

  	
  7.25

  	
   

  
	
  December 31,
  2010

  	
   

  	
  7.25

  	
   

  
	
  March 31,
  2011

  	
   

  	
  7.25

  	
   

  
	
  June 30,
  2011 and thereafter

  	
   

  	
  7.25

  	
   

  



 


Section 5.15  Transaction with Affiliates.


 


Except pursuant to agreements existing on the Effective Date and listed
on Schedule II attached hereto, the Borrower will not, and will not permit any
Subsidiary of the Borrower to, directly or indirectly, in any transaction
involving aggregate consideration in excess of $1,000,000, pay any funds to or
for the account of, make any investment (whether by acquisition of stock or
indebtedness, by loan, advance, transfer of property, guarantee or other
agreement to pay, purchase or service, directly or indirectly, any Debt, or
otherwise) in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect any transaction in
connection with any joint enterprise or other joint arrangement with, any
Affiliate; provided, however, that the foregoing provisions of
this Section shall not prohibit (a) the Borrower or any Subsidiary of
the Borrower from making sales to or purchases from any Affiliate and, in
connection therewith, extending credit or making payments, or from making
payments for services rendered by any Affiliate, if such sales or purchases are
made or such services are rendered in the ordinary course of business and on
terms and conditions at least as favorable to the Borrower or such Subsidiary
as the terms and conditions which would apply in a similar transaction with a
Person not an Affiliate; (b) the Borrower or any Subsidiary of the
Borrower from making payments of principal, interest and premium on any Debt of
the Borrower or such Subsidiary held by an Affiliate if the terms of such Debt
are substantially as favorable to the Borrower or such Subsidiary as the terms
which could have been obtained at the time of the creation of such Debt from a
lender which was not an Affiliate and (c) the Borrower or any Subsidiary
of the Borrower from participating in, or effecting any transaction in
connection with, any joint enterprise or other joint arrangement with any
Affiliate if the Borrower or such Subsidiary participates in the ordinary
course of its business and on a basis no less advantageous than the basis on
which such Affiliate participates.  The
provisions of this Section 5.15 shall not apply to (x) transactions
between the Borrower or any of its Subsidiaries, on the one hand, and any
officer, director or employee of the Borrower or any of its Subsidiaries, on
the other hand, that are approved by the Board of Directors of the Borrower or
any committee of the Board of Directors consisting of the Borrower’s
independent directors and (y) the payment of reasonable and customary
regular fees to directors of the Borrower or a Subsidiary of the Borrower.


 


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Section 5.16  Investments in Other Persons.


 


(a)   The Borrower shall not make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person, except:


 


(i)            (A) Investments
by the Borrower and its Subsidiaries in their Subsidiaries outstanding on the
Effective Date, (B) additional equity Investments in Obligors and (C) additional
Investments in Obligors consisting of intercompany Debt provided that any Debt owing to the
Borrower shall (x) constitute Pledged Debt and be delivered to the
Collateral Trustees pursuant to the terms of the Security Agreement and (y) be
subordinated in all respects to the Obligations of the Obligors under the
Financing Documents;


 


(ii)           loans
and advances by the Borrower or any of its Subsidiaries to its employees in the
ordinary course of the business of the Borrower and its Subsidiaries as
presently conducted, which in the case of loans and advances to employees of
the Borrower, the Subsidiary Guarantors and the Qualified Holding Companies
shall not exceed an aggregate principal amount of $10,000,000 at any time
outstanding;


 


(iii)          Investments
by the Borrower and its Subsidiaries in Temporary Cash Investments;


 


(iv)          Investments
existing on the Effective Date and Investments in Subsidiaries resulting from
drawings under, or renewals or extensions of, letters of credit, surety bonds,
Guarantees or performance bonds supporting obligations of Subsidiaries issued
and outstanding on the Effective Date (including renewals and extensions
thereof) and Investments in Subsidiaries to cash collateralize obligations
supported by such letters of credit, bonds or Guarantees if they expire or are
cancelled undrawn;


 


(v)           Investments
by the Borrower and its Subsidiaries in any non-cash proceeds received by the
Borrower or such Subsidiary in connection with any transaction permitted by the
provisions of Section 5.18;


 


(vi)          Investments
by the Borrower and its Subsidiaries in any of their Debt in the form of any
payments, redemption or repurchase of such Debt not prohibited by this
Agreement;


 


(vii)         Investments
by an Excluded AES Entity in another Excluded AES Entity or in another Person,
the assets of which shall not consist of Debt or Equity Interests of the
Borrower or any of its Subsidiaries, other than Debt of the Borrower or any of
its Subsidiaries with a fair market value (together with the fair market value
of Debt of the Borrower or any of its Subsidiaries received by the Borrower or
any Subsidiary as non-cash proceeds in any transaction permitted by the
provisions of Section 5.18) not in excess of $15,000,000 in the aggregate;


 


(viii)        Investments
by the Borrower and its Subsidiaries in their Subsidiaries or in Excluded AES
Entities resulting from the creation, dissolution, restructuring or
reorganization of the holdings of the Borrower, any Subsidiary or Excluded AES
Entity


 


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permitted by Section 5.16(b) that
does not result in the net increase in the amount invested by the Borrower and
its Subsidiaries in their Subsidiaries or in Excluded AES Entities and does not
result in a Default;


 


(ix)           Investments
received in connection with the bankruptcy or reorganization of, or settlement
of delinquent accounts and disputes with, or as a result of a default by,
customers or suppliers to, or co-investors in, an AES Business;


 


(x)            Investments by the Borrower and its
Subsidiaries not otherwise permitted under this Section 5.16; provided that, with respect to each
Investment made pursuant to this clause (x):


 


(A)     Investments by the Borrower in Excluded AES
Entities after June 23, 2005 shall not exceed $250,000,000; provided that at any time that the Recourse Debt to Cash
Flow Ratio is less than 4.00 to 1.00 there shall be no limitation on
Investments in Excluded AES Entities;


 


(B)     such Investment shall be in property and assets,
or in the Equity Interests of a Person owning property and assets, which are
part of a Permitted Business; and


 


(C)     (1) immediately before and immediately after
giving pro forma effect to any
such purchase or other acquisition, no Event of Default shall have occurred and
be continuing and (2) immediately after giving effect to such purchase or
other acquisition, the Borrower and its Subsidiaries shall be in pro forma compliance with all of the
covenants set forth in Sections 5.13 and 5.14, such compliance to be determined
on the basis of the financial information most recently delivered to the Agent
and the Bank Parties as though such Investment had been consummated as of the
first day of the fiscal period covered thereby;


 


(xi)           (A) Investments
by any Subsidiary with funds or other property received by such Subsidiary from
the Borrower or a Subsidiary as a result of an Investment otherwise permitted
hereby and (B) Investments by any Subsidiary (other than a Qualified
Holding Company) with funds or other property generated by its operations
(including by way of financings permitted hereby) or by the operations
(including by way of financings permitted hereby) of its Subsidiaries in any
other Subsidiary which either is a direct or indirect Subsidiary of such
investing Subsidiary or a direct or indirect parent company of such investing
Subsidiary and the proceeds of such Investment shall be applied by the
Subsidiary receiving such Investment solely for funding the operation,
maintenance (including modifications and upgrades to comply with applicable
laws and regulations), on-going construction or working capital requirements
which are necessary for the operation of the business of such Subsidiary or for
such Subsidiary to satisfy its contractual and legal obligations;


 


(xii)          Investments
by any Subsidiary of the Borrower consisting of loans made to any Person which
directly or indirectly holds the Equity Interests of such Subsidiary;


 


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(xiii)         Investments
in Subsidiaries resulting from drawings under, or renewals or extensions of,
Guarantees supporting obligations of Subsidiaries under any Secured Treasury
Management Service Agreement (including renewals and extensions thereof) and
Investments in Subsidiaries to cash collateralize obligations supported by such
Guarantees if they expire or are cancelled undrawn;


 


(xiv)        Investments
in marketable securities as part of the Borrower’s management of its long-term
and deferred compensation obligations in the ordinary course of business;


 


(xv)         Investments
in any Subsidiary of the Borrower existing on the date that such Subsidiary
ceased to be an “Excluded AES Entity” hereunder that were permitted to be made
pursuant to this Section 5.16 when such Subsidiary was an “Excluded AES
Entity”.


 


(b)   Notwithstanding any of the
foregoing in clause (a) above, the Borrower will not permit any Subsidiary
of the Borrower with any direct or indirect interest in (i) a Power Supply
Business to make any Investment in, or consolidate or merge with, any other
Person with a direct or indirect interest in any other Power Supply Business or
any unrelated business or (ii) any unrelated business to make any
Investment in, or to consolidate or merge with, any other Person with a direct
or indirect interest in any Power Supply Business; provided that (x) Investments permitted by Section 5.16(a)(ii),
(iii), (v), (vi), (vii), (viii), (ix), (xii), (xiii) and (xiv) shall be
permitted notwithstanding the foregoing and (y) a Subsidiary of the
Borrower (each, an “Intermediate Holding Company”)  may
serve as a holding company for any or all of the Borrower’s direct and indirect
interests in a Power Supply Business or an unrelated business, so long as:


 


(1)           each such Intermediate
Holding Company’s direct and indirect interest in any Power Supply Business or
unrelated business shall be limited to the ownership of Capital Stock or Debt
obligations of a Person with a direct or indirect interest in such Power Supply
Business or unrelated business;


 


(2)           no Lien shall exist
upon any asset of any Intermediate Holding Company (other than Liens on the
Capital Stock of, or loan to, the Borrower or a Subsidiary of an Intermediate
Holding Company securing Debt of such Intermediate Holding Company or such
Subsidiary and Liens securing Debt permitted by Sections 5.07(b)(i),
(b)(ii), (b)(iii), (b)(iv), (b)(vi), (b)(vii) and (b)(viii)); and


 


(3)           no Intermediate Holding
Company shall incur, assume, create or suffer to exist any Debt (including any
Guarantee of Debt) other than Debt owing to the Borrower, any Qualified Holding
Company or any Subsidiary of such Intermediate Holding Company and Debt
permitted by Sections 5.07(b)(i), (ii), (iii), (iv), (vi), (vii) or
(viii).


 


Notwithstanding
anything to the contrary in this Section 5.16(b), (A) any Subsidiary
of the Borrower with any direct or indirect interest in (i) a Power Supply
Business may make an Investment in any other Person with a direct or indirect
interest in any other Power Supply Business or any unrelated business or (ii) any
unrelated business may make an 


 


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Investment in any other Person with a direct or
indirect interest in any Power Supply Business, so long as, in each case, after
giving pro forma effect to such Investment, such Subsidiary and such Person in
the aggregate contributed less than 15% of the Parent Operating Cash Flow for
the immediately preceding four fiscal quarters and are projected by the
Borrower at the time of such Investment to contribute less than 15% of the
Parent Operating Cash Flow for the immediately succeeding four fiscal quarters
and (B) any Cameroon Business may make an Investment in any other Cameroon
Business.


 


Section 5.17  Upstreaming of Net Cash Proceeds by
Subsidiaries.


 


The Borrower shall cause any of its Subsidiaries who have received Net
Cash Proceeds from (i) any Asset Sale or (ii) the incurrence or sale
of any Debt permitted by Section 5.07(b)(vi) to transfer such Net
Cash Proceeds to the Borrower; provided
that such transfer shall not be required to be made if such transfer would
violate any applicable contracts or would violate applicable law or if
applicable law would require minority shareholder approval (it being understood
that the Borrower shall use reasonable efforts to obtain such minority
shareholder approval), a valuation or a discretionary order or would, in the
Borrower’s good faith determination or the good faith determination of a
majority of the board of directors of such Subsidiary, involve a reasonable
likelihood of there being a breach of fiduciary duties by the directors of such
Subsidiary.  In connection with managing
transfers of Net Cash Proceeds pursuant to this Section 5.17, (a) the
Borrower may cause Net Cash Proceeds to be transferred to Qualified Holding
Companies whose Equity Interests have been pledged to the Secured Holders
pursuant to the Collateral Documents if the Borrower nonetheless makes the
related mandatory prepayment that would otherwise be required by Section 2.10(b) using
funds not otherwise required to be made the basis of any mandatory prepayment
and (b) if the Net Cash Proceeds are less than $10,000,000, the Borrower
shall not be required to cause such Net Cash Proceeds effectively to be
transferred directly or indirectly to the Borrower and applied pursuant to Section 2.10(b) until
the aggregate Net Cash Proceeds not so applied equal or exceed
$10,000,000.  In connection with managing
transfers of Net Cash Proceeds pursuant to this Section 5.17 and making
loans, investments and other advances to Subsidiaries, the Borrower may cause
Net Cash Proceeds to be transferred among Subsidiaries as permitted by Section 5.16,
rather than transferred to the Borrower, in lieu of loans, investments or other
advances the Borrower would otherwise be permitted to make as permitted by Section 5.16
and would make; provided that
amounts that otherwise would be paid to the Borrower or a Qualified Holding
Company whose Equity Interests have been pledged to the Secured Holders
pursuant to the Collateral Documents shall be treated as an Investment and such
Investment must be permitted by Section 5.16.


 


Section 5.18  Sales, Etc., of Assets.


 


The Borrower will not sell, lease, transfer or otherwise dispose of, or
permit any of its Subsidiaries to sell, lease, transfer or otherwise dispose
of, any assets, or grant any option or other right to purchase, lease or
otherwise acquire any assets, except:


 


(i)            sales
of assets in the ordinary course of its business and the granting of any option
or other right to purchase, lease or otherwise acquire assets in the ordinary
course of its business;


 


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(ii)           in
a transaction permitted by Section 5.11;


 


(iii)          sales,
transfers or other dispositions of assets among the Borrower and its
Subsidiaries; provided, however, that (a) in respect of
sales, transfers or other dispositions by the Borrower to its Subsidiaries, the
Borrower shall not sell, lease, transfer or otherwise dispose of any assets
(other than Excluded AES Entities) to any Excluded AES Entity, and (b) in
respect of sales, transfers or other dispositions by Subsidiaries to other
Subsidiaries, (1) with respect to Excluded AES Entities, only Excluded AES
Entities may sell, transfer or otherwise dispose of assets to another Excluded
AES Entity and (2) with respect to other Subsidiaries, such sales,
transfers or other dispositions are either permitted by Section 5.16 or
the transferring Subsidiary has received fair value for such sales, transfers
or dispositions; provided, further, however, that for the avoidance of doubt,
the transfer of AES GEH Holdings, LLC’s ownership interest in Global Energy
Holdings CV to AES GEH, Inc. and the subsequent dissolution of AES GEH
Holdings, LLC is permitted hereunder; and


 


(iv)          sales,
transfers or other dispositions of assets so long as (i) the consideration
received by the Borrower and its Subsidiaries for such asset shall have been
determined on the basis of arms-length negotiations with a non-Affiliate, (ii) in
the case of sales of assets or Equity Interests of, or other Investments in,
IPALCO or any of its Subsidiaries or any Subsidiary Guarantor or Subsidiary
thereof, no less than 75% of the purchase price for such asset shall be paid to
the Borrower and its Subsidiaries solely in cash or securities or other
obligations that can be readily converted to cash so long as such securities or
other obligations are converted to cash on or within 30 days after the closing
date of such sale, transfer or other disposition and (iii) any non-cash
proceeds received by the Borrower or AES BVI II from the sale of such assets
shall not consist of Debt or Equity Interests of the Borrower or any of its
Subsidiaries (other than Debt of the Borrower or any of its Subsidiaries with a
fair market value (together with the fair market value of the Debt of the
Borrower or any of its Subsidiaries comprising the assets of any Person in
which an Excluded AES Entity has made an Investment pursuant to Section 5.16(a)(vii) not
in excess of $15,000,000 in the aggregate) and shall be pledged to the
Collateral Trustees as Security Agreement Collateral under the Security
Agreement;


 


(v)           Liens
permitted by the Financing Documents;


 


(vi)          the
sale of Equity Interests in a project in development or under construction the
proceeds from which shall be used to fund the cost of development or
construction of such project and the sales of Equity Interests by a Subsidiary
the proceeds of which are used to fund the working capital and other needs of
such Subsidiary and its Subsidiaries in the ordinary course of business,
including reasonably anticipated needs for repaying Debt and other obligations
and making Investments in its business;


 


(vii)         (1) a
disposition resulting from the bona fide exercise by governmental authority of
its claimed or actual power of eminent domain; (2) any cash payments
otherwise permitted under this Agreement; (3) any sale, transfer,
conveyance, lease or other disposition of an asset in the ordinary course of
business and consistent with past 


 


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practice
pursuant to the terms of any power sales agreement or steam sales agreement or
other agreement or contract related to the output or product of, or services
rendered by, a Power Supply Business as to which a Subsidiary is the supplying
party; (4) any disposition of any Equity Interest in a Power Supply
Business pursuant to the terms of a joint venture agreement, shareholders
agreement or similar arrangement existing as of the Effective Date that
requires one shareholder to transfer its interest to another upon terms and in
circumstances customary for the industry (provided
that, in the case of a disposition of Equity Interests in IPALCO or any of its
Subsidiaries or any Subsidiary Guarantor or Subsidiary thereof, any cash
received in connection with such disposition shall be treated as Net Cash
Proceeds from a Asset Sale); or (5) any disposition of assets subject to a
Lien permitted hereby that is transferred to the lienholder or its designee in
satisfaction or settlement of the lienholder’s claim or a realization upon a
security interest permitted under this Agreement;


 


(viii)        any
disposition in connection with directors’ qualifying shares or investments by
foreign nationals mandated by applicable law;


 


(ix)           any
sale of shares of Redeemable Stock of a Subsidiary to the extent such shares
constitute Debt permitted by Section 5.07;


 


(x)            a
sale-leaseback transaction involving substantially all of the assets of a Power
Supply Business where a Subsidiary sells the Power Supply Business to a Person
in exchange for the assumption by that Person of the Debt financing the Power
Supply Business and the Subsidiary leases the Power Supply Business from such
Person; provided that such sale, assumption and lease are consummated in each
case on a no less than fair market value basis;


 


(xi)           dispositions
of contract rights, development rights and resource data made in connection
with the initial development of an AES Business and prior to the commencement
of commercial operation of such AES Business for reasonably equivalent value;
and


 


(xii)          transactions
made in order to enhance the repatriation of cash from a Subsidiary where such
Subsidiary is organized under the laws of any jurisdiction other than the
United States or any state thereof to the extent that such cash is received or
held by a Person subject in respect of such cash to the tax laws of a
jurisdiction other than the United States or any state thereof or in order to
increase the after-tax amounts thereof available for immediate distribution (provided that if any asset that is the
subject of such transaction is subject to a Lien in favor of the Secured
Holders immediately prior to such transaction then such asset shall be subject
to a Lien in favor of the Secured Holders immediately after such transaction).


 


provided that in
the case of sales of assets or Equity Interests of, or other Investments in,
IPALCO or any of its Subsidiaries or any Subsidiary Guarantor or Subsidiary
thereof pursuant to clause (iv) above, the Borrower shall apply the Net
Cash Proceeds from such sale to offer to prepay the Term Loans pursuant to Section 2.10(b),
as specified therein.


 


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Notwithstanding the foregoing, the Borrower will not,
and will not permit any of its Subsidiaries to, in one transaction or a series
of related transactions, sell, lease, transfer or otherwise dispose of all or
substantially all of the assets of the Borrower and its Subsidiaries on a
consolidated basis.


 


Section 5.19  Derivative Obligations.  The Borrower shall not (and shall not permit
any Qualified Holding Company, any Subsidiary Guarantor or any operating
Subsidiary of any Subsidiary Guarantor to) enter into any Hedge Agreement,
except for (i) Hedge Agreements entered into to hedge against fluctuations
in interest rates, foreign exchange rates, commodity prices and pension and
other long-term or deferred compensation obligations consistent with prudent
business practice, (ii) Permitted Credit Derivative Transactions and (iii) other
Hedge Agreements not entered into for speculative purposes (as determined by
the Borrower or such Subsidiary at the time of entering into the Hedge
Agreements acting in good faith).


 


Section 5.20  Covenant to Give Security.


 


(a)   Upon (x) the formation or
acquisition of any new direct Subsidiary by the Borrower or AES BVI II having a
fair market value in excess of $3,000,000 or (y) the Investment by the
Borrower and its Subsidiaries in any direct Subsidiary of the Borrower or AES
BVI II that was not a “Pledged Subsidiary” on the Closing Date such that
aggregate assets of such Subsidiary have a fair market value in excess of
$3,000,000, then in each case at the Borrower’s expense:


 


(i)            within
10 days after (A) such formation or acquisition and (B) such
Investment, furnish to the Agent a description of such Subsidiary, in each case
in detail satisfactory to the Agent,


 


(ii)           within
15 days after such formation or acquisition of any new Subsidiary or such
Investment in any direct Subsidiary of the Borrower or AES BVI II that was not
a “Pledged Subsidiary” on the Closing Date, duly execute and deliver security
agreement supplements (if necessary) as specified by, and in form and substance
satisfactory to the Agent, securing payment of all of the Obligations of the
Borrower under the Financing Documents; provided
that if such new Subsidiary is a CFC, only 65% of such Equity Interests shall
be pledged in favor of the Secured Holders,


 


(iii)          within
30 days after such formation or acquisition, take, and cause each Loan Party to
take, whatever action (including, without limitation, the recording of mortgages,
the filing of Uniform Commercial Code financing statements, the giving of
notices and the endorsement of notices on title documents) may be necessary or
advisable in the opinion of the Agent to vest in the Collateral Trustees (or in
any representative of the Collateral Trustees designated by it) valid and
subsisting Liens on the properties purported to be subject to the pledges,
security agreement supplements, and security agreements delivered pursuant to
this Section 5.20, enforceable against all third parties in accordance
with their terms, and


 


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(iv)          at
any time and from time to time, promptly execute and deliver any and all
further instruments and documents and take all such other action as the Agent
may deem necessary or desirable in obtaining the full benefits of, or in
perfecting and preserving the Liens of, such pledges, assignments, security
agreement supplements and security agreements;


 


provided,
however, that Section 5.20(a)(y) shall not be
applicable to Subsidiaries for which a grant or perfection of a Lien on such Subsidiary’s stock would require
approvals and consents from foreign and domestic regulations and from lenders
to, and suppliers, customers or other contractual counterparties of, such
Subsidiary.


 


(b)   Other than with respect to the
Non-Pledged Subsidiaries, the Secured Holders shall have valid, perfected first
priority Lien on (i) 65% of the Equity Interests of each direct Subsidiary
of the Borrower that is (A) organized under the laws of a jurisdiction
other than the United States or any state thereof, or (B) a limited
liability company organized under the laws of the United States or any state
thereof the direct or  indirect
Subsidiary of which is organized under the laws of a jurisdiction other than
the United States or any state  thereof,
(ii) 100% of the Equity Interests of each direct Subsidiary of the
Borrower that is organized under the laws of the United States or any state
thereof other than those Subsidiaries described by clause (i)(B) above and
(iii) 65% of the Equity Interests of each direct Subsidiary of AES
BVI II.


 


Section 5.21  Further Assurances.


 


(a)   Promptly upon request by the
Agent, or any Bank Party through the Agent, correct, and cause each of the
other Loan Parties promptly to correct, any material defect or error that may
be discovered in any Financing Document or in the execution, acknowledgment,
filing or recordation thereof that affect the validity or enforceability
thereof, and


 


(b)   Promptly upon request by the
Agent, or any Bank Party through the Agent, do, execute, acknowledge, deliver,
record, re-record, file, re-file, register and re-register any and all such
further acts, pledge agreements, assignments, financing statements and
continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments as the Agent, or any
Bank Party through the Agent, may reasonably require from time to time in order
to (A) carry out more effectively the purposes of the Financing Documents,
(B) to the fullest extent permitted by applicable law, subject to the
Borrower’s properties, assets, rights or interests to the Liens now or
hereafter intended to be covered by any of the Collateral Documents, (C) perfect
and maintain the validity, effectiveness and priority of any of the Collateral
Documents and any of the Liens intended to be created thereunder and (D) assure,
convey, grant, assign, transfer, preserve, protect and confirm more effectively
unto the Secured Holders the rights granted or now or hereafter intended to be
granted to the Secured Holders under any Financing Document or under any other
instrument executed in connection with any Financing Document to which any Loan
Party is or is to be a party.


 


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ARTICLE
VI



DEFAULTS


 


Section 6.01  Events of Default.


 


If one
or more of the following events (“Events of
Default”) shall have
occurred and be continuing:


 


(a)           any
Loan Party shall fail to pay when due any principal of any Loan or any
Reimbursement Obligation, or shall fail to pay within three days of the date
when due any interest, fees or other amounts payable under any Financing
Document;


 


(b)           the
Borrower shall fail to observe or perform any covenant contained in Sections
5.07 to 5.18, inclusive, or except in accordance with the terms hereof, the
Subsidiary Guaranty in Article 9 shall cease to be in full force and effect;


 


(c)           any
Loan Party shall fail to observe or perform any covenant or agreement contained
in any Financing Document (other than those covered by clause (a) or (b) above)
for 20 days after written notice thereof has been given to the Borrower by the Agent
at the request of any Bank Party;


 


(d)           any
representation, warranty, certification or statement made by any Loan Party in
any Financing Document or in any certificate, financial statement or other
document delivered pursuant to any Financing Document shall prove to have been
incorrect in any material respect when made (or deemed made);


 


(e)           the
Borrower shall fail to make any payment in respect of any Material Debt or
Material Hedge Agreement when due or within any applicable grace period;


 


(f)            any event or condition shall occur which (i) results
in the acceleration of the maturity of any Material Debt of the Borrower or the
early termination of a Material Hedge Agreement of the Borrower by the Borrower’s
counterparty or the acceleration of any Material Debt or the early termination
by the counterparty of such Subsidiary or Subsidiaries of any Material Hedge
Agreement of any (x) Subsidiary of the Borrower that contributed 15% or
more to Parent Operating Cash Flow for the four most recently completed fiscal
quarters of the Borrower or (y) Subsidiaries of the Borrower that in the
aggregate contributed 15% or more to Parent Operating Cash Flow for the four
most recently completed fiscal quarters of the Borrower (in the case of clauses
(x) and (y) above, together with any Person in which such Subsidiary
or Subsidiaries have a direct or indirect equity Investment); (ii) results
in the termination of any commitment to provide financing in an amount in
excess of $50,000,000 to the Borrower or any Material AES Entity or (iii) in
the case of the Borrower, enables the holder of any Material Debt of the
Borrower or counterparty to any Material Hedge Agreement of the Borrower or any
Person acting on such holder’s or counterparty’s behalf to, in the case of any
Material Debt, accelerate the maturity thereof, or, in the case of any Material
Hedge Agreement, to terminate such Material Hedge Agreement, in each case under
this clause (iii) only if the required default notice, if any, from such
holder, counterparty or other Person has been 


 


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given and such holder, counterparty or other Person would be entitled
to accelerate or terminate, as the case may be, such Material Debt or Material
Hedge Agreement within 45 days from the date of determination; provided that the ability of any Person to
demand or receive payment under a Guarantee by the Borrower of Material Debt or
a Material Hedge Agreement of any Subsidiary shall not constitute an Event of
Default under this clause (f) unless either (x) the demand for
payment arises as a result of a default by the Borrower under such Guarantee or
(y) such Person has demanded payment from the Borrower and the Borrower
has not made such payment within 15 Business Days following such demand (or
such longer grace period as is allowed under such Guarantee);


 


(g)           the
Borrower or any Significant AES Entity shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now
or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part
of its property, or shall consent to any such relief or to the appointment of
or taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action to authorize any of the foregoing;


 


(h)           an
involuntary case or other proceeding shall be commenced against the Borrower or
any Significant AES Entity seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or any Significant AES Entity
under the federal bankruptcy laws as now or hereafter in effect;


 


(i)            any
member of the ERISA Group shall fail to pay when due an amount or amounts
aggregating in excess of $15,000,000 which it shall have become liable to pay
under Title IV of ERISA; or notice of intent to terminate a Material Plan shall
be filed under Title IV of ERISA by any member of the ERISA Group, any plan
administrator or any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate, to impose liability (other
than for premiums under Section 4007 of ERISA) in respect of, or to cause
a trustee to be appointed to administer any Material Plan; or a condition shall
exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall occur a
complete or partial withdrawal from, or a default, within the meaning of Section 4219(c)(5) of
ERISA, with respect to, one or more Multiemployer Plans which could cause one
or more members of the ERISA Group to incur a current payment obligation in
excess of $15,000,000;


 


(j)            a
judgment or order for the payment of money in excess of $25,000,000 shall be
rendered against the Borrower or (x) any Subsidiary of the Borrower that
contributed 10% or more to Parent Operating Cash Flow for the four most
recently completed fiscal quarters of the Borrower or (y) more than one
Subsidiary of the 


 


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Borrower and such Subsidiaries in the aggregate contributed 15% or more
to Parent Operating Cash Flow for the four most recently completed fiscal
quarters of the Borrower (in the case of clauses (x) and (y) above,
together with any Person in which such Subsidiary or Subsidiaries have a direct
or indirect equity Investment), and such judgment or order shall continue
unsatisfied and unstayed for a period of 10 days;


 


(k)           any
person or group of persons (within the meaning of Section 13 or 14 of the
Securities Exchange Act of 1934, as amended) other than a member of the AES
Management Group shall have acquired beneficial ownership (within the meaning
of Rule 13d-3 promulgated by the Securities and Exchange Commission under
said Act) of 32.5% or more of the outstanding shares of common stock of the
Borrower; during any period of twelve consecutive calendar months, individuals
who were directors of the Borrower on the first day of such period (or who were
appointed or nominated for election as directors of the Borrower by at least a
majority of the individuals who were directors on the first day of such period)
shall cease to constitute a majority of the board of directors of the Borrower;
or


 


(l)            any
Collateral Document after delivery thereof pursuant to Section 3.01 shall
for any reason (other than pursuant to the terms thereof) cease to create a
valid and perfected first priority lien on and security interest in a material
portion of the Collateral purported to be covered thereby,


 


then, and in every such event, the Agent shall (i) if requested by
the Required Banks, by notice to the Borrower terminate the Revolving Credit
Loan Commitments and they shall thereupon terminate and (ii) if requested
by the Required Banks, by notice to the Borrower declare the Notes, all
interest thereon, and all other amounts payable under this Agreement and the
other Financing Documents to be, and the Notes, all such interest thereon and
all such other amounts shall thereupon become immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower; provided
that in the case of any Automatic Acceleration Event, without any notice to the
Borrower or any other act by the Agent or the Banks, the Revolving Credit Loan
Commitments shall thereupon terminate and the Notes, all interest thereon, and
all other amounts payable under this Agreement and the other Financing
Documents shall become immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower.


 


Section 6.02  Notice of Default.


 


The
Agent shall give notice to the Borrower under Section 6.01(c) promptly
upon being requested to do so by any Bank Party and shall thereupon notify all
the Banks thereof.


 


Section 6.03  Cash Collateral.


 


If any
Automatic Acceleration Event shall occur or the Loans of the Bank Parties shall
have otherwise been accelerated or the Revolving Credit Loan Commitments have
been terminated pursuant to Section 6.01, then without any request or the
taking of any other action by the Agent or any of the Bank Parties, the
Borrower shall be obligated forthwith to pay to the Collateral Agent an amount
in immediately available funds equal to the then aggregate amount


 


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available for Revolving L/C Drawings (regardless of
whether any conditions to any such Revolving L/C Drawings can then be met)
under all Revolving Letters of Credit at the time outstanding, to be held by
the Collateral Agent as cash collateral as provided in Section 2.14 and Section 2.15,
in the case of all Revolving Letters of Credit.


 


ARTICLE
VII



THE AGENT


 


Section 7.01  Appointment and Authorization.


 


Each
Bank Party (on behalf of itself and its Affiliates as potential Hedge Banks)
irrevocably appoints and authorizes the Agent and the Collateral Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under this Agreement and the other Financing Documents as are delegated to the
Agent or the Collateral Agent, as the case may be, by the terms hereof and
thereof, together with all such powers and discretion as are reasonably
incidental thereto.  As to any matters
not expressly provided for by the Financing Documents (including, without
limitation, enforcement or collection of the Notes), neither the Agent nor the
Collateral Agent shall be required to exercise any discretion or to take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions
of the Required Banks, and such instructions shall be binding upon all Bank
Parties and all the holders of Notes; provided,
however, that neither the Agent
nor the Collateral Agent shall be required to take any action that exposes such
agent to personal liability or that is contrary to this Agreement or applicable
law.  Without limiting any of the
foregoing in this Section 7.01, the Agent shall not be required to take
any action with respect to any Default, except as expressly provided in Article 6.  Each of the Collateral Agent and the Agent
agrees to give each Bank Party prompt notice of each notice given to it by the
Borrower pursuant to the terms of this Agreement.


 


Section 7.02  Agent and Affiliates.


 


Citicorp
USA, Inc. and its Affiliates may make loans to, issue letters of credit
for the account of, accept deposits from, acquire Equity Interests in and
generally engage in any kind of banking, trust, financial advisory,
underwriting or other business with each of the Loan Parties and their
respective Affiliates as though Citicorp USA, Inc. were not the Agent
hereunder and without notice to or consent of the Bank Parties.  The Bank Parties acknowledge that, pursuant
to such activities, Citicorp USA, Inc. or its Affiliates may receive information
regarding any Loan Party or its Affiliates (including information that may be
subject to confidentiality obligations in favor of such Loan Party or such
Affiliate) and acknowledge that the Agent shall not be under any obligation to
provide such information to them.  With
respect to its Loans or any Revolving Letters of Credit, Citicorp USA, Inc.
shall have the same rights and powers under this Agreement or any other
Financing Document as any other Bank Party and may exercise such rights and
powers as though it were not the Agent, and the terms “Bank” and “Banks”
include Citicorp USA, Inc. in its individual capacity.


 


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Section 7.03  Consultation with Experts.


 


The
Agent and the Collateral Agent may execute any of their respective duties under
this Agreement or any other Financing Document (including for purposes of
holding or enforcing any Lien on the Collateral (or any portion thereof)
granted under the Collateral Documents or of exercising any rights and remedies
thereunder) by or through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel, independent public accountants and other
consultants or experts concerning all matters pertaining to such duties.  Neither the Agent nor the Collateral Agent
shall be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct.


 


Section 7.04  Liability of Agent and Collateral Agent.


 


Neither
the Agent, the Collateral Agent nor any of their Affiliates nor any of their
respective directors, officers, agents or employees shall be liable for any
action taken or not taken by it in connection with this Agreement or any other
Financing Document (a) with the consent or at the request of the Required
Banks or (b) in the absence of its own gross negligence or willful
misconduct.  Neither the Agent, the
Collateral Agent nor any of their Affiliates nor any of their respective
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made by any Loan Party in connection with the Financing
Documents or any Extension of Credit hereunder, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent or the Collateral Agent under or in connection with this Agreement or any
other Financing Document; (ii) the performance or observance of any of the
covenants or agreements of any Loan Party; (iii) the perfection or
priority of any Lien or security interest created or purported to be created
under the Collateral Documents; (iv) the satisfaction of any condition
specified in Article 3, except receipt of items required to be delivered
to the Agent or (v) the validity, effectiveness, genuineness,
enforceability or sufficiency of the Financing Documents or any other
instrument or writing furnished in connection therewith.  Neither the Agent nor the Collateral Agent
shall incur any liability by acting in reliance upon any notice, consent,
certificate, statement or other writing (which may be a bank wire, telex,
facsimile transmission or similar writing) believed by it to be genuine or to
be signed by the proper party or parties.


 


Section 7.05  Indemnification.


 


Each
Bank Party shall, ratably (determined as provided below) indemnify the Agent,
the Collateral Agent, each Revolving Fronting Bank, each of their respective
Affiliates and the respective directors, officers, agents and employees of any
of them (to the extent not reimbursed by the Obligors) against any cost,
expense (including counsel fees and disbursements), claim, demand, action, loss
or liability (except such as result from such indemnitees’ gross negligence or
willful misconduct) that such indemnitees may suffer or incur in connection
with the Financing Documents or any action taken or omitted by such indemnitees
thereunder.  For purposes of this Section 7.05,
the Bank Party’s ratable share of any amount shall be determined, at any time,
according to the sum of (a) the aggregate principal amount of Loans
outstanding at such time and owing to the respective Bank Party; (b) the
aggregate Revolving 


 


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Letter of Credit Liabilities outstanding at such time
and owing to the respective Bank Party and (c) their respective Unused
Revolving Credit Loan Commitments outstanding at such time.


 


Section 7.06  Credit Decision.


 


Each
Bank Party acknowledges that it has, independently and without reliance upon
the Agent, the Collateral Agent, any Revolving Fronting Bank, or any other Bank
or any Arranger Party, and based on the financial statements referred to in Section 4.05
and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.  Each Bank Party also acknowledges that it
will, independently and without reliance upon the Agent, the Collateral Agent,
or any other Bank Party, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking any action under this Agreement.


 


Section 7.07  Successor Agent or Collateral Agent.


 


The
Agent or the Collateral Agent may resign at any time by giving notice thereof
to the Bank Parties and the Borrower. 
Upon any such resignation, the Required Banks shall have the right to appoint
a successor Agent or a successor Collateral Agent.  If no successor Agent or successor Collateral
Agent shall have been so appointed by the Required Banks, and shall have
accepted such appointment, within 30  days after the retiring Agent or
Collateral Agent gives notice of resignation, then the retiring Agent or
Collateral Agent (as the case may be), on behalf of the Bank Parties, shall
appoint a successor Agent or a successor Collateral Agent (as applicable),
which shall be a commercial bank organized or licensed under the laws of the
United States and having a combined capital and surplus of at least
$250,000,000.  Upon the acceptance of its
appointment as Agent or Collateral Agent (as the case may be) hereunder by a
successor Agent or a successor Collateral Agent, upon the execution and filing
or recording of such financing statements, or amendment, thereto, and such
other instruments or notices, as may be necessary or desirable, or as the
Required Banks may request with respect to the Security Agreement and the BVI
Cayman Pledge Agreement in order to continue the perfection of the Liens
granted or purported to be granted by the Collateral Documents, such successor
Agent or Collateral Agent (as applicable) shall thereupon succeed to and become
vested with all the rights and duties of the retiring Agent or Collateral Agent
(as the case may be), and the retiring Agent or Collateral Agent shall be
discharged from its duties and obligations hereunder.  If within 45 days after written notice is
given of the retiring Agent’s or Collateral Agent’s (as the case may be)
resignation under this Section 7.07 no successor Agent or Collateral Agent
(as the case may be) shall have been appointed and shall have accepted such
appointment, then on such 45th day (i) the retiring Agent’s or
Collateral Agent’s (as the case may be) resignation shall become effective, (ii) the
retiring Agent or Collateral Agent (as the case may be) shall thereupon be
discharged from its duties and obligations under the Financing Documents and (iii) the
Required Banks shall thereafter perform all duties of the retiring Agent or
Collateral Agent (as the case may be) until such time, if any, as the Required
Banks appoint a successor Agent or a successor Collateral Agent as provided
above.  After any retiring Agent’s or
Collateral Agent’s (as the case may be) resignation hereunder as Agent or
Collateral Agent (as the case may be) the provisions of this Article shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent or Collateral Agent (as the case may be).


 


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Section 7.08  Administrative Agent May File Proofs
of Claim.


 


In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Obligor, the Agent (irrespective of whether the
principal of any Loan or Revolving Letter of Credit Liabilities shall then be
due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:


 


(a)           to file and prove a
claim for the whole amount of the principal and interest owing and unpaid in
respect of the Loans, the Revolving Letter of Credit Liabilities and all other
Obligations that are owing and unpaid and to file such other documents as may
be necessary or advisable in order to have the claims of the Bank Parties and
the Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Bank Parties and the Agent and their
respective agents and counsel and all other amounts due the Bank Parties and
the Agent and the Collateral Agent under this Agreement) allowed in such
judicial proceeding;


 


(b)           to collect and
receive any monies or other property payable or deliverable on any such claims
and to distribute the same; and


 


(c)           any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Bank Party to make
such payments to the Agent and, in the event that the Agent shall consent to
the making of such payments directly to the Bank Parties, to pay to the Agent
any amount due for the reasonable compensation, expenses, disbursements and
advances of the Agent, the Collateral Agent and their respective agents and
counsel, and any other amounts due the Agent under this Agreement.


 


Nothing
contained herein shall be deemed to authorize the Agent to authorize or consent
to or accept or adopt on behalf of any Bank Party any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations or the rights
of any Bank Party or to authorize the Agent to vote in respect of the claim of
any Bank Party in any such proceeding.


 


Section 7.09  Agents’ Fee.


 


The
Borrower shall pay to the Agent and the Collateral Agent for their own account
fees in the amounts and at the times previously agreed upon between the
Borrower, the Agent and the Collateral Agent.


 


Section 7.10  [Intentionally Omitted].


 


Section 7.11  Delivery of Information.


 


(a)   The Borrower hereby agrees that it will provide
to the Agent all information, documents and other materials that it is
obligated to furnish to the Agent pursuant to this Agreement, including,
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statements, financial and other reports,
certificates and other information materials, but excluding any such
communication that (i) relates to a request for a new, or a conversion of
an existing, Borrowing or other Extension of Credit (including any election of
an interest rate or Interest Period relating thereto), (ii) relates to the
payment of any principal or other amount due under this Agreement prior to the
scheduled date therefor, (iii) provides notice of any default or Event of
Default under this Agreement or (iv) is required to be delivered pursuant
to Sections 3.01 or 3.02 to satisfy any condition precedent to the
effectiveness of this Agreement and/or any Borrowing or other Extension of
Credit hereunder (all such non-excluded communications being referred to herein
collectively as “Communications”),
by transmitting the Communications in an electronic/soft medium in a format
acceptable to the Agent to oploanswebadmin@citigroup.com.  In addition, the Borrower
agrees to continue to provide the Communications to the Agent in the manner
specified in this Agreement but only to the extent requested by the Agent.


 


(b)   The Borrower further agrees that the Agent
may make the Communications available to the other Bank Parties by posting the
Communications on Intralinks or a substantially similar electronic transmission
systems.  (the “Platform”).


 


                THE PLATFORM IS PROVIDED “AS
IS” AND “AS AVAILABLE”.  THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT PARTIES IN
CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM.  IN NO EVENT SHALL THE AGENT OR ANY OF ITS
AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
ADVISORS OR REPRESENTATIVES (COLLECTIVELY, “AGENT PARTIES”) HAVE ANY LIABILITY
TO THE BORROWER, ANY BANK PARTY OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF
ANY KIND, INCLUDING, WITHOUT LIMITATION, DIRECT OR INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT,
CONTRACT OR OTHERWISE) ARISING OUT OF THE BORROWER’S OR THE AGENT’S
TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE
LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A
COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT
PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.


 


(c)   The Agent agrees that the receipt of the
Communications by the Agent at its e-mail address set forth in clause (a) above
shall constitute effective delivery of the Communications to the Agent for
purposes of the Financing Documents.  Each Bank Party agrees that notice to it (as provided
in the next sentence) specifying that the Communications have been posted to
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such Bank Party
for purposes of the Financing Documents. 
Each Bank Party agrees to notify the Agent in writing (including by
electronic communication) from time to time of such Bank Party’s e-mail address
to which the foregoing notice may be sent by electronic transmission and that
the foregoing notice may be sent to such e-mail address.  Nothing herein shall prejudice the right of the Agent or any
Bank Party to give any notice or other communication pursuant to any Financing
Document in any other manner specified in such Financing Document.


 


ARTICLE
VIII



CHANGE IN CIRCUMSTANCES


 


Section 8.01  Basis for Determining Interest Rate
Inadequate or Unfair.


 


If on
or prior to the first day of any Interest Period for any Euro-Dollar Borrowing:


 


(a)           the Agent is advised
by the Reference Banks that deposits in Dollars (in the applicable amounts) are
not being offered to the Reference Banks in the relevant market for such
Interest Period, or


 


(b)           the Required Banks
advise the Agent that the Adjusted London Interbank Offered Rate as determined
by the Agent will not adequately and fairly reflect the cost to such Banks of
funding their Euro-Dollar Loans for such Interest Period, the Agent shall
forthwith give notice thereof to the Borrower and the Bank Parties, whereupon
until the Agent notifies the Borrower that the circumstances giving rise to
such suspension no longer exist, (i) the obligations of the Bank Parties
to make Euro-Dollar Loans, or to continue or convert outstanding Loans as or
into Euro-Dollar Loans, shall be suspended and (ii) each outstanding
Euro-Dollar Loan shall be converted into a Base Rate Loan on the last day of
the then current Interest Period applicable thereto.  Unless the Borrower notifies the Agent at
least two Domestic Business Days before the date of any Euro-Dollar Borrowing
for which a Notice of Borrowing has previously been given that it elects not to
borrow on such date, such Borrowing shall instead be made as a Base Rate
Borrowing.


 


Section 8.02  Illegality.


 


If, on
or after the Effective Date, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank Party (or its Euro-Dollar
Lending Office) with any request or directive (whether or not having the force
of law) of any such authority, central bank or comparable agency shall make it
unlawful or impossible for any Bank Party (or its Euro-Dollar Lending Office)
to make, maintain or fund its Euro-Dollar Loans to the Borrower and such Bank
Party shall so notify the Agent, the Agent shall forthwith give notice thereof
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until such Bank Party notifies the Borrower and the
Agent that the circumstances giving rise to such suspension no longer exist,
the obligation of such Bank Party to make Euro-Dollar Loans to the Borrower, or
to convert outstanding Loans into Euro-Dollar Loans or continue outstanding
Loans as Euro-Dollar Loans, shall be suspended. 
Before giving any notice to the Agent pursuant to this Section 8.02,
such Bank Party shall designate a different Euro-Dollar Lending Office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Bank Party, be otherwise disadvantageous to such Bank
Party.  If such notice is given, each
Euro-Dollar Loan of such Bank Party then outstanding shall be converted to a
Base Rate Loan either (a) on the last day of the then current Interest
Period applicable to such Euro-Dollar Loan if such Bank Party may lawfully
continue to maintain and fund such Loan as a Euro-Dollar Loan to such day or (b) immediately
if such Bank Party shall determine that it may not lawfully continue to
maintain and fund such Loan as a Euro-Dollar Loan to such day.  Interest and principal on any such Base Rate
Loan shall be payable on the same dates as, and on a pro rata basis with, the
interest and principal payable on the related Euro-Dollar Loans of the other
Bank Parties.


 


Section 8.03  Increased Cost and Reduced Return.


 


(a)   If on or after the Effective Date, the
adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Applicable Lending Office) or any Revolving Fronting
Bank  (any Bank (or its Applicable
Lending Office) and any Revolving Fronting Bank being referred to in this Section 8.03
as a “Credit Party”)
with any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency shall impose, modify or deem
applicable any reserve (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve System, but excluding
with respect to any Euro-Dollar Loan any such requirement included in an
applicable Euro-Dollar Reserve Percentage), special deposit, insurance assessment
or similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Credit Party or shall impose on any Credit Party or
on the London interbank market any other condition affecting its Euro-Dollar
Loans, its Note or Notes, the Revolving Letters of Credit, or its obligation to
make Euro-Dollar Loans or to issue Revolving Letters of Credit or to
participate therein and the result of any of the foregoing is to increase the
cost to such Credit Party of making or maintaining any Euro-Dollar Loan or
issuing any Revolving Letter of Credit or participating therein, or to reduce
the amount of any sum received or receivable by such Credit Party under this
Agreement or under its Note or Notes with respect thereto, by an amount deemed
by such Credit Party to be material, then, within 15 days after demand by such
Credit Party (with a copy to the Agent), the Borrower shall pay to such Credit
Party such additional amount or amounts as will compensate such Credit Party
for such increased cost or reduction.


 


(b)   If any Credit Party shall have determined
that, after the Effective Date, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change in any such law, rule or
regulation, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the 


 


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interpretation or administration thereof, or
any request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on capital of such Credit Party
(or its Parent) as a consequence of such Credit Party’s obligations hereunder
to a level below that which such Credit Party (or its Parent) could have
achieved but for such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by an amount
deemed by such Credit Party to be material, then from time to time, within 15
days after demand by such Credit Party (with a copy to the Agent), the Borrower
shall pay to such Credit Party such additional amount or amounts as will
compensate such Credit Party (or its Parent) for such reduction.


 


(c)   Each Credit Party will promptly notify the
Borrower and the Agent of any event of which it has knowledge, occurring after
the Effective Date, which will entitle such Credit Party to compensation
pursuant to this Section 8.03(c) and will designate a different
Applicable Lending Office if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the judgment of such
Credit Party, be otherwise disadvantageous to such Credit Party.  A certificate of any Credit Party claiming
compensation under this Section 8.03(c) and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error.  In
determining such amount, such Bank Party may use any reasonable averaging and
attribution methods.


 


Section 8.04  Taxes.


 


(a)   Any and all payments by the Borrower and any
other Loan Party to or for the account of any Bank Party (which for purposes of
this Section 8.04, shall include a Third Party Fronting Bank and its
Assignees), the Agent or the Collateral Agent hereunder or under any other
Financing Document shall be made free and clear of and without deduction for
any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding,
in the case of each Bank Party, the Agent and the Collateral Agent, taxes
imposed on its income (including branch profit taxes), franchise and similar
taxes and other taxes imposed on it that, in any such case, would not have been
imposed but for a material connection between such Bank Party, the Agent or the
Collateral Agent (as the case may be) and the jurisdiction imposing such taxes
(other than a material connection arising by reason of this Agreement or any
other Financing Document or the receipt of payments made hereunder or
thereunder or the exercise of any rights by a Bank Party, the Agent or the
Collateral Agent (as the case may be) hereunder or thereunder)(all such
non-excluded taxes, duties, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as “Taxes”).  If the Borrower or any other Loan Party shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any other Financing Document to any Bank Party, the Agent or
the Collateral Agent (i) the sum payable shall be increased as necessary
so that after making all required deductions (including deductions applicable
to additional sums payable under this Section 8.04) such Bank Party, the
Agent or the Collateral Agent (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made; (ii) the
Borrower shall make such deductions; (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law and (iv) the Borrower shall furnish to the
Agent, at its address referred to in 


 


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Section 10.01, the original or a
certified copy of a receipt or other satisfactory documentation evidencing
payment thereof.


 


(b)   In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes and any other excise or property
taxes, or charges or similar levies which arise from any payment made by it
hereunder or under any Note or from the execution or delivery of, or otherwise
with respect to, this Agreement or any other Financing Document (hereinafter
referred to as “Other Taxes”).


 


(c)   The Borrower agrees to indemnify each Bank
Party, the Agent and the Collateral Agent for the full amount of Taxes or Other
Taxes (including, without limitation, any Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section 8.04)
paid by such Bank Party, the Agent or the Collateral Agent (as the case may be)
and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto.  This
indemnification shall be made within 15 days from the date such Bank Party, the
Agent or the Collateral Agent (as the case may be) makes demand therefor.


 


(d)   Each Bank Party that is organized
under the laws of a jurisdiction outside the United States shall, on or prior
to the date of its execution and delivery of this Agreement in the case of a
Bank Party listed on the signature pages hereof or on or prior to the date
on which it becomes a Bank Party in the case of each other Bank Party and in
the case any Bank Party changes jurisdiction of its Applicable Lending Office
and from time to time thereafter as requested in writing by the Borrower (but
only so long thereafter as such Bank Party remains lawfully able to do so),
shall deliver to the Borrower and the Agent such certificates, documents or
other evidence, as required by the Code or Treasury Regulations issued pursuant
thereto, including Internal Revenue Service Form W-8BEN, Form W-8 IMY
or Form W-8ECI and any other certificate or statement of exemption
specified by the Borrower and required by Treasury Regulation Section 1.1441-4(a) or
Section 1.1441-6(c) or any subsequent version thereof, properly
completed and duly executed by such Bank Party establishing that any payment
under this Agreement or any other Financing Documents is (i) not subject
to withholding under the Code because such payment is effectively connected
with the conduct by such Bank Party of a trade or business in the United
States, or (ii) fully or partially exempt from United States tax under a
provision of an applicable tax treaty, or (iii) not subject to withholding
under the portfolio interest exception under Section 881(c) of the
Code (and, if such Bank Party delivers a Form W-8BEN claiming the benefits
of exemption from United States withholding tax under Section 881(c), a
certificate representing that such Bank Party is not a “bank” for purposes of Section 881(c) of
the Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of
the Code) of the Borrower and is not a controlled foreign corporation related
to the Borrower (within the meaning of Section 864(d)(4) of the
Code).  Unless the Borrower and the Agent
have received forms or other documents reasonably satisfactory to them
indicating that payments hereunder are not subject to United States withholding
tax or are subject to such tax at a rate reduced by an applicable tax treaty,
the Borrower or the Agent shall withhold taxes from such payments at the
applicable statutory rate in the case of payments to or for any Bank Party
organized under the laws of a jurisdiction outside the United States.  If a Bank Party is unable to deliver one of
these forms or if the forms provided by a Bank Party at the time such Bank
Party first becomes a party to this Agreement or at the time a Bank Party
changes its 


 


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Applicable Lending Office (other than at the
request of the Borrower) or designates a Conduit Lender that indicates a United
States interest withholding tax rate in excess of zero, withholding tax at such
rate shall be considered excluded from Taxes unless and until such Bank Party
provides the appropriate forms certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from
Taxes for periods governed by such appropriate forms; provided, however,
that (i) that should a Bank Party, which is otherwise exempt from or
subject to a reduced rate of withholding tax, becomes subject to Taxes because
of its failure to deliver a form required hereunder, the Borrower shall take
such steps as such Bank Party shall reasonably request to assist such Bank Party
to recover such Taxes and (ii) if at the effective date of a transfer
pursuant to which a Bank Party becomes a party to this Agreement, the Bank
Party assignor was entitled to payments under Section 8.04(a) in
respect of United States withholding tax with respect to interest paid at such
date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes) United States withholding tax, if any, applicable with
respect to the Bank Party assignee on such date.


 


(e)   If the Borrower is required to pay additional
amounts to or for the account of any Bank Party pursuant to this Section 8.04,
then such Bank Party shall use reasonable effort (consistent with internal
policy and regulatory restrictions) to change the jurisdiction of its
Applicable Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the judgment of such
Bank Party, is not otherwise disadvantageous to such Bank Party.


 


(f)    Each Bank Party, the Agent and the
Collateral Agent agrees that it will promptly (within 30 days) after receiving
notice thereof from any taxing authority, notify the Borrower of the assertion
of any liability by such taxing authority with respect to Taxes or Other Taxes;
provided that the failure to give
such notice shall not relieve the Borrower of its obligations under this Section 8.04
except to the extent that the
Borrower has been prejudiced by such failure and except that the Borrower shall
not be liable for penalties, interest or expenses accruing after such 30 day
period until such time as it receives the notice contemplated above, after
which time it shall be liable for interest, penalties and expenses accruing
after such receipt.


 


(g)   If any Bank Party, the Agent or the
Collateral Agent shall receive a credit or refund from a taxing authority (as a
result of any error in the imposition of Taxes or Other Taxes by such taxing
authority) with respect to and actually resulting from an amount of such Taxes
or Other Taxes paid by the Borrower pursuant to subsection (a) or (c) above,
such Bank Party, the Agent or the Collateral Agent shall promptly pay to the
Borrower the amount so received (without interest thereon, whether or not
received).


 


(h)   Without prejudice to the survival of any
other agreement contained herein, the agreements, covenants and obligations
contained in this Section 8.04 shall survive the payment in full of the
principal of and interest on all Loans, Notes and other advances made
hereunder.


 


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Section 8.05  Base Rate Loans Substituted for Affected
Euro-Dollar Loans.


 


If (a) the
obligation of any Bank Party to make, or to continue or to convert outstanding
Loans as or to, Euro-Dollar Loans to the Borrower has been suspended pursuant
to Section 8.02 or (b) any Bank Party has demanded compensation under
Section 8.03 or 8.04 with respect to its Euro-Dollar Loans to the Borrower
shall, by at least five Euro-Dollar Business Days’ prior notice to such Bank
Party through the Agent, have elected that the provisions of this Section 8.05
shall apply to such Bank Party, then, unless and until such Bank Party notifies
the Borrower that the circumstances giving rise to such suspension or demand
for compensation no longer exist, all Loans to the Borrower which would
otherwise be made by such Bank Party as (or continued or converted to)
Euro-Dollar Loans shall be made instead as Base Rate Loans (on which interest
and principal shall be payable contemporaneously with the related Euro-Dollar
Loans of the other Bank Parties).  If
such Bank Party notifies the Borrower that the circumstances giving rise to
such suspension or demand for compensation no longer exist, the principal
amount of each such Base Rate Loan shall be converted into a Euro-Dollar Loan
on the first day of the next succeeding Interest Period applicable to the
related Euro-Dollar Loans of the other Bank Parties.


 


ARTICLE
IX



SUBSIDIARY GUARANTY


 


Section 9.01  The Subsidiary Guaranty.


 


Subject
in each case to the provisions of Section 9.08, each of the Subsidiary
Guarantors hereby, jointly and severally, unconditionally guarantees as primary
obligor and not merely as surety, the full and punctual payment as and when the
same shall become due and payable (whether at stated maturity, upon
acceleration or otherwise) of the principal and interest on each Revolving
Credit Loan Note and Term Loan Note issued by the Borrower under this
Agreement, the full and punctual payment of each Reimbursement Obligation in
respect of the Revolving Letters of Credit under this Agreement and the full
and punctual payment of all amounts payable by the Borrower  under
this Agreement in respect of the Revolving Credit Loan Facility and the Term
Loans (the “Revolving Credit Loan/Term Loan
Obligations”) (the guaranty referred to above is referred to as the “Subsidiary Guaranty”).  Upon failure by the Borrower to pay
punctually any such amount, the Subsidiary Guarantors shall forthwith on demand
pay the amount not so paid at the place and in the manner specified in the
Agreement.  The Revolving Credit
Loan/Term Loan Obligations of the Borrower guaranteed by the Subsidiary
Guarantors are referred to as the “Guaranteed
Obligations”.  Without
limiting the generality of the foregoing, each Subsidiary Guarantor’s liability
hereunder shall extend to all amounts which constitute part of the obligations
guaranteed by it hereunder and would be owed by the Borrower hereunder but for
the fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Borrower.


 


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Section 9.02  Guaranty Absolute.


 


Each
Subsidiary Guarantor, jointly and severally guarantees that, subject to Section 9.08,
the Guaranteed Obligations will be paid strictly in accordance with the terms
of this Agreement, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of the
Banks and the Agent with respect thereto. 
The respective obligations of each of the Subsidiary Guarantors under
the Subsidiary Guaranty are independent of the Revolving Credit Loan/Term Loan
Obligations.  The obligations of each
Subsidiary Guarantor hereunder shall be unconditional and absolute and, without
limiting the generality of the foregoing, shall not be released, discharged or
otherwise affected by:


 


(i)            any extension,
renewal, settlement, compromise, waiver or release in respect of any Obligation
of any other Loan Party under any Financing Document, by operation of law or
otherwise;


 


(ii)           any lack of
validity or enforceability of any Financing Document or any other agreement or
instrument relating thereto;


 


(iii)          any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Guaranteed Obligations or any other obligations of the Borrower under the
Financing Documents, or any other amendment or waiver of or any consent to
departure from any Financing Document, including, without limitation, any
increase in the Guaranteed Obligations resulting from the extension of
additional credit to the Borrower or otherwise;


 


(iv)          any taking,
exchange, release, impairment, invalidity or nonperfection of any Collateral;


 


(v)           any manner of
application of the Collateral or proceeds thereof, to all or any of the
Guaranteed Obligations, or any manner of sale or other disposition of any
Collateral for all or any of the Guaranteed Obligations or any other
Obligations of the Loan Parties under the Financing Documents, or any other
property or assets of the Loan Parties or any of their Subsidiaries;


 


(vi)          any failure by the
Agent, the Collateral Agent or any other Lender Party to disclose to any Loan
Party any information relating to the financial condition, operations,
properties or prospects of any other Loan Party now or hereafter known to the
Agent, the Collateral Agent or such Lender Party, as the case may be (such
Subsidiary Guarantor waiving any duty on the part of the Agent, the Collateral
Agent or the Lender Parties to disclose such information);


 


(vii)         any change in the
corporate existence, structure or ownership of any Loan Party, or any
insolvency, bankruptcy, reorganization or other similar proceeding affecting
any other Loan Party or its assets or any resulting release or discharge of any
obligation of any other Loan Party contained in any Financing Document;


 


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(viii)        the existence of any
claim, set-off or other rights which such Subsidiary Guarantor may have at any
time against any other Loan Party, the Agent, the Collateral Agent, any Bank
Party or any other Person, whether in connection herewith or with any unrelated
transactions; provided that
nothing herein shall prevent the assertion of any such claim by separate suit
or compulsory counterclaim;


 


(ix)           any invalidity or
unenforceability relating to or against any other Loan Party for any reason of
any Financing Document, or any provision of applicable law or regulation
purporting to prohibit the payment by any other Obligor of the principal of or
interest on any Note or any other amount payable by it under any Financing
Document; or


 


(x)            any other act or
omission to act or delay of any kind by any Obligor, the Agent, the Collateral
Agent, any Bank Party or any other Person or any other circumstance whatsoever
which might, but for the provisions of this paragraph, constitute a legal or
equitable discharge of or defense to a Subsidiary Guarantor’s obligations
hereunder.


 


Section 9.03  Discharge Only Upon Payment in Full,
Reinstatement in Certain Circumstances.


 


Each
Subsidiary Guarantor’s obligations hereunder shall remain in full force and
effect until the Revolving Credit Loan/Term Loan Obligations have been paid in
full and the Revolving Credit Loan Commitments have been terminated.  If at any time the payment of principal of or
interest on any Note or any other amount payable by the Borrower, in respect of
the Revolving Credit Loan Facility and the Term Loans under any Financing
Document is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of the Borrower or otherwise, the
applicable Subsidiary Guarantor’s obligations hereunder with respect to such
payment shall be reinstated at such time as though such payment had been due
but not made at such time.


 


Section 9.04  Revolving L/C Cash Collateral Account.


 


(a)   Each Subsidiary Guarantor further agrees that
if the Borrower shall fail to deposit in the Revolving L/C Cash Collateral
Account any amount required to be deposited therein pursuant to this Agreement,
the Subsidiary Guarantors shall deposit such amount in a subaccount of the
Revolving L/C Cash Collateral Account as collateral security for each
Subsidiary Guarantor’s potential obligations hereunder.  If the Subsidiary Guarantors shall fail to
furnish such funds, the Agent shall be authorized to debit any accounts the
Subsidiary Guarantors maintain with the Agent in such amount.  Cash deposited in such subaccount of the
Revolving L/C Cash Collateral Account pursuant to this Section 9.04 shall
be returned to the Subsidiary Guarantors depositing the same to the extent that
funds deposited by the Borrower in the Revolving L/C Cash Collateral Account
would have been required to be returned to the Borrower.


 


(b)   Each Subsidiary Guarantor hereby pledges and
grants to the Agent, for the benefit of the Banks and the Agent, a continuing
lien on and security interest in all right, title 


 


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and interest of such Subsidiary Guarantor
with respect to any funds held in the Revolving L/C Cash Collateral Account
from time to time, and all proceeds thereof, as security for the payment of the
Guaranteed Obligations.


 


(c)   The Agent may, at any time or from time to
time after the funds are deposited in the Revolving L/C Cash Collateral
Account, apply funds then held in the Revolving L/C Cash Collateral Account to
the payment of any of the Guaranteed Obligations.


 


(d)   Neither the Subsidiary Guarantors nor any
person or entity claiming on behalf of or through the Subsidiary Guarantors
shall have any right to withdraw any of the funds held in the Revolving L/C Cash
Collateral Account.


 


(e)   Each Subsidiary Guarantor agrees that it will
not (i) sell or otherwise dispose of any interest in the Revolving L/C
Cash Collateral Account or any funds held therein or (ii) create or permit
to exist any lien, security interest or other charge or encumbrance upon or
with respect to the Revolving L/C Cash Collateral Account or any funds held
therein, except as contemplated by the terms of this Section 9.04.


 


Section 9.05  Waiver by the Subsidiary Guarantors.


 


Each
Subsidiary Guarantor irrevocably waives promptness, diligence, notice of
acceptance, presentment, protest and any other notice with respect to any of
its Guaranteed Obligations and this Subsidiary Guaranty and waives any
requirement that the Agent, the Collateral Agent or any Bank Party protect,
secure, perfect or insure any security interest or Lien on the Collateral or
exhaust any action against the Borrower or any other Person or entity or any
Collateral.


 


Section 9.06  Subrogation.


 


Upon
making any payment with respect to the Borrower under this Article 9, the
applicable Subsidiary Guarantor shall be subrogated to the rights of the payee
against the Borrower with respect to such payment; provided that no Subsidiary Guarantor shall enforce any
payment by way of subrogation until all amounts of principal of and interest on
the Notes and all other amounts payable by the Borrower under any Financing
Document shall have been paid in full.


 


Section 9.07  Stay of Acceleration.


 


In the
event that acceleration of the time for payment of any amount payable by the
Borrower under any Financing Document is stayed upon insolvency, bankruptcy or
reorganization of the Borrower, all such amounts otherwise subject to
acceleration under the terms of this Agreement shall nonetheless be payable by
the applicable Subsidiary Guarantor hereunder forthwith on demand by the Agent
made at the request of the requisite proportion of the Bank Parties specified
in Article 6 of this Agreement.


 


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Section 9.08  Limitation of Liability.


 


The
obligations of each Subsidiary Guarantor under this Article 9 shall be
limited to an aggregate amount equal to the largest amount that would not
render its obligations under this Article 9 subject to avoidance under Section 548
of the Bankruptcy Code or any comparable provisions of any applicable state law
(including, without limitation, the provisions of the Uniform Fraudulent
Transfer Act and the Uniform Fraudulent Conveyance Act, to the extent
incorporated in applicable state law).


 


Section 9.09  Release of Subsidiary Guarantors.


 


Upon
any Asset Sale of all of the Capital Stock of a Subsidiary Guarantor in
accordance with the terms of the Financing Documents and the application of the
Net Cash Proceeds from such Asset Sale to prepay the Debt hereunder pursuant to
and in the amount and order of priority set forth in Section 2.10(b), such
Subsidiary Guarantor shall be released from all of its Obligations under this Article 9
and shall not be a “Subsidiary Guarantor” for any purpose under the Financing
Documents.


 


Section 9.10  Representations and Warranties.


 


Each Subsidiary Guarantor, as to itself, hereby makes the
representations and warranties set forth in Section 4.01, 4.02(a) and
4.04.


 


Section 9.11  Covenants.


 


Each Subsidiary Guarantor hereby agrees to comply with the covenant set
forth in Section 5.09(b).


 


ARTICLE
X



MISCELLANEOUS


 


Section 10.01  Notices.


 


All
notices, requests and other communications to any party hereunder shall be in
writing (including bank wire, telex, facsimile transmission or similar writing)
and shall be given to such party:  (a) in
the case of the Borrower, any Revolving Fronting Bank, the Agent or the
Collateral Agent, at its address or telex or facsimile transmission number set
forth on the signature pages hereof; (b) in the case of any Bank, at
its address or telex or facsimile transmission number set forth in its
Administrative Questionnaire or (c) in the case of any other party, at
such other address or telex or facsimile transmission number as such party may
hereafter specify for the purpose by notice to the Agent, the Collateral Agent,
the Revolving Fronting Banks and the Borrower. 
Each such notice, request or other communication shall be effective (x) if
given by telex, when such telex is transmitted to the telex number specified in
or pursuant to this Section 10.01 and the appropriate answerback is
received; (y) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid, addressed as aforesaid
or (z) if given by any other means, when delivered at the address
specified 


 


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in or pursuant to this Section 10.01; provided that notices to the Agent, the
Collateral Agent or a Revolving Fronting Bank under Article 2 or Article 8
shall not be effective until received.


 


Section 10.02  No Waivers.


 


No
failure or delay by the Agent, the Collateral Agent or any Bank Party in
exercising any right, power or privilege hereunder or under any other Financing
Document shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. 
The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.


 


Section 10.03  Expenses; Indemnification.


 


(a)   The Borrower shall pay (i) all out-of-pocket
expenses of the Agent and the Collateral Agent, including, without limitation, (A) reasonable
fees and disbursements of outside counsel for the Agent and the Collateral
Agent in connection with the preparation and administration of this Agreement
and the other Financing Documents, any waiver or consent hereunder or any
amendment hereof or any Default or alleged Default hereunder, (B) the
reasonable fees and disbursements of the Collateral Trustees and their outside
counsel and (ii) if an Event of Default occurs, all out-of-pocket expenses
incurred by the Agent, the Collateral Agent, each Revolving Fronting Bank and
each Bank, including (without duplication) the fees and disbursements of
outside counsel and the allocated cost of inside counsel, in connection with
such Event of Default and collection, bankruptcy, insolvency, workout,
restructuring and other enforcement proceedings resulting therefrom.


 


(b)   The Borrower agrees to indemnify the Agent,
the Collateral Agent and each Bank Party, their respective Affiliates and the
respective directors, officers, agents and employees of the foregoing (each, an
“Indemnitee”)
and hold each Indemnitee harmless from and against any and all liabilities,
losses, damages, costs and expenses of any kind, including, without limitation,
the reasonable fees and disbursements of counsel, which may be incurred by such
Indemnitee in connection with any investigative, administrative or judicial
proceeding (whether or not such Indemnitee shall be designated a party thereto)
brought or threatened relating to or arising out of the Financing Documents or
any actual or proposed use of proceeds of Loans or the issuance or deemed
issuance of any Revolving Letter of Credit hereunder; provided that no Indemnitee shall have the
right to be indemnified hereunder for such Indemnitee’s own gross negligence or
willful misconduct as determined by a court of competent jurisdiction.


 


Section 10.04  Sharing of Set-offs.


 


Each Bank Party agrees that if it shall, by exercising any right of
set-off or counterclaim or otherwise (including, without limitation, through
the application of any proceeds of the Creditor Group Collateral and the Excess
Revolving L/C Collateral, receive payment of a proportion of the aggregate
amount due and payable to such Bank Party hereunder which is greater than the
proportion received by any other Bank Party (A) on account of Obligations
due and payable to such Bank Party hereunder and under the Notes at such time
in excess of its 


 


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ratable share (according to the proportion of (i) the
amount of such Obligations due and payable to such Bank Party at such time to (ii) the
aggregate amount of Obligations due and payable to all Bank Parties hereunder
and under the Notes at such time) of payments on account of the Obligations due
and payable to all the Bank Parties hereunder and under the Notes at such time
obtained by all the Bank Parties at such time or (B) on account of Obligations
owing (but not due and payable) to such Bank Party hereunder and under the
Notes at such time in excess of its ratable share (according to the proportion
of (i) the amount of such Obligations owing (but not due and payable) to
such Bank Party at such time to (ii) the aggregate amount of Obligations
owing (but not due and payable) to all Bank Parties hereunder and under the
Notes at such time) of payments on account of the Obligations owing (but not
due and payable) to all Bank Parties hereunder and under the Notes at such time
obtained by all of the Bank Parties at such time, such Bank Party shall
forthwith purchase from the other Bank Parties such participations in the
Obligations due and payable or owing to them, as the case may be, as shall be
necessary to cause such purchasing Bank Party to share the excess payment
ratably with each of them; provided
that nothing in this Section 10.04 shall impair the right of any Bank
Party to exercise any right of set-off or counterclaim it may have and to apply
the amount subject to such exercise to the payment of indebtedness of the
Borrower owing to it.  The Borrower
agrees, to the fullest extent it may effectively do so under applicable law,
that any holder of a participation in a Note or in any Revolving Letter of
Credit Liability, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim and other rights
with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrower in the amount of such
participation.


 


Section 10.05  Amendments and Waivers.


 


Any
provision of this Agreement or any other Financing Document may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed by
the Borrower and the Required Banks (and, if the rights or duties of the Agent
or the Collateral Agent are affected thereby, by the Agent or the Collateral
Agent); provided that (a) no
such amendment or waiver shall, unless signed by all the Bank Parties, (i) waive
any of the conditions specified in Section 3.01 or 3.02 (with respect to
the Extensions of Credit made or deemed to be made on the Closing Date); (ii) change
the number of Bank Parties or the percentage of (x) the Unused Revolving
Credit Loan Commitments, (y) the aggregate unpaid principal amount of the
Loans or (z) the aggregate Revolving Letter of Credit Liabilities that, in
each case, shall be required for the Bank Parties or any of them to take any
action hereunder; (iii) release all or substantially all of the Collateral
in any transaction or series of related transactions; or (iv) amend Section 10.04
or this Section 10.05, (b) no such amendment or waiver shall, unless
signed by the Required Banks and each Bank Party if such Bank Party is directly
adversely affected by such amendment or waiver, (i) in the case of any
Revolving Credit Loan Bank, increase the Revolving Credit Loan Commitment of
such Revolving Credit Loan Bank; (ii) reduce the principal of, or interest
on, the Notes held by such Bank Party or Loans outstanding to such Bank Party
or any fees or other amounts payable to such Bank Party; (iii) reduce or
limit the Obligations of any Subsidiary Guarantor under Article 9 or
release any Subsidiary Guarantor (other than in connection with a sale or
disposition permitted hereunder) or otherwise limit such Subsidiary Guarantor’s
liability with respect to the Obligations owing to the Agent, the Collateral
Agent and the Bank Parties, (iv) reduce the principal of or rate of
interest on any Loan or Reimbursement Obligation or any fees hereunder, (v) change
(x) the order of application in 


 


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the prepayment of Loans among the Facilities or any
reduction in the Revolving Credit Loan Commitments from the application thereof
set forth in the applicable provisions of Sections 2.09 and 2.10 in any manner
that materially affects the Bank Parties under such Facilities or (y) the
right of any Bank Party to pro rata
sharing of payments pursuant to the terms hereof (except as otherwise
specifically provided in clause (d)(i) below), (vi) postpone the date
fixed for any payment of principal of or interest on any Loan or Reimbursement
Obligation or any fees hereunder or (vii) postpone the final maturity of
the Loans, (c) no such amendment or waiver shall, unless signed by the
Required Revolving Credit Loan Banks, amend, waive or delete the provisions of Section 3.02(d) or
Section 3.02(e) and (d) no such amendment or waiver shall,
unless signed by the Supermajority Banks (i) change the pro rata application of Net Cash Proceeds
from Asset Sales among the Bank Parties, on the one hand, and the other
Financing Parties, on the other hand, set forth in Section 2.10(b)(i) by
amending the definition of “Banks’ Ratable Share” or otherwise or (ii) amend
the definition of “Secured Holders” or “Secured Obligations” in the Collateral
Trust Agreement or amend Sections 5.01, 8.01, 8.02 or 9.01 of the Collateral
Trust Agreement; provided  further that no such amendment or waiver
shall, unless signed by the Revolving Fronting Banks affect the rights and
obligations of the Revolving Fronting Banks under this Agreement and provided further that no such amendment or
waiver shall (x) release all or substantially all of the Creditor Group
Collateral or (y) change the pro rata
application of Net Cash Proceeds from Asset Sales among the Financing Parties
set forth in Section 2.10(b)(i) by amending the definition of “Banks’
Ratable Share” or otherwise unless the Agent shall have received evidence
satisfactory to it from the trustee under the Senior Secured Exchange Note
Indenture that it has received the consent of those Exchange Note Holders
holding a majority of the principal outstanding amount of the Senior Secured
Exchange Notes.


 


Notwithstanding
anything of the foregoing, no amendment or waiver shall be required to release
any Subsidiary Guarantor which is sold pursuant to the terms and conditions of
the Financing Documents so long as the Borrower shall, on the date of receipt
by the Borrower of the Net Cash Proceeds from such sale, prepay the Loans
pursuant to, and in the order of priority set forth in Section 2.10(b), as
specified therein.


 


Section 10.06  Successors and Assigns.


 


(a)   The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except neither the Borrower nor any
Subsidiary Guarantor may assign or otherwise transfer any of its rights and obligations
under this Agreement without the prior written consent of all of the Bank
Parties (other than in the case of Subsidiary Guarantors in connection with any
transaction permitted by the Financing Documents).


 


(b)   Any Bank other than a Conduit Lender may,
without notice to or consent of the Borrower and Agent, at any time grant to
one or more banks or other institutions (each, a “Participant”) participating interests in its
Unused Revolving Credit Loan Commitment or any or all of its Loans or participating
interests in its Revolving Letter of Credit Liabilities.  In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower, the Revolving Fronting Banks and the Agent, such Bank shall remain
responsible for the performance of its obligations hereunder, and the Borrower,
the Revolving Fronting Banks and the Agent shall continue to deal solely and
directly with 


 


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Restated Credit Agreement


 


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such Bank in connection with such Bank’s
rights and obligations under this Agreement. 
Any agreement pursuant to which any Bank may grant such a participating
interest shall provide that such Bank shall retain the sole right and responsibility
to enforce the obligations of the Borrower hereunder including, without
limitation, the right to approve any amendment, modification or waiver of any
provision of this Agreement or any other Financing Document; provided that such participation agreement
may provide that such Bank will not agree to any modification, amendment or
waiver of this Agreement described in clauses (a) (i), (iv) through (vi) and
clause (b) of Section 10.05 without the consent of the
Participant.  The Borrower agrees that
each Participant shall, to the extent provided in its participation agreement,
be entitled to the benefits of Article 8 with respect to its participating
interest.  An assignment or other
transfer which is not permitted by subsection (c) or (d) below shall
be given effect for purposes of this Agreement only to the extent of a
participating interest granted in accordance with this subsection (b).


 


(c)   Any Bank Party other than a Conduit Lender
may at any time assign to one or more banks or other institutions (each, an “Assignee”) all, or a proportionate part
of all, in each case in an amount not less than $1,000,000 (or such lesser
amount as may be agreed to by the Borrower and the Agent) (except in the case
of an assignment which will result in a group of Banks which are managed by the
same Bank Party holding a Revolving Credit Loan Commitment or Term Loan
Commitment (as the case may be) of not less than $1,000,000), of its rights and
obligations under this Agreement and the other Financing Documents, and such
Assignee shall assume such rights and obligations, pursuant to an Assignment
and Assumption in substantially the form of Exhibit C-1 or Exhibit C-2
hereto, as the case may be, executed by such Assignee and such transferor Bank
Party, with (and subject to) the subscribed consent of the Agent, the Borrower
(which shall not be unreasonably withheld or delayed but which shall not
be required if (1) an Event of Default shall have occurred and is
continuing, (2) in the case of assignments with respect to any Term Loan
Facility, (3) in the case of assignments by a Bank Party to a Related Fund
of such Bank Party and (4) in the case of assignments with respect to the
Revolving Credit Loan Facility, if the proposed Assignee has a senior unsecured
debt rating of “BBB” or higher by Standard & Poor’s Rating Services or
“Baa2” or higher by Moody’s Investor Service, Inc.), and, in the case of
assignments with respect to the Revolving Credit Loan Facility, each Revolving
Fronting Bank (such consent not to be unreasonably withheld or delayed); provided that if an Assignee is an
Affiliate of such transferor Bank Party, no such consents shall be required;
and provided, further that under no circumstances may
the Borrower or any of its Affiliates be an “Assignee” hereunder.  Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Bank Party of an
amount equal to the purchase price agreed between such transferor Bank Party
and such Assignee, such Assignee shall be a Bank Party party to this Agreement
and shall have all the rights and obligations of a Bank Party as set forth in
such instrument of assumption, and the transferor Bank Party shall be released
from its obligations hereunder to a corresponding extent, and no further
consent or action by any party shall be required.  Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Bank Party, the Agent and
the Borrower shall make appropriate arrangements so that, if required, new
Notes are issued to the Assignee.  In
connection with any such assignment, the transferor Bank Party or Assignee
shall pay to the Agent an administrative fee for processing such assignment in
the amount of $3,500.  If the Assignee is
not incorporated under the laws of the United States of America or 


 


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Restated Credit Agreement


 


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a state thereof, it shall deliver to the
Borrower and the Agent certification as to exemption from, or reduction in,
deduction or withholding of any United States federal income taxes as required
by Section 8.04.  Notwithstanding
the foregoing, any Conduit Lender may assign at any time to its designating
Bank hereunder without the consent of the Borrower or the Agent any or all of
the Loans it may have funded hereunder and pursuant to its designation
agreement and without regard to the limitations set forth in the first sentence
of this Section 10.06(c).


 


(d)   Any Bank Party may at any time assign all or
any portion of its rights under this Agreement and the other Financing
Documents to a Federal Reserve Bank.  No
such assignment shall release the transferor Bank Party from its obligations
hereunder.  In the case of any Bank Party
that is a fund that invests in bank loans, such Bank Party may, without the
consent of the Borrower or the Agent, assign or pledge all or any portion of
its rights under this Agreement, including the Loans and Notes or any other
instrument evidencing its rights as a Bank Party under this Agreement, to any
holder of, trustee for, or any other representative of holders of, obligations
owed or securities issued, by such fund, as security for such obligations or
securities; provided that
unless and until such holder, trustee or representative actually becomes a Bank
Party in compliance with the other provisions of this Section 10.06, (i) no
such pledge shall release the pledging Bank Party from any of its obligations
under the Financing Documents and (ii) such holder, trustee or
representative shall not be entitled to exercise any of the rights of a Bank
Party under the Financing Documents even though such trustee may have acquired
ownership rights with respect to the pledged interest through foreclosure or
otherwise.


 


(e)   Each of the Borrower, the Agent and each Bank
hereby confirms that it will not institute against a Conduit Lender or join any
other Person in instituting against a Conduit Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding under any
state bankruptcy or similar law, for one year and one day after the payment in
full of the latest maturing commercial paper note issued by such Conduit
Lender; provided, however, that each Bank designating any
Conduit Lender hereby agrees to indemnify, save and hold harmless each other
party hereto for any loss, cost, damage or expense arising out of its inability
to institute such a proceeding against such Conduit Lender during such period
of forbearance.


 


(f)    The Agent shall maintain at its address
referred to in Section 10.01, a copy of each Assignment and Assumption
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Bank Parties, the Revolving Credit Loan Commitments of,
the amount of the Revolving Letter of Credit issued by, the principal amount of
the Reimbursement Obligations owing to, and the principal amount of the Loans
owing to, each Bank Party from time to time (the “Register”).  The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Bank Parties may treat each Person whose name is
recorded in the Register as a Bank Party hereunder for all purposes of this
Agreement.  The Register shall be
available for inspection by the Borrower or any Bank Party at any reasonable
time and from time to time upon reasonable prior notice.


 


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Restated Credit Agreement


 


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(g)   Any Third Party Fronting Bank may at any time
assign to one or more banks or other institutions (each, an “Assignee”) meeting the definition of a “Third
Party Fronting Bank” contained herein, all of its rights and obligations under
this Agreement and the other Financing Documents, and such Assignee shall
assume such rights and obligations, pursuant to an Assignment and Assumption in
substantially the form of Exhibit C-3 hereto executed by such Assignee and
such transferor Third Party Fronting Bank, with (and subject to) the subscribed
consent of the Agent and the Borrower (which shall not be unreasonably withheld
or delayed); provided that under
no circumstances may the Borrower or any of its Affiliates be an “Assignee”
hereunder.  Upon execution and delivery
of such instrument and a Revolving Fronting Bank Agreement and payment by such
Assignee to such transferor Third Party Fronting Bank of an amount equal to the
purchase price agreed between such transferor Third Party Fronting Bank and
such Assignee, such Assignee shall be a Revolving Fronting Bank party to this
Agreement and shall have all the rights and obligations of a Revolving Fronting
Bank as set forth in such instrument of assumption, and the transferor Third
Party Fronting Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall be
required.  In connection with any such
assignment, the transferor Third Party Fronting Bank or Assignee shall pay to
the Agent an administrative fee for processing such assignment in the amount of
$3,500.  If the Assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall deliver to the Borrower and the Agent certification as to exemption
from, or reduction in, deduction or withholding of any United States federal
income taxes as required by Section 8.04.


 


Section 10.07  No Margin Stock.


 


Each
of the Bank Parties represents to the Agent and each of the other Bank Parties
that it in good faith is not relying upon any “margin stock” (as defined in
Regulation U) as collateral in the extension or maintenance of the credit
provided for in this Agreement.


 


Section 10.08  Governing Law; Submission to Jurisdiction.


 


This
Agreement and the other Financing Documents shall be governed by and construed
in accordance with the laws of the State of New York.  The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Agreement and the other Financing Documents or the transactions contemplated
hereby.  The Borrower irrevocably waives,
to the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.


 


Section 10.09  Release of Collateral.


 


Upon
the sale, lease, transfer or other disposition of any item of Collateral of any
Obligor (including, without limitation, as result of the sale, in accordance
with the terms of the Financing Documents, of any Obligor that owns such Collateral)
in accordance with the terms of the Financing Documents, the Agent will, at the
Borrower’s expense, execute and deliver to such 


 


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Restated Credit Agreement


 


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Obligor such documents as such Obligor may reasonably
request to evidence the release of such item of Collateral from the assignment
and security interest granted under the Collateral Documents in accordance with
the terms of the Financing Documents.


 


Section 10.10  Counterparts; Integration; Effectiveness.


 


This
Agreement may be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto were
upon the same instrument.  This Agreement
and the other Financing Documents constitute the entire agreement and
understanding among the parties hereto and supersede any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof.  This Agreement shall become effective
upon the Amendment and Restatement Effective Date.


 


Section 10.11  Confidentiality.


 


The
Agent and each Bank Party agrees to keep confidential all non-public
information provided to it by the Borrower pursuant to this Agreement that is
designated by the Borrower as confidential; provided
that nothing herein shall prevent the Agent or any Bank Party from disclosing
any such information (a) to the Agent, any other Bank Party or any
affiliate of any Bank Party; (b) to any (i) actual or prospective
transferee or (ii) Derivatives Obligations counterparty (or such
contractual counterparty’s professional advisor), in each case that agrees to
comply with the provisions of this Section 10.11; (c) to its
employees, directors, agents, attorneys, accountants and other professional
advisors or those of any of its affiliates; (d) upon the request or demand
of any governmental authority; (e) in response to any order of any court
or other governmental authority or as may otherwise be required pursuant to any
requirement of law; (f) if required to do so in connection with any
litigation or similar proceeding; (g) that has been publicly disclosed; (h) to
the National Association of Insurance Commissioners or any similar organization
or any nationally recognized rating agency that requires access to information
about a Bank Party’s investment portfolio in connection with ratings issued
with respect to such Bank Party; (i) to any direct or indirect contractual
counterparty in any swap, hedge or similar agreement (or to any such
contractual counterparty’s professional advisor), so long as such contractual
counterparty (or such professional advisor) agrees to be bound by the
provisions of this Section 10.11; or, in connection with the exercise of
any remedy hereunder or under any other Financing Documents.  Notwithstanding any other provision in this
Agreement, the Borrower, the Agent, each Third Party Fronting Bank and each
Bank Party hereby agree that each of the Borrower, the Agent, each Third Party
Fronting Bank and each Bank Party (and each of the officers, directors,
employees, accountants, attorneys and other advisors of the Agent, each Third
Party Fronting Bank and each Bank Party) may disclose to any and all persons,
without limitation of any kind, the U.S. tax treatment and U.S. tax structure
of the transaction and all materials of any kind (including opinions and other
tax analyses) that are provided to each of them 
relating to such U.S. tax treatment and U.S. tax structure.


 


Section 10.12  WAIVER OF JURY TRIAL.


 


EACH
OF THE BORROWER, THE AGENT, THE COLLATERAL AGENT AND THE BANK PARTIES HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING 


 


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TO THIS AGREEMENT OR THE OTHER FINANCING DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.


 


Section 10.13  Severability; Modification to Conform to
Law.


 


It is
the intention of the parties that this Agreement be enforceable to the fullest
extent permissible under applicable law, but that the unenforceability (or
modification to conform to such law) of any provision or provisions hereof
shall not render unenforceable, or impair, the remainder hereof.  If any provision of this Agreement shall be
held invalid or unenforceable in whole or in part in any jurisdiction, this
Agreement shall, as to such jurisdiction, be deemed amended to modify or
delete, as necessary, the offending provision or provisions and to alter the
bounds thereof in order to render it or them valid and enforceable to the
maximum extent permitted by applicable law, without in any manner affecting the
validity or enforceability of such provision or provisions in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.


 


Section 10.14  Judgment Currency.


 


If for
the purposes of enforcing the obligations of the Borrower hereunder it is
necessary to convert a sum due from such Person in Dollars into another
currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent, the Collateral Agent and
the Bank Parties could purchase Dollars with such currency at or about 11:00 A.M.
(New York City time) on the Domestic Business Day preceding that on which final
judgment is given.  The obligations in
respect of any sum due to the Agent, the Collateral Agent and the Bank Parties
hereunder shall, notwithstanding any adjudication expressed in a currency other
than Dollars, be discharged only to the extent that on the Domestic Business
Day following receipt by the Agent, the Collateral Agent and the Bank Parties
of any sum adjudged to be so due in such other currency the Agent, the
Collateral Agent and the Bank Parties may in accordance with normal banking
procedures purchase Dollars with such other currency; if the amount of Dollars
so purchased is less than the sum originally due to the Agent, the Collateral
Agent and the Bank Parties in Dollars, the Borrower agrees, to the fullest
extent that it may effectively do so, as a separate obligation and
notwithstanding any such adjudication, to indemnify the Agent, the Collateral
Agent and the Bank Parties against such loss, and if the amount of Dollars so
purchased exceeds the sum originally due to the Agent, the Collateral Agent and
the Bank Parties, it shall remit such excess to the Borrower.


 


Section 10.15  Revolving Fronting Banks.


 


(a)   Each (i) Third Party Fronting Bank or (ii) Revolving
Credit Loan Bank who after the Effective Date agrees to become a Revolving
Fronting Bank hereunder, shall execute and deliver to the Agent a Revolving
Fronting Bank Agreement in substantially the form of Exhibit D hereto
prior to issuing any letters of credit at the request or for the benefit of the
Borrower.  Upon execution and delivery by
a Third Party Fronting Bank or such Revolving Credit Loan Bank to the Agent of
a Revolving Fronting Bank Agreement, such Third Party Fronting Bank or such
Revolving Credit Loan Bank, as the case may be, shall become a party to this
Agreement and shall have all the rights and obligations of a Revolving 


 


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Restated Credit Agreement


 


117

















 


Fronting Bank as set forth herein.  If the Third Party Fronting Bank or such
Revolving Credit Loan Bank is not incorporated under the laws of the United
States of America or a state thereof, it shall deliver to the Borrower and the
Agent certification as to exemption from, or reduction in, deduction or
withholding of any United States federal income taxes as required by Section 8.04.


 


(b)   Any Revolving Fronting Bank (including any
Third Party Fronting Bank) may be released from its obligations hereunder as a
Revolving Fronting Bank upon (x) the mutual agreement of such Revolving
Fronting Bank and the Borrower and (y) notice to the Agent.  With respect to any Revolving Fronting Bank
who is not a Third Party Fronting Bank, nothing in this Section 10.05(b) shall
release such Revolving Fronting Bank from its obligations hereunder as a
Revolving Credit Loan Bank.


 


Section 10.16  Replacement of Banks.


 


If (i) any Bank or any participant of such Bank requests
compensation under Section 8.03, or (ii) if the Borrower is required
to pay any additional amount to any Bank or any participant of such Bank or any
governmental authority for the account of any Bank or any participant of such
Bank pursuant to Section 8.04, or (iii) if such Bank has failed to
consent to any amendment, waiver or consent hereunder requiring the consent of
all Banks or all Banks directly affected thereby as to which the Required Banks
or the majority of Banks directly affected thereby have given their consent
(each, a “Non-Consenting
Bank”) or if any other circumstance exists hereunder that gives the
Borrower the right to replace a Bank as a party hereto, then the Borrower may,
at its sole expense and effort, upon notice to such Bank and the Agent, require
such Bank to assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in, and consents required by, Section 10.06),
all of its interests, rights and obligations under this Agreement and the
related Financing Documents to an assignee that shall assume such obligations
(which assignee may be another Bank, if a Bank accepts such assignment), provided that:


 


(a)           the Borrower shall have paid to the
Agent the assignment fee specified in Section 10.06(c);


 


(b)           such Bank shall have received payment
of an amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under
the other Financing Documents (including any amounts under Section 2.12)
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts);


 


(c)           in the case of any such assignment
resulting from a claim for compensation under Section 8.03 or payments
required to be made pursuant to Section 8.04, such assignment will result
in a reduction in such compensation or payments thereafter; and


 


(d)           such assignment does not conflict
with applicable laws or guidelines, directed duties or requests of, or
agreements with, any governmental authority (whether or not having the force of
law).


 


AES Fourth Amended and
Restated Credit Agreement


 


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A Bank shall not be required to make any such assignment or delegation
if, prior thereto, as a result of a waiver by such Bank or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.  If the Borrower elects
to exercise its rights with respect to a Non-Consenting Bank pursuant to clause
(iii) above, then it must exercise such rights with respect to all but not
less than all such Non-Consenting Banks. 
Each Bank agrees that, if it becomes a Non-Consenting Bank, it shall
execute and deliver to the Agent an Assignment an Assumption to evidence such
sale and purchase and shall deliver to the Agent any Note (if the assigning
Bank’s Loans are evidenced by Notes) subject to such Assignment and Assumption;
provided, however, that the failure of any
Non-Consenting Bank to execute an Assignment and Assumption shall not render
such sale and purchase (and the corresponding assignment) invalid and such
assignment shall be recorded in the Register.


 


[SIGNATURE PAGES IMMEDIATELY FOLLOW]


 


AES Fourth Amended and
Restated Credit Agreement


 


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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.


 


	
   

  	
  THE AES CORPORATION,

  
	
   

  	
  as
  Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Address:

  	
  4300 Wilson Boulevard

  
	
   

  	
   

  	
   

  	
  Arlington, VA 222093

  
	
   

  	
   

  	
  Fax:

  	
  (703) 528-4510

  



 


AES Fourth Amended and
Restated Credit Agreement


 

















 


	
   

  	
  SUBSIDIARY GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  AES HAWAII MANAGEMENT

  
	
   

  	
  COMPANY,
  INC.,

  
	
   

  	
  as
  Subsidiary Guarantor

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
  Fax:

  
	
   

  	
   

  	
   

  
	
   

  	
  AES NEW YORK FUNDING,

  
	
   

  	
  L.L.C.,

  
	
   

  	
  as
  Subsidiary Guarantor

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
  Fax:

  
	
   

  	
   

  	
   

  
	
   

  	
  AES OKLAHOMA HOLDINGS,

  
	
   

  	
  L.L.C.,

  
	
   

  	
  as
  Subsidiary Guarantor

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
  Fax:

  
	
   

  	
   

  	
   

  
	
   

  	
  AES WARRIOR RUN FUNDING,

  
	
   

  	
  L.L.C.,

  
	
   

  	
  as
  Subsidiary Guarantor

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
  Fax:

  



 


AES Fourth Amended and Restated Credit Agreement


 

















 


	
  BANKS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [Please Type or Print Name of Bank]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
						



 


AES Fourth Amended and Restated Credit Agreement


 

















 


AGENTS:


 


	
  CITICORP USA, INC.,

  	
   

  
	
  as
  Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  Address:

  	
  388 Greenwich Street, 21st Floor

  	
   

  
	
   

  	
   

  	
  New York, NY 10013

  	
   

  
	
   

  	
  Fax:

  	
  (212) 816-8098

  	
   

  
	
   

  	
  Attention:

  	
  Stuart Glen

  	
   

  
	
   

  	
  Email:

  	
  oploanswebadmin@citigroup.com

  	
   

  
	
   

  	
   

  	
   

  
	
  CITIBANK N.A.,

  	
   

  
	
  as
  Collateral Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  Address:

  	
  388 Greenwich Street, 21st Floor

  	
   

  
	
   

  	
   

  	
  New York, NY 10013

  	
   

  
	
   

  	
  Fax:

  	
  (212) 816-8098

  	
   

  
	
   

  	
  Attention:

  	
  Stuart Glen

  	
   

  
					



 


AES Fourth Amended and Restated Credit Agreement


 

















 


Appendix I


 


Revolving Credit Loan Facility


 


	
  Name of Revolving Credit Loan Bank

  	
   

  	
  Revolving Credit Loan Commitment

  	
   

  
	
  Bank of America,
  N.A.

  	
   

  	
  $60,000,000

  	
   

  
	
  Citicorp USA, Inc.

  	
   

  	
  60,000,000

  	
   

  
	
  Credit Suisse,
  Cayman Islands Branch

  	
   

  	
  60,000,000

  	
   

  
	
  Deutsche Bank
  Trust Company Americas

  	
   

  	
  60,000,000

  	
   

  
	
  JPMorgan Chase Bank, N.A.

  	
   

  	
  60,000,000

  	
   

  
	
  Lehman
  Commercial Paper Inc.

  	
   

  	
  60,000,000

  	
   

  
	
  Union Bank of California, N.A.

  	
   

  	
  40,000,000

  	
   

  
	
  UBS AG, Stamford
  Branch

  	
   

  	
  40,000,000

  	
   

  
	
  Barclays Bank
  PLC

  	
   

  	
  35,000,000

  	
   

  
	
  CALYON New York Branch

  	
   

  	
  35,000,000

  	
   

  
	
  Morgan Stanley Bank

  	
   

  	
  35,000,000

  	
   

  
	
  Société Générale - New York Branch

  	
   

  	
  35,000,000

  	
   

  
	
  Goldman Sachs
  Credit Partners L.P.

  	
   

  	
  30,000,000

  	
   

  
	
  ABN Amro Bank N.V.

  	
   

  	
  25,000,000

  	
   

  
	
  BNP Paribas

  	
   

  	
  25,000,000

  	
   

  
	
  Merrill Lynch
  Capital Corporation

  	
   

  	
  25,000,000

  	
   

  
	
  Australia &
  New Zealand Banking Group

  	
   

  	
  20,000,000

  	
   

  
	
  United Overseas
  Bank Ltd.

  	
   

  	
  20,000,000

  	
   

  
	
  WestLB AG, New
  York Branch

  	
   

  	
  15,000,000

  	
   

  
	
  Commerzbank AG,
  New York and Grand CA

  	
   

  	
  10,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $750,000,000

  	
   

  



 


AES Fourth Amended
and Restated Credit Agreement