Exhibit
10.1


 


EXECUTION
COPY


 


THIRD AMENDED AND
RESTATED CREDIT AND


REIMBURSEMENT AGREEMENT


 


dated as of


 


March 17, 2004


 


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 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 Facility),


 


CREDIT LYONNAIS NEW YORK
BRANCH,


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


 


THE BANKS LISTED
HEREIN


 

















 


	
  TABLE OF CONTENTS

  	
   

  
	
   

  	
   

  
	
  ARTICLE I

  	
   

  
	
   

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  Section 1.01 Definitions

  	
   

  
	
  Section 1.02 Accounting Terms and Determinations

  	
   

  
	
  Section 1.03 Types of Borrowing

  	
   

  
	
  Section 1.04 Currency Equivalents Generally

  	
   

  
	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
   

  	
   

  
	
  THE
  CREDITS

  	
   

  
	
   

  	
   

  
	
  Section 2.01 Commitment to Lend

  	
   

  
	
  Section 2.02 Notice of Borrowing

  	
   

  
	
  Section 2.03 Revolving Letters of Credit

  	
   

  
	
  Section 2.04 Evidence of Debt

  	
   

  
	
  Section 2.05 Maturity of Loans

  	
   

  
	
  Section 2.06 Interest Rates

  	
   

  
	
  Section 2.07 Method of Electing Interest
  Rates

  	
   

  
	
  Section 2.08 Commitment Fee

  	
   

  
	
  Section 2.09 Termination or Reduction of
  Revolving Credit Loan Commitments

  	
   

  
	
  Section 2.10 Prepayment of the Loans

  	
   

  
	
  Section 2.11 General Provisions as to
  Payments

  	
   

  
	
  Section 2.12 Funding Losses

  	
   

  
	
  Section 2.13 Computation of Interest and
  Fees

  	
   

  
	
  Section 2.14 Revolving L/C Cash Collateral
  Account

  	
   

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

  	
   

  
	
  Section 2.16 Alternative Currency Letter of
  Credit Issuances

  	
   

  
	
  Section 2.17 Increase in Term Loan
  Commitments

  	
   

  
	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
   

  	
   

  
	
  CONDITIONS

  	
   

  
	
   

  	
   

  
	
  Section 3.01 Closing

  	
   

  
	
  Section 3.02 Extension of Credit

  	
   

  
	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
   

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  
	
  Section 4.01 Corporate Existence and Power

  	
   

  



 


i

















 


	
  Section 4.02 Corporate and Governmental
  Authorization and Filings; No Contravention

  	
   

  
	
  Section 4.03 Compliance with Laws

  	
   

  
	
  Section 4.04 Binding Effect

  	
   

  
	
  Section 4.05 Financial Information

  	
   

  
	
  Section 4.06 Litigation

  	
   

  
	
  Section 4.07 Compliance with ERISA

  	
   

  
	
  Section 4.08 Environmental Matters

  	
   

  
	
  Section 4.09 Taxes

  	
   

  
	
  Section 4.10 Material AES Entities

  	
   

  
	
  Section 4.11 Not an Investment Company

  	
   

  
	
  Section 4.12 Public Utility Holding Company
  Act

  	
   

  
	
  Section 4.13 Full Disclosure

  	
   

  
	
  Section 4.14 Collateral Documents and
  Collateral

  	
   

  
	
  Section 4.15 Existing Letters of Credit

  	
   

  
	
  Section 4.16 Solvency

  	
   

  
	
  Section 4.17 Pledged Subsidiaries

  	
   

  
	
  Section 4.18 Qualified Holding Companies Debt

  	
   

  
	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
   

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

  
	
  Section 5.01 Information

  	
   

  
	
  Section 5.02 Payment of Obligations

  	
   

  
	
  Section 5.03 Maintenance of Property;
  Insurance

  	
   

  
	
  Section 5.04 Conduct of Business and
  Maintenance of Existence

  	
   

  
	
  Section 5.05 Compliance with Laws

  	
   

  
	
  Section 5.06 Inspection of Property, Books
  and Records

  	
   

  
	
  Section 5.07 Limitation on Debt

  	
   

  
	
  Section 5.08 Use of Proceeds

  	
   

  
	
  Section 5.09 Restricted Payments

  	
   

  
	
  Section 5.10 Negative Pledge

  	
   

  
	
  Section 5.11 Consolidations and Mergers

  	
   

  
	
  Section 5.12 Collateral Coverage Ratio

  	
   

  
	
  Section 5.13 Cash Flow Coverage

  	
   

  
	
  Section 5.14 Recourse Debt to Cash Flow
  Ratio

  	
   

  
	
  Section 5.15 Transaction with Affiliates

  	
   

  
	
  Section 5.16 Investments in Other Persons

  	
   

  
	
  Section 5.17 Upstreaming of Net Cash
  Proceeds by Subsidiaries

  	
   

  
	
  Section 5.18 Sales, Etc., of Assets

  	
   

  
	
  Section 5.19 Off Balance Sheet Obligations;
  Derivative Obligations

  	
   

  
	
  Section 5.20 Covenant to Give Security

  	
   

  
	
  Section 5.21 Further Assurances

  	
   

  



 


ii

















 


	
  ARTICLE VI

  	
   

  
	
   

  	
   

  
	
  DEFAULTS

  	
   

  
	
   

  	
   

  
	
  Section 6.01 Events of Default

  	
   

  
	
  Section 6.02 Notice of Default

  	
   

  
	
  Section 6.03 Cash Collateral

  	
   

  
	
   

  	
   

  
	
  ARTICLE VII

  	
   

  
	
   

  	
   

  
	
  THE
  AGENT

  	
   

  
	
   

  	
   

  
	
  Section 7.01 Appointment and Authorization

  	
   

  
	
  Section 7.02 Agent and Affiliates

  	
   

  
	
  Section 7.03 Consultation with Experts

  	
   

  
	
  Section 7.04 Liability of Agent and
  Collateral Agent

  	
   

  
	
  Section 7.05 Indemnification

  	
   

  
	
  Section 7.06 Credit Decision

  	
   

  
	
  Section 7.07 Successor Agent or Collateral
  Agent

  	
   

  
	
  Section 7.08 Administrative Agent May File
  Proofs of Claim

  	
   

  
	
  Section 7.09 Agents’ Fee

  	
   

  
	
  Section 7.10 Amendment to the Collateral
  Trust Agreement

  	
   

  
	
  Section 7.11 Delivery of Information

  	
   

  
	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  
	
   

  	
   

  
	
  CHANGE
  IN CIRCUMSTANCES

  	
   

  
	
   

  	
   

  
	
  Section 8.01 Basis for Determining Interest
  Rate Inadequate or Unfair

  	
   

  
	
  Section 8.02 Illegality

  	
   

  
	
  Section 8.03 Increased Cost and Reduced
  Return

  	
   

  
	
  Section 8.04 Taxes

  	
   

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

  	
   

  
	
   

  	
   

  
	
  ARTICLE IX

  	
   

  
	
   

  	
   

  
	
  SUBSIDIARY GUARANTY

  	
   

  
	
   

  	
   

  
	
  Section 9.01 The Subsidiary Guaranty

  	
   

  
	
  Section 9.02 Guaranty Absolute

  	
   

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

  	
   

  
	
  Section 9.04 Revolving L/C Cash Collateral Account

  	
   

  
	
  Section 9.05 Waiver by the Subsidiary
  Guarantors

  	
   

  
	
  Section 9.06 Subrogation

  	
   

  
	
  Section 9.07 Stay of Acceleration

  	
   

  
	
  Section
  9.08 Limitation of Liability

  	
   

  
	
  Section 9.09 Release of Subsidiary Guarantors

  	
   

  



 


iii

















 


	
  Section 9.10 Representations and Warranties

  	
   

  
	
  Section 9.11 Covenants

  	
   

  
	
   

  	
   

  
	
  ARTICLE X

  	
   

  
	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  Section 10.01 Notices

  	
   

  
	
  Section 10.02 No Waivers

  	
   

  
	
  Section 10.03 Expenses; Indemnification

  	
   

  
	
  Section 10.04 Sharing of Set-offs

  	
   

  
	
  Section 10.05 Amendments and Waivers

  	
   

  
	
  Section 10.06 Successors and Assigns

  	
   

  
	
  Section 10.07 No Margin Stock

  	
   

  
	
  Section 10.08 Governing Law; Submission to
  Jurisdiction

  	
   

  
	
  Section 10.09 Release of Collateral

  	
   

  
	
  Section 10.10 Counterparts; Integration;
  Effectiveness

  	
   

  
	
  Section 10.11 Confidentiality

  	
   

  
	
  Section 10.12 WAIVER OF JURY TRIAL

  	
   

  
	
  Section 10.13 Severability; Modification to
  Conform to Law

  	
   

  
	
  Section 10.14 Judgment Currency

  	
   

  
	
  Section 10.15 Revolving Fronting Banks

  	
   

  



 


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

  



 


v

















 


	
  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

  



 


vi

















 


THIRD AMENDED AND
RESTATED CREDIT AND

REIMBURSEMENT AGREEMENT


 


THIRD AMENDED AND RESTATED CREDIT AND REIMBURSEMENT
AGREEMENT dated as of March 17, 2004 (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 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
Facility), CREDIT LYONNAIS NEW YORK BRANCH, as Co-Documentation Agent
(Revolving Credit 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 Second Amended and Restated Credit and Reimbursement
Agreement dated as of July 29, 2003 (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 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 facility), Credit
Lyonnaise New York Branch, as Co-Documentation Agent (revolving credit
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, increase the Revolving Credit Loan Commitments (as
hereinafter defined) by up to $200,000,000, provide for a future increase in
the Term Loan Commitments (as hereinafter defined) and restructure certain
other 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:


 


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 Free Cash Flow” means, as of the end of any fiscal year, an
amount equal to (i) the Adjusted Parent Operating Cash Flow for such fiscal
year plus (ii) the aggregate
amount of Net Cash Proceeds from Covered Asset Sales received by the Borrower
and permitted to be retained by the Borrower under the terms of this Agreement during
such fiscal year less (iii) the
aggregate amount of any Investments (other than Temporary Cash Investments)
made in cash by the Borrower during such fiscal year in accordance with the
terms of this Agreement, less
(iv) the aggregate principal amount of Debt repaid or prepaid with cash by the
Borrower during such fiscal year in accordance with the terms of this
Agreement, excluding (x) Debt in respect of Revolving Credit Loans and
Revolving Letters of Credit (unless the Revolving Credit Commitments are
permanently reduced in a corresponding amount in connection with such repayment
or prepayment), (y) Debt required to be repaid or prepaid with the Net Cash
Proceeds of Asset Sales in accordance with the requirements of Section 2.10(b)
and (z) repayments or prepayments of Debt financed by incurring other Debt less (v) the aggregate amount for such
fiscal year of Corporate Charges.


 


“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


 


2

















 


without
duplication), in each case to the extent paid by the Borrower during such
period 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.


 


“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 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 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


 


3

















 


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 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 date hereof, by and among each
grantor thereunder, the Representatives (as defined in the Collateral Trust
Agreement) and the Corporate Trustee.


 


“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.


 


“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
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 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.


 


4

















 


“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 (i) in respect of the Net Cash Proceeds received after
the Effective Date from Covered Asset Sales and the incurrence of any Debt
permitted by Section 5.07(a)(ix) or 5.07(b)(iv) relating to a bridge financing
of any Covered Asset Sale, 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 the Senior Secured Exchange Notes issued on or
prior to the date hereof and outstanding at such time plus (without duplication) the aggregate
principal amount of First Priority Secured Debt, the proceeds of which were
used to permanently reduce Total Bank Exposure or the Senior Secured Exchange
Notes and (ii) in connection with the incurrence of any Debt pursuant to
Section 5.07(b)(ii) (but only to the extent applicable pursuant to the proviso
thereof) or 5.07(b)(vi), a percentage 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.


 


“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.


 


5

















 


“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 and the Initial Term Loans,
a rate per annum equal to 3.00% (subject to the provisions of Section 2.06(f)
hereof) and (ii) in respect of the Incremental Term Loan Facility, a rate per
annum to be agreed 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”
has the meaning specified in the definition of “Creditor’s Portion”.


 


“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.


 


“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.


 


6

















 


“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
the date on or after the Effective Date on which the Agent shall have 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 Coverage
Ratio” means, at any time, the ratio of (i) the Collateral Value at
such time to (ii) the sum of (in each case to the extent not collateralized by
cash or Temporary Cash Investments) (A) the aggregate principal amount of
Loans then outstanding, (B) the aggregate amount of the Unused Revolving
Credit Loan Commitments at such time, (C) the aggregate Available Amount
at such time, (D) the aggregate principal amount of Senior Secured
Exchange Notes then outstanding, (E) the “mark to market” value of all
outstanding Secured Hedge Agreements at such time in an amount up to
$50,000,000 (provided that at such time as the Sul Guarantee shall have been
paid in full or terminated, such amount shall be increased to $100,000,000),
(F) the amounts payable by the Borrower pursuant to any Secured Treasury
Management Service Agreement, (G) the aggregate amount payable by the Borrower
pursuant to the terms of the Sul Guarantee at such time in an amount up to
$50,000,000, and (H) the aggregate principal amount of First Priority Secured
Debt not described in the preceding clauses (A) through (G) permitted by
Section 5.10 (p) at such time.


 


“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


 


7

















 


(ii) its
intercompany receivables, plus
(iii) its pre-tax retained earnings, plus (iv)
its 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).


 


“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 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; and


 


(ii)                                  rental
expense of the Borrower for such period;


 


8

















 


(iii)                               dividends
paid on the Borrower’s Redeemable Stock during such period;


 


(iv)                              dividends
paid on the Existing Trust Preferred Securities; and


 


(v)                                 dividends
paid on the Borrower’s preferred stock 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 Asset Sale” means any Asset Sale.


 


“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 from (i) Covered Asset Sales or (ii) Debt permitted by
Section 5.07(a)(viii) or Section 5.07(b)(iv), in each case referred to in
clause (ii) relating to a bridge financing of any Covered Asset Sale (the “Bridge Debt”), the following:


 


(A)                              60%
of such Net Cash Proceeds from Covered Asset Sales and/or Bridge Debt, at any
time that the Recourse Debt to Cash Flow Ratio is greater to or equal to
5.0:1.0 or


 


(B)                                50%
of such Net Cash Proceeds from Covered Asset Sales and/or Bridge Debt, 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


 


9

















 


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.


 


“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,
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.  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.


 


“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.


 


10

















 


“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 the date this Agreement becomes
effective in accordance with Section 10.10.


 


“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 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); (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 (E) except for
the Debt issued in connection with the Existing Trust Preferred Securities,
that does not mature, in whole or in part, and is not subject to any required
repayment or prepayment, any required sinking fund or similar payment or any
repayment or prepayment or sinking fund or similar payment at the option of the
holder thereof, prior to the fifth anniversary of the Termination Date; and


 


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


 


(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


 


11

















 


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.


 


“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 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 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.


 


12

















 


“Euro-Dollar Margin” means (i) in respect of the Revolving
Credit Loans and the Initial Term Loans, a rate per annum equal to 4.00%
(subject to the provisions of Section 2.06(f) hereof) and (ii) in respect of
the Incremental Term Loan Facility, a rate per annum to be agreed 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 Lenders.


 


“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 Existing Bank Credit Agreement) issued under the Existing Revolving
Credit Facility that is 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.


 


13

















 


“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.


 


“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.


 


14

















 


“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.


 


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


 


“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(g).


 


“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


 


15

















 


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 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(g).


 


“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 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


 


16

















 


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.


 


“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.


 


“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.


 


17



















“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.


 


“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


 


18

















 


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 (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-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


 


19

















 


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, 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), but only to the extent received in cash by the Borrower from a
Person during such period:


 


(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;


 


20

















 


(iv)          interest and other distributions paid
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); and


 


(v)           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.


 


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 a 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.


 


“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,


 


21

















 


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 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 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 and (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


 


22

















 


Barry as of the
date of this Agreement under any agreement by which it is bound as of the date
of this Agreement; 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) plus (ii)
Derivative 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 of any Person that by its terms or
otherwise is (i) required to be redeemed prior to the first anniversary of
the Termination Date, (ii) redeemable at the option of the holder of such
class or series of Capital Stock at any time prior to the first anniversary of
the Termination Date or (iii) convertible into or exchangeable for (unless
solely at the option of such person) Capital Stock referred to in clause
(i) or (ii) above or Debt having a scheduled maturity prior to the
first anniversary of the Termination Date; provided
that any Capital Stock 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 upon the occurrence of an “asset sale”
or a “change of control” occurring prior to the first anniversary of the
Termination Date shall not constitute Redeemable Stock if such Capital Stock
specifically provides that such person will not repurchase or redeem any such
Capital Stock 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.


 


23

















 


“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.


 


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


 


“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(a).


 


“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


 


24

















 


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.


 


“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 4.00%.


 


“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
is entered into by and between the Borrower and any Hedge Bank.


 


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


 


25

















 


“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.


 


“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.


 


26

















 


“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 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 was formed solely for the purpose of
issuing Equity Credit 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 Guaranty 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


 


27

















 


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 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) July 31, 2007 in the case of the Revolving Credit Loan Facility, (ii) April
30, 2008 in the case of the Initial Term Loan Facility; provided, however,
that if, prior to July 31, 2007, the Senior Subordinated Notes have not been
refinanced to mature on a date after April 30, 2008, or repaid in full prior to
such date, then “Termination Date” in the case of the Initial Term Loan
Facility shall mean July 31, 2007 (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


 


28

















 


“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 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 


 


29

















 


(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, 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.


 


“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


 


30

















 


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 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”)
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 Credit Agreement on the
Effective Date shall be continued as Revolving Credit Loans hereunder, and the
Revolving Credit Loan of each Revolving Credit Loan Bank hereunder as of the
Effective Date shall be as set forth on Appendix I hereto.


 


31

















 


(b)           Initial Term Loan Facility.  Subject to the terms and conditions set
forth herein, on the Effective Date any “Term Loan” outstanding under the
Existing Credit Agreement shall be continued as an Initial Term Loan hereunder
and the Initial Term Loan of each Initial Term Loan Bank hereunder as of the
Effective Date shall be as set forth on Appendix II hereto.


 


(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.


 


(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


 


32

















 


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’s 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 Existing 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 Existing 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
Existing 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.


 


(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


 


33

















 


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));


 


(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


 


34

















 


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 a 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 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


 


35

















 


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;


 


36

















 


(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


 


37

















 


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 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,


 


38

















 


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 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 on the last Domestic Business Day of each January, April, July and
October and 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


 


39

















 


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; 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


 


40

















 


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 (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 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


 


41

















 


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 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 date hereof 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


 


42

















 


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).


 


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 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 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.


 


43

















 


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


 


(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 any Borrower.


 


(d)           A 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 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 applicable 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.  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 Proceeds from Covered 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


 


44

















 


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
Covered Asset Sales, (B) Net Cash Proceeds from the incurrence of Debt
permitted by Section 5.07(a)(viii) relating to a bridge financing of any
Covered Asset Sale or (C) Net Cash Proceeds from the incurrence of Debt
permitted by Section 5.07(b)(iv) relating to a bridge financing of any Covered
Asset Sale, 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 any reduction of Revolving Credit Loan
Commitments).


 


(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), offer to prepay an aggregate principal amount
of the Term Loans in an aggregate amount equal to the Banks’ Ratable Share of
an amount equal to (x) 100%, in the case of Debt issued by IPALCO, (y) for
so long as the Term Loan Facility is outstanding, 100% in the case of Debt
issued by any Subsidiary Guarantor and (z) in all other cases, an amount equal
to 75% of such Net Cash Proceeds (other than $200,000,000 of additional Debt of
the Subsidiaries of the Borrower incurred after the date hereof).  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


 


45

















 


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 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 such 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.


 


46

















 


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.


 


(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


 


47

















 


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 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


 


48

















 


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 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.


 


49



















(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 (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


 


50

















 


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, 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, (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 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


 


51

















 


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


 


(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(g) 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.


 


52

















 


ARTICLE III


 


CONDITIONS


 


Section 3.01  Closing.


 


The closing hereunder
shall occur when all the following conditions have 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 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


 


53

















 


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 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.


 


54

















 


The Agent shall promptly
notify the Borrower and the Banks of the Closing Date, and such notice shall be
conclusive and binding on all parties hereto.


 


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
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:


 


55

















 


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
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.


 


56

















 


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
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of December 31, 2003 and the
related consolidated statements of operations and cash flows for the fiscal
year then ended, reported on by Deloitte & Touche and set forth in the
Form 10-K, a copy of which has been delivered to each of the Bank Parties,
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.


 


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


 


57

















 


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 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


 


58

















 


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 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


 


59

















 


result in a Material
Adverse Effect, which materially and adversely affect or may affect (to the
extent any 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, 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 date hereof, showing as of the date hereof (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 the date hereof 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-


 


60

















 


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 date hereof 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 date hereof and
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.


 


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:


 


61

















 


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 within 120 days after the end of each fiscal
year of the Borrower, a consolidated and consolidating balance sheet of each
Obligor 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,
consolidating 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, setting forth in each case in comparative form
the figures for the previous fiscal year, said consolidated financial
statements to be reported on, in a manner acceptable to the Securities and
Exchange Commission, by Deloitte & Touche or other independent public
accountants of nationally recognized standing and such consolidating and
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 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 each Obligor 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 such Obligor’s fiscal year
ended at the end of such quarter and the related consolidated and
unconsolidated statements of cash flows for the portion of such Obligor’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 such
Obligor’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


 


62

















 


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;


 


(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, 5.11, 5.12, 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 (i) 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, and (ii) confirming the calculations set forth in the officer’s
certificate delivered simultaneously therewith pursuant to clause (d) above;


 


(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


 


63

















 


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 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), 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, notice or other 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
liability, obligation, loss, damage, cost, expense, fine, penalty or sanction
or the requirement to commence any remedial action resulting from or in
connection with any air emission, water discharge, noise emission, Hazardous
Substance or any other 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 Non-Pledged


 


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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 business of the same general
type as now conducted by the Borrower and its Subsidiaries; (b) will continue,
and will cause


 


65

















 


AES BVI II, each Material
AES Entity and each Pledged 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:


 


(a)                                  in
the case of the Borrower:


 


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(i)                                     Debt
under the Financing Documents;


 


(ii)                                  Debt
existing on the date hereof 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) the final scheduled maturity of such Debt shall in no
event be on or prior to the Initial Term Loan Termination Date and (z) such
Debt shall not have any scheduled amortization on or prior to the Initial


 


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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 Asset Sale, provided that (x) the only direct or
contingent obligor in respect of such Debt is the holder of the asset that is
the subject of such Asset Sale, (y) the interest rate applicable to such
Debt does not exceed the then applicable market interest rate and (z) the Net
Cash Proceeds from the incurrence of such Debt shall be applied as set forth in
Section 2.10(b); and


 


(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


 


(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 date hereof, 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 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


 


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(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 or (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); 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 date hereof;


 


(iv)                              Debt
incurred by a Subsidiary as a bridge financing for a proposed Asset Sale, provided that (x) the only direct or
contingent obligor in respect of such Debt is the holder of the asset that is
the subject of such Asset Sale, (y) the interest rate applicable to such Debt
does not exceed the then applicable market interest rate and (z) 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 (x) in
the case of Debt incurred by IPALCO, an amount equal to the Banks’ Ratable
Share of 100% of such Net Cash Proceeds, (y) in the case of Debt issued by any
Subsidiary Guarantor, an amount equal to 100% of such Net Cash Proceeds and (z)
in the case of any other Subsidiary, an amount equal to the


 


69

















 


Banks’ Ratable share of 75% of such Net Cash Proceeds (other than
$200,000,000 of additional Debt of the Subsidiaries incurred after the date
hereof), in each case, 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


 


(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.


 


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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 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 in the Borrower,
except the Borrower may (i) declare and pay cash dividends to the holders of
(x) the Existing Trust Preferred Securities and (y) the Borrower’s preferred
stock; provided that for purposes
of determining compliance with Section 5.13 hereof, the Cash Flow Coverage
Ratio for any period shall take into account any such dividends declared and
paid during such period and (ii) redeem, repurchase, refinance, replace or
refund any of the Obligations arising in respect of the Existing Trust
Preferred Securities as provided in Section 5.07(a)(ix).


 


(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 date of this Agreement securing Debt outstanding on the date of
this Agreement;


 


(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;


 


71

















 


(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 permitted by Section 5.19(c);


 


(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 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


 


72

















 


(including
contract rights) of Subsidiaries of the Borrower having a direct or indirect
interest in such AES Businesses;


 


(p)                                 Liens
on the Creditor Group Collateral securing the Debt of the Borrower or
obligations of the Borrower under Hedge Agreements; provided that the aggregate principal amount (or accreted
value, if applicable) of First-Priority Secured Debt and Second-Priority
Secured Debt does not exceed $3.375 billion; provided
further that, subject to the first proviso above, Liens on
the Creditor Group Collateral securing First Priority Secured Debt of the
Borrower shall only secure First Priority Secured Debt incurred after
July 29, 2003 (other than Debt incurred pursuant to the Financing
Documents and obligations under Hedge Agreements up to an aggregate principal
amount not to exceed $50,000,000 (provided that at such time as the Sul
Guarantee shall have been paid in full or terminated, such amount shall be
increased to $100,000,000)) up to an aggregate principal amount equal to
$90,000,000 plus the sum of all
amounts applied since July 29, 2003 to (x) permanently prepay Loans
pursuant to Section 2.10 hereunder or permanently reduce Unused Revolving
Credit Loan Commitments hereunder (without duplication) or (y) repay or prepay
the Senior Secured Exchange Notes; provided,
further that, in addition to the
First Priority Secured Debt permitted to be secured by the immediately
preceding proviso, but subject to the first proviso above, Liens
on the Creditor Group Collateral securing First Priority Secured Debt of the
Borrower may secure additional First Priority Secured Debt incurred after the
Effective Date up to an aggregate principal amount not to exceed $175,000,000
so long as (x) such First Priority Secured Debt consists solely of senior bank
revolving credit or term loan facilities and (y) if any term of such First
Priority Secured Debt relating to covenants or events of default is materially
more favorable to the lenders in respect of such First Priority Secured Debt
than the corresponding term hereof, the terms hereof shall be amended to
reflect such more favorable term; provided
further that upon the sale or
other disposition of the Capital Stock of IPALCO or any Subsidiary Guarantor or
of all or substantially all of the assets of IPALCO or any Subsidiary
Guarantor, the baskets set forth in the immediately preceding two provisos
shall be ratably reduced, solely in respect of Debt incurred on or after the
date of such sale or disposition, by an amount equal to 60% the aggregate
Collateral Value of the Capital Stock or assets which are the subject of such
sale or disposition;


 


(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 Asset Sale 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;


 


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(t)                                    Liens
on cash and Temporary Cash Investments that secure letters of credit up to an
aggregate principal amount not to exceed $300,000,000; 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”.


 


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).


 


74



















Section 5.12  Collateral Coverage Ratio.


 


The Collateral Coverage
Ratio at any date shall not be less than 3.00:1.0.


 


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:


 


	
  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

  	
   

  



 


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:


 


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  Four

  Fiscal Quarter Ending

  	
   

  	
  Maximum
  Recourse

  Debt to Cash Flow Ratio

  	
   

  
	
  December 31, 2003

  	
   

  	
  8.5

  	
   

  
	
  March 31, 2004

  	
   

  	
  8.5

  	
   

  
	
  June 30, 2004

  	
   

  	
  8.5

  	
   

  
	
  September 30, 2004

  	
   

  	
  8.5

  	
   

  
	
  December 31, 2004

  	
   

  	
  8.5

  	
   

  
	
  March 31, 2005

  	
   

  	
  8.35

  	
   

  
	
  June 30, 2005

  	
   

  	
  8.25

  	
   

  
	
  September 30, 2005

  	
   

  	
  8.15

  	
   

  
	
  December 31, 2005

  	
   

  	
  8.00

  	
   

  
	
  March 31, 2006

  	
   

  	
  7.90

  	
   

  
	
  June 30, 2006

  	
   

  	
  7.85

  	
   

  
	
  September 30, 2006

  	
   

  	
  7.80

  	
   

  
	
  December 31, 2006

  	
   

  	
  7.75

  	
   

  
	
  March 31, 2007

  	
   

  	
  7.70

  	
   

  
	
  June 30, 2007

  	
   

  	
  7.65

  	
   

  
	
  September 30, 2007

  	
   

  	
  7.60

  	
   

  
	
  December 31, 2007

  	
   

  	
  7.55

  	
   

  
	
  March 31, 2008

  	
   

  	
  7.50

  	
   

  



 


Section 5.15  Transaction with Affiliates.


 


Except pursuant to
agreements existing on the date hereof 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


 


76

















 


of reasonable and
customary regular fees to directors of the Borrower or a Subsidiary of the
Borrower.


 


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 date hereof, (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 to employees in the ordinary course of the business of the
Borrower and its Subsidiaries as presently conducted in an aggregate principal
amount not to exceed $10,000,000 at any time outstanding;


 


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


 


(iv)                              Investments
existing on the date hereof 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 Closing 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


 


77

















 


reorganization of the holdings of the Borrower, any Subsidiary or
Excluded AES Entity 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 the Effective Date shall not
exceed $135,000,000; 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 which are part of, or in lines of
business which are, substantially the same lines of business as, or
complementary or ancillary to, one or more of the principal businesses of the
Borrower and its Subsidiaries in the ordinary course, including any
energy-related infrastructure or public utility businesses and the ownership, extraction,
processing, transportation, distribution and sales of fossil fuels and
derivatives thereof, but excluding trading activities or hedging transactions
other than such activities conducted in the ordinary course of 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 5.12, 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


 


78

















 


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;


 


(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; and


 


(xiv)                         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), any Subsidiary of the Borrower with any direct or
indirect interest in (i) a Power Supply Business may make an


 


79

















 


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 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.


 


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;


 


80

















 


(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; 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 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


 


81

















 


joint venture agreement, shareholders agreement or similar arrangement
existing as of the date hereof that requires one shareholder to transfer its
interest to another upon terms and in circumstances customary for the industry
(provided that any cash received
in connection with such disposition shall be treated as Net Cash Proceeds from
a Covered 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 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.


 


Section 5.19  Off Balance Sheet Obligations;
Derivative Obligations.


 


(a)                                  The
Borrower shall not have, incur or undertake, or permit any of its Subsidiaries
to have, incur or undertake any Off Balance Sheet Obligations, other than Off
Balance Sheet Obligations existing on the date hereof.


 


82

















 


(b)                                 The
Borrower shall not enter into any Hedge Agreement, except for Hedge Agreements
entered into to hedge against fluctuations in interest rates or foreign
exchange rates incurred in the ordinary course of business and consistent with
prudent business practice.


 


(c)                                  The
Borrower shall not permit its Subsidiaries to enter into any Hedge Agreements,
except Hedge Agreements entered into to hedge against fluctuations in interest
rates, foreign exchange, and commodity prices incurred in the ordinary course
of business and consistent with prudent business practice.


 


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


 


(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


 


83

















 


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 (or, with the giving of notice or lapse of time
or both, would enable) 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; 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


 


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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 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;


 


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(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 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.


 


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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.


 


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


 


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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 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


 


89

















 


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 Lenders 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).


 


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


 


90

















 


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  Amendment to the Collateral Trust
Agreement.


 


(a)                                  Each
Bank, by its signature hereto, consents to the execution and delivery of (i)
Amendment No. 2 to the Collateral Trust Agreement for the purpose of amending
the definition of “Other Debt Agreement” therein and (ii) at such time as the
Sul Guarantee shall have been paid in full or terminated, an amendment to the
Collateral Trust Agreement to amend the definition of “Secured Obligations” to
increase the amount of permitted Secured Hedge Agreements to $100,000,000.


 


(b)                                 Each
Bank hereby authorizes the Agent, as the Required Representative (as defined in
the Collateral Trust Agreement), to authorize the Collateral Trustees to
execute each of the amendments referred to in Section 7.10(a).


 


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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, without limitation, all notices,
requests, financial 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.


 


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(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 the Platform shall
constitute effective delivery of the Communications to 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 date
of this Agreement, 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


 


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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 to the other Bank
Parties and the Borrower, whereupon 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 date hereof, 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 date hereof, the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change in


 


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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 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 date hereof, 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


 


95

















 


applicable law
and (iv) the Borrower shall furnish to the Agent, at its address referred
to in 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
and 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.


 


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


 


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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;


 


(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;


 


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(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 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.


 


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(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 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.


 


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


 


101

















 


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 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.


 


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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 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 


 


103

















 


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; (iv) amend
Section 10.04 or this Section 10.05; (v) postpone the date fixed for any
payment of principal of or interest on any Loan or Reimbursement Obligation or
any fees hereunder or (vi) postpone the final maturity of the Loans, (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 or (v) change (x) the order of application in the prepayment of
Loans among the Facilities or any reduction in the Revolving Credit Loan
Commitments from


 


104

















 


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), (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 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


 


105

















 


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 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 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


 


106

















 


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.


 


(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


 


107

















 


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 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


 


108

















 


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 receipt by the Agent of
counterparts hereof signed by each of (a) the Obligors, (b) the Agents, (c) the
“Required Banks” under the Existing Credit Agreement, (d) each “Revolving
Credit Loan Bank” under the Existing Credit Agreement which has an increased
Revolving Credit Loan Commitment pursuant to the terms hereof and (e) each
Revolving Credit Loan Bank who was not a “Revolving Credit Loan Bank” under the
Existing Credit Agreement (or, in the case of any such party as to which an
executed counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex, facsimile transmission or other
written confirmation from such party of execution of a counterpart hereof by
such party).


 


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


 


109

















 


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 Fronting
Bank as set


 


110

















 


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.


 


 


[SIGNATURE PAGES
IMMEDIATELY FOLLOW]


 


111

















 


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:

  	
  1001 North 19th Street

  
	
   

  	
   

  	
  Arlington, VA 22209

  
	
   

  	
   

  	
   

  
	
   

  	
  Fax:

  	
  (703) 528-4510

  
					



 

















 


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:

  
				



 

















 


	
  BANKS:

  
	
   

  
	
   

  
	
   

  	
   

  
	
  [Please Type or Print Name of Bank]

  
	
   

  
	
   

  
	
  By

  	
   

  	
   

  
				



 

















 


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

  
						



 

















 


APPENDIX I to the


Third
Amended and Restated


Credit
and Reimbursement Agreement


 


 


REVOLVING
CREDIT LOAN FACILITY


 




	
  Name of Revolving Credit Loan Bank

  	
   

  	
  Revolving
  Credit Loan Commitments ($)

  	
   

  
	
  Citicorp USA,
  Inc.

  	
   

  	
  $

  	
  53,000,000.00

  	
   

  
	
  Deutsche Bank
  Trust Company Americas

  	
   

  	
  $

  	
  53,000,000.00

  	
   

  
	
  UBS Loan Finance
  LLC

  	
   

  	
  $

  	
  53,000,000.00

  	
   

  
	
  Lehman
  Commercial Paper, Inc.

  	
   

  	
  $

  	
  50,000,000.00

  	
   

  
	
  Union Bank of
  California, N.A.

  	
   

  	
  $

  	
  48,000,000.00

  	
   

  
	
  Bank of America,
  N.A.

  	
   

  	
  $

  	
  46,000,000.00

  	
   

  
	
  Credit Lyonnais
  New York Branch

  	
   

  	
  $

  	
  28,000,000.00

  	
   

  
	
  Société Générale – New York Branch

  	
   

  	
  $

  	
  27,000,000.00

  	
   

  
	
  Credit Suisse
  First Boston

  	
   

  	
  $

  	
  22,000,000.00

  	
   

  
	
  Merrill Lynch Capital Corporation

  	
   

  	
  $

  	
  22,000,000.00

  	
   

  
	
  BNP Paribas

  	
   

  	
  $

  	
  15,000,000.00

  	
   

  
	
  Westdeutsche Landesbank Girozentrale

  	
   

  	
  $

  	
  15,000,000.00

  	
   

  
	
  ABN Amro

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  
	
  J.P. Morgan Chase

  	
   

  	
  $

  	
  5,000,000.00

  	
   

  
	
  Toronto Dominion (New York), Inc.

  	
   

  	
  $

  	
  3,000,000.00

  	
   

  






 

















 


APPENDIX II to the


Third
Amended and Restated


Credit and Reimbursement Agreement


 


TERM
LOAN FACILITY


 


As per the Register maintained by the Agent pursuant
to Section 10.06(f) of the Third Amended and Restated Credit and Reimbursement
Agreement.


 


1

















 


Appendix
III to the Third
Amended and Restated Credit and Reimbursement Agreement


 


	
  Beneficiary

  	
   

  	
  Letter of
  Credit

  Number

  	
   

  	
  Fronting

  Expiry

  	
   

  	
  Type of
  Letter

  of Credit

  	
   

  	
  Name of
  Issuing Bank

  	
   

  	
  Amount

  	
   

  
	
  Eastern (DSR)
  $36,326,900

  	
   

  	
  Y032406

  	
   

  	
  07/26/04

  	
   

  	
  Financial

  	
   

  	
  UBS AG

  	
   

  	
  36,326,900.00

  	
   

  
	
  Kelanitissa

  	
   

  	
  3039084

  	
   

  	
  03/24/04

  	
   

  	
  Financial

  	
   

  	
  B of A, Los Angeles

  	
   

  	
  900,000.00

  	
   

  
	
  WAPDA

  	
   

  	
  30034738

  	
   

  	
  02/28/05

  	
   

  	
  Performance

  	
   

  	
  Citibank NY

  	
   

  	
  12,034,365.13

  	
   

  
	
  Constellation
  Power Source Inc.

  	
   

  	
  306S234686

  	
   

  	
  01/01/05

  	
   

  	
  Performance

  	
   

  	
  UBOC , LA

  	
   

  	
  23,200,000.00

  	
   

  
	
  PSEG Energy
  Resources & Trade LLC

  	
   

  	
  306S234688

  	
   

  	
  01/18/05

  	
   

  	
  Performance

  	
   

  	
  UBOC , LA

  	
   

  	
  3,500,000.00

  	
   

  
	
  PPL Energy Plus
  LLC

  	
   

  	
  306S234687

  	
   

  	
  04/30/04

  	
   

  	
  Performance

  	
   

  	
  UBOC , LA

  	
   

  	
  100,000.00

  	
   

  
	
  Coral Energy
  Holding L.P.

  	
   

  	
  306S234734

  	
   

  	
  01/31/05

  	
   

  	
  Performance

  	
   

  	
  UBOC , LA

  	
   

  	
  3,000,000.00

  	
   

  
	
  Morgan Stanley
  Capital Group

  	
   

  	
  306S235411

  	
   

  	
  12/31/05

  	
   

  	
  Performance

  	
   

  	
  UBOC , LA

  	
   

  	
  3,725,000.00

  	
   

  
	
  The Potomac
  Edison Company

  	
   

  	
  30035330

  	
   

  	
  06/15/04

  	
   

  	
  Performance

  	
   

  	
  Citibank NY

  	
   

  	
  577,500.00

  	
   

  
	
  Elexon

  	
   

  	
  5134047511

  	
   

  	
  03/15/05

  	
   

  	
  Performance

  	
   

  	
  Citibank NY

  	
   

  	
  2,686,364.94

  	
   

  
	
  Total
  Face Amount of Revolving Letters of Credit Outstanding

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  86,050,130.07

  	
   

  



 

















 


SCHEDULE I


 


PLEDGOR: AES CORP.


 


	
  Legal Name

  	
   

  	
  Jurisdiction
  of

  Incorporation

  	
   

  	
  Types of

  Shares

  	
   

  	
  Authorized

  Shares

  	
   

  	
  Outstanding

  Shares

  	
   

  	
  Percentage

  Owned by AES

  	
   

  	
  Certificate

  No.

  	
   

  	
  % Pledged

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Alamitos
  Development, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Argentina,
  Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  3

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Atlantis,
  Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  2

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Barka
  Services, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common

  	
   

  	
  200

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  2

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES CAESS
  Distribution, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES California
  Management Co., Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  3

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Canal Power
  Services, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Cemig
  Holdings, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  2

  	
   

  	
  100

  	
   

  



 


1

















 


	
  Legal Name

  	
   

  	
  Jurisdiction
  of

  Incorporation

  	
   

  	
  Types of

  Shares

  	
   

  	
  Authorized

  Shares

  	
   

  	
  Outstanding

  Shares

  	
   

  	
  Percentage

  Owned by AES

  	
   

  	
  Certificate

  No.

  	
   

  	
  % Pledged

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Central
  American Management Services, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Central Valley, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  1,000

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Chaparron I,
  Ltd.

  	
   

  	
  Cayman

  	
   

  	
  Ordinary

  	
   

  	
  50,000

  	
   

  	
  1,000

  	
   

  	
  100

  	
   

  	
  2, 3

  	
   

  	
  65

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Columbia
  Power, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  1,000

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Connecticut
  Management, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  1,000

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Ecotek
  Holdings, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  1,000

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES EDC Funding
  II, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  1,000

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  2

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES EEO
  Distribution, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES El Faro Generation, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common

  	
   

  	
  110

  	
   

  	
  110

  	
   

  	
  100

  	
   

  	
  2

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Engineering,
  Ltd.

  	
   

  	
  Cayman

  	
   

  	
  Ordinary

  	
   

  	
  50,000

  	
   

  	
  1,000

  	
   

  	
  100

  	
   

  	
  4,5

  	
   

  	
  65

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Georgia Gas,
  L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  1,000

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  65

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES GEH
  Holdings, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  N/A

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  65

  	
   

  



 


2

















 


	
  Legal Name

  	
   

  	
  Jurisdiction
  of

  Incorporation

  	
   

  	
  Types of

  Shares

  	
   

  	
  Authorized

  Shares

  	
   

  	
  Outstanding

  Shares

  	
   

  	
  Percentage

  Owned by AES

  	
   

  	
  Certificate

  No.

  	
   

  	
  % Pledged

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES GEH, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  N/A

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  65

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Granbury,
  L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  N/A

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  2

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Hawaii
  Management Company, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  4

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES
  International Holdings, Ltd.

  	
   

  	
  British Virgin Islands

  	
   

  	
  Common

  	
   

  	
  50,000

  	
   

  	
  50,000

  	
   

  	
  100

  	
   

  	
  2, 3

  	
   

  	
  65

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Ironwood,
  Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  3

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Kalaeloa
  Venture, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  1,000

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Keystone,
  L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  N/A

  	
   

  	
  100

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES King Harbor,
  Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Londonderry
  Holdings, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  N/A

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES New York
  Funding, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  N/A

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Odyssey,
  L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  1,000

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Oklahoma
  Holdings, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  1,000

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  



 


3

















 


	
  Legal Name

  	
   

  	
  Jurisdiction
  of

  Incorporation

  	
   

  	
  Types of

  Shares

  	
   

  	
  Authorized

  Shares

  	
   

  	
  Outstanding

  Shares

  	
   

  	
  Percentage

  Owned by AES

  	
   

  	
  Certificate

  No.

  	
   

  	
  % Pledged

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Red Oak,
  Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Rio
  Diamante, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Riverside
  Holdings, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Common

  	
   

  	
  1,000

  	
   

  	
  100

  	
   

  	
  100

  	
   

  	
  4

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Sosa, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  65

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Southland
  Funding, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  N/A

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Stonehaven
  Holding, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  3

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Teal
  Holding, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Texas
  Funding III, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  1,000

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  3

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Warrior Run
  Funding, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  N/A

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cavanal
  Minerals, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Common

  	
   

  	
  10

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  2

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IPALCO
  Enterprises, Inc.

  	
   

  	
  Indiana

  	
   

  	
  Common

  	
   

  	
  290,000,000

  	
   

  	
  89,685,177

  	
   

  	
  100

  	
   

  	
  AES-1

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mountainview
  Holding Company, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  1,000

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  1

  	
   

  	
  100

  	
   

  



 


4

















 


	
  Legal Name

  	
   

  	
  Jurisdiction
  of

  Incorporation

  	
   

  	
  Types of

  Shares

  	
   

  	
  Authorized

  Shares

  	
   

  	
  Outstanding

  Shares

  	
   

  	
  Percentage

  Owned by AES

  	
   

  	
  Certificate

  No.

  	
   

  	
  % Pledged

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mountainview
  Power Development Company L.L.C

  	
   

  	
  Delaware

  	
   

  	
  Units

  	
   

  	
  1,000

  	
   

  	
  10

  	
   

  	
  100

  	
   

  	
  5

  	
   

  	
  100

  	
   

  



 


5

















 


PLEDGOR: AES INTERNATIONAL HOLDINGS II, LTD.


 


	
  Legal Name

  	
   

  	
  Jurisdiction
  of

  Incorporation

  	
   

  	
  Types of

  Shares

  	
   

  	
  Authorized

  Shares

  	
   

  	
  Outstanding

  Shares

  	
   

  	
  Percentage

  Owned by AES

  	
   

  	
  Certificate

  No.

  	
   

  	
  % Pledged

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES El Salvador,
  Ltd.

  	
   

  	
  Cayman

  	
   

  	
  Ordinary

  	
   

  	
  50,000

  	
   

  	
  1,000

  	
   

  	
  100

  	
   

  	
  3, 4

  	
   

  	
  65

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES South
  American Holdings, Ltd.

  	
   

  	
  Cayman

  	
   

  	
  Nominal

  	
   

  	
  50,000

  	
   

  	
  5,030

  	
   

  	
  100

  	
   

  	
  3, 4

  	
   

  	
  65

  	
   

  



 


6

















 


Schedule II to the

Amended and Restated Credit,

Reimbursement and Exchange Agreement


 


 


ASSIGNED
AGREEMENTS


 


 


	
  Grantor

  	
   

  	
  Assigned Agreement

  
	
   

  	
   

  	
   

  
	
  The AES Corporation

  	
   

  	
  Tax Sharing Agreement dated as of June 23, 1987 (as
  amended, supplemented or modified through the date hereof) among The AES
  Corporation (formerly known as Applied Energy Services, Inc.), AES Oklahoma
  Management Co., Inc., AES Shady Point, Inc., Combustion Engineering, Inc.,
  and Union Bank of California N.A. (formerly known as Union Bank), as
  successor in interest to Security Pacific National Bank, as agent.

  
	
   

  	
   

  	
   

  
	
  The AES Corporation

  	
   

  	
  Tax Sharing Agreement dated as of March 20, 1990 (as
  amended, supplemented or modified through the date hereof) among The AES
  Corporation (formerly known as Applied Energy Services, Inc.), AES Hawaii
  Management Company, Inc., AES Hawaii, Inc. (formerly known as AES Barbers
  Point, Inc.), and Union Bank of California N.A. (formerly known as Union
  Bank), as successor in interest to Security Pacific National Bank, as agent.

  
	
   

  	
   

  	
   

  
	
  The AES Corporation

  	
   

  	
  Tax Sharing Agreement dated as of March 28, 2001
  among The AES Corporation, IPALCO Enterprises, Inc., and each corporation or
  other entity listed therein.

  



 

















 


SCHEDULE III


 


 


AES CORP.


 


	
  Non-Pledged
  Subsidiary

  	
   

  	
  Jurisdiction of

  Incorporation

  	
   

  	
  Reason for Exclusion

  
	
  AES (India) Private Limited

  	
   

  	
  India

  	
   

  	
  Pledge prohibited

  
	
  AES Americas, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Andes Energy, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Andes, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Angel Falls, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Appalachia, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Aquila, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Atlantic, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Aurora, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Baja Norte I, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Baja Norte II, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Big Sky, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Bolivar, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Brasil Energia, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Brazil, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES BVI Holdings I, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES BVI Holdings II, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Calgary, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Canada, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Caribbean Services, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Cartagena Holdings BV

  	
   

  	
  Netherlands

  	
   

  	
  Pledge prohibited (New holding company for
  Cartagena)

  



 


1

















 


	
  Non-Pledged
  Subsidiary

  	
   

  	
  Jurisdiction of

  Incorporation

  	
   

  	
  Reason for Exclusion

  
	
  AES Central America Power Ventures, Ltd.

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  
	
  AES Chesapeake, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Colombia I, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Mamonal bankrupt and Termocandelaria sold

  
	
  AES Communications Latin America, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Coral, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Desert Power, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Development de Argentina S.A.

  	
   

  	
  Argentina

  	
   

  	
  < $3 million

  
	
  AES Direct, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Dominican Holdings, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Drax Financing II, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Drax Financing, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Drax IBC Limited

  	
   

  	
  Guernsey

  	
   

  	
  < $3 million

  
	
  AES Edelap Funding Corporation, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES El Dorado, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Endeavor, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Energy Mexico, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Enterprise, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Finance and Development, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Generation Holdings, LLC

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Georgia Gas GP, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Global Insurance Company

  	
   

  	
  Vermont

  	
   

  	
  Pledge Prohibited

  
	
  AES Global Power Finance, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES GPH Holdings, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Great Plains, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Greystone Holdings, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Hoytdale, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Huntington Beach Development, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  



 


2

















 


	
  Non-Pledged
  Subsidiary

  	
   

  	
  Jurisdiction of

  Incorporation

  	
   

  	
  Reason for Exclusion

  
	
  AES India, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Indiana Holdings, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES International Holdings II, Ltd.

  	
   

  	
  British Virgin Islands

  	
   

  	
  Pledge prohibited

  
	
  AES Intrepid, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Intricity, Inc.

  	
   

  	
  New Jersey

  	
   

  	
  < $3 million

  
	
  AES Japan, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Korea, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Lake Worth Holdings, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Long Island Holdings, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Mexico Development, S. de
  R.L. de C.V.

  	
   

  	
  Mexico

  	
   

  	
  < $3 million

  
	
  AES Mohave Holdings, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Mongol Services, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Native Hollow, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES New Hampshire Biomass, Inc.

  	
   

  	
  New Hampshire

  	
   

  	
  Pledge prohibited

  
	
  AES Oasis Energy, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Oasis Finco, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Pledge prohibited

  
	
  AES Oasis Holdco, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Pledge prohibited

  
	
  AES Oasis Private Ltd.

  	
   

  	
  Singapore

  	
   

  	
  < $3 million

  
	
  AES Oman Holdings, Ltd

  	
   

  	
  Cayman

  	
   

  	
  Pledge prohibited (New holding company for Barka)

  
	
  AES Orient, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Orissa Distribution Private
  Limited

  	
   

  	
  India

  	
   

  	
  < $3 million

  
	
  AES Pacific, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Pakistan (Pvt) Ltd.

  	
   

  	
  Pakistan

  	
   

  	
  < $3 million

  
	
  AES Pakistan Operations, Ltd.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Parana Generation Holdings, Ltd.

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  
	
  AES Parana II Limited Partnership

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  
	
  AES Pecan Grove II, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  



 


3

















 


	
  Non-Pledged
  Subsidiary

  	
   

  	
  Jurisdiction of

  Incorporation

  	
   

  	
  Reason for Exclusion

  
	
  AES Pecan Grove, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Petty’s Island, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Phoenix Ltd.

  	
   

  	
  Hungary

  	
   

  	
  < $3 million

  
	
  AES PJM, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Power, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Puerto Rico Services, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Pumped Storage Arkansas, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Redfish, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Sao Paulo, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Services, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Silk Road Cayman Ltd.

  	
   

  	
  Cayman

  	
   

  	
  Pledge prohibited (New holding company for Telasi)

  
	
  AES Silk Road, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Songas Holdings, Ltd.

  	
   

  	
  Cayman

  	
   

  	
  Pledge prohibited (New holding company for Songas)

  
	
  AES South City, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Telecom Americas, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Taiwan, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Telecom Development, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Tiete Holdings, Ltd.

  	
   

  	
  Cayman

  	
   

  	
  Pledge prohibited

  
	
  AES Transgas, LLC

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Transpower Australia Pty Ltd.

  	
   

  	
  Australia

  	
   

  	
  < $3 million

  
	
  AES Transpower Private Ltd.

  	
   

  	
  Singapore

  	
   

  	
  < $3 million

  
	
  AES Transpower, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Pledge prohibited

  
	
  AES UK Power Holdings Limited

  	
   

  	
  United Kingdom

  	
   

  	
  < $3 million

  
	
  AES UK Power, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES-Zemplen Ltd.

  	
   

  	
  Hungary

  	
   

  	
  < $3 million

  
	
  GeoUtilities, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  



 


4

















 


	
  Non-Pledged
  Subsidiary

  	
   

  	
  Jurisdiction of

  Incorporation

  	
   

  	
  Reason for Exclusion

  
	
  La Plata II, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Already pledged; no secondary pledges permitted

  
	
  La Plata III, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Already pledged; no secondary pledges permitted

  
	
  LW Generation Corporation

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  Star Natural Gas Company

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  AES Ecotek International Holdings, Inc.

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  
	
  Thermo Fuels Company, Inc.

  	
   

  	
  California

  	
   

  	
  < $3 million

  
	
  ThinkAES, Inc.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  Totem Gas Storage Company, LLC

  	
   

  	
  Colorado

  	
   

  	
  Pledge prohibited

  
	
  Totem Power, LLC

  	
   

  	
  Colorado

  	
   

  	
  < $3 million

  
	
  Transmission Management
  Services, L.L.C.

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  
	
  West County Generation, LLC

  	
   

  	
  Delaware

  	
   

  	
  < $3 million

  



 


5



















 


AES INTERNATIONAL
HOLDINGS II, LTD.


 


	
  Non-Pledged
  Subsidiary

  	
   

  	
  Jurisdiction
  of

  Incorporation

  	
   

  	
  Reason for
  Exclusion

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Argentina Operations, Ltd.

  	
   

  	
  Cayman

  	
   

  	
  Already pledged; no
  secondary pledge permitted

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Bandeirante, Ltd.

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Caracoles I

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Caracoles II

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Cayman Guaiba, Ltd.

  	
   

  	
  Cayman

  	
   

  	
  Pledge prohibited

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Cayman Pampas, Ltd.

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Communications, Ltd.

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Costa Rica
  Hydroelectrica, Ltd.

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Infoenergy Ltda

  	
   

  	
  Brazil

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Intercon II, Ltd.

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Intercon, Ltd.

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Interenergy, Ltd.

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Merida Management Services S. de R.L. de C.V.

  	
   

  	
  Mexico

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Mid East Holdings 3, Ltd.

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Network

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Pak Gen Holdings, Inc.

  	
   

  	
  Mauritius

  	
   

  	
  Pledge prohibited

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Pak Holdings, Ltd.

  	
   

  	
  British Virgin Islands

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Pakistan Holdings

  	
   

  	
  Mauritius

  	
   

  	
  Pledge prohibited

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Parana IHC, Ltd.

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Peru S.R.L.

  	
   

  	
  Peru

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Santa Ana, Ltd.

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Santa Branca, Ltd.

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Servicios Electricos
  Limitada de Capital Variable

  	
   

  	
  El Salvador

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES South Point, Ltd.

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  	
   

  



 


6

















 


	
  Non-Pledged
  Subsidiary

  	
   

  	
  Jurisdiction
  of

  Incorporation

  	
   

  	
  Reason for
  Exclusion

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Telecomunicaciones
  Salvadorenas Ltda de CV

  	
   

  	
  El Salvador

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Transpower, Inc.

  	
   

  	
  Mauritius

  	
   

  	
  Pledge prohibited

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES Yucatan S.R.L. de C.V.

  	
   

  	
  Mexico

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CCS Telecarrier

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Delta Capex Investments

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wildwood Funding, Ltd.

  	
   

  	
  Cayman

  	
   

  	
  < $3 million

  	
   

  



 


7

















 


SCHEDULE IV: EXCLUDED AES
ENTITIES


 


	
  BRAZIL

  
	
  AES South
  American Holdings, Ltd.

  
	
  AES Americas
  Participacoes, Ltda.

  
	
  AES Bandierante Ltd.

  
	
  AES Bandierante Empreendimentos, Ltda.

  
	
  AES Brazilian Holdings, Ltd.

  
	
  AES Bridge
  I, Ltd.

  
	
  AES Bridge
  II, Ltd.

  
	
  AES Cayman
  Guaiba, Ltd.

  
	
  AES Cayman I

  
	
  AES Cayman
  II

  
	
  AES Cayman
  Pampas, Ltd.

  
	
  AES Cemig
  Empreendimentos II, Ltd.

  
	
  AES Cemig
  Empreendimentos, Inc.

  
	
  AES Communications Rio de Janeiro S.A.

  
	
  AES Communications Latin America, Inc.

  
	
  AES Com Sul Ltda.

  
	
  AES Coral Reef, LLC

  
	
  AES Edeersa, Ltd.

  
	
  AES Eletrolight, Ltd.

  
	
  AES Elpa S.A.

  
	
  AES Energia, Ltda.

  
	
  AES Energia I, Ltd.

  
	
  AES Energia II, Ltd.

  
	
  AES Florestal Ltda.

  
	
  AES Forca Ltd.

  
	
  AES Forca II, Ltd.

  
	
  AES Forca Empreendimentos Ltda.

  
	
  AES Guaiba II Empreendimentos Ltda.

  
	
  AES Holdings Brasil, Ltda.

  
	
  AES IHB Cayman, Ltd.

  
	
  AES Infoenergy Ltda.

  
	
  AES Intercon, Ltd.

  
	
  AES Intercon II, Ltd.

  
	
  AES Interenergy, Ltd.

  
	
  AES International Holdings III, Ltd.

  
	
  AES Minas PCH Ltda.

  
	
  AES Network

  
	
  AES Santa Branca I, Ltd.

  
	
  AES Santa Branca II, Ltd.

  
	
  AES Sul, SA

  
	
  AES Tiete
  Holdings Ltd.

  



 


1

















 


	
  AES Tiete
  Holdings II, Ltd.

  
	
  AES Tiete Empreendimentos S.A.

  
	
  AES Tiete Participacoes S.A.

  
	
  AES Trade I, Ltd.

  
	
  AES Trade II, Ltd.

  
	
  AES Trading Ltda.

  
	
  AES Transgas Empreendimentos S.A.

  
	
  AES Transgas I, Ltd.

  
	
  AES Transgas II, Ltd.

  
	
  AES Treasure Cove, Ltd.

  
	
  AES Uruguaiana Empreedimentos S.A.

  
	
  AES Uruguaiana, Inc.

  
	
  Asteroid I, Ltd.

  
	
  Brasiliana Energia S.A.

  
	
  Cayman Energy Traders

  
	
  Companhia de Gas de Minas Gerais, S.A.

  
	
  Companhia Energetica de Minas Gerais, S.A.

  
	
  Compania de Geracao de Energia Eletrica Tiete, S.A.

  
	
  AES Tiete S.A.

  
	
  Eletroger Ltda.

  
	
  Eletronet S.A.

  
	
  Eletropaulo Comercial Exportadora, Ltda.

  
	
  Eletropaulo Metropolitana Eletricidade de Sao Paulo S.A.

  
	
  Eletropaulo Telecomunicacoes, Ltda.

  
	
  Empresa de Infovias, S.A.

  
	
  Energia Paulista Participacoes, S.A.

  
	
  ENET Telecomunicacoes Ltda.

  
	
  Logestic.com S.A.

  
	
  Metropolitana Overseas II, Ltd.

  
	
  Pleasantville Participacoes Ltda.

  
	
  Southern Electric Brazil Participacoes, Ltda.

  
	
   

  
	
  ARGENTINA

  
	
  AES Alicura Holdings S.C.A.

  
	
  AES Andes Energy, Inc.

  
	
  AES
  Argentina Investments, Ltd.

  
	
  AES
  Argentina Investments II, Ltd.

  
	
  AES
  Argentina Operations, Ltd.

  
	
  AES Argentina, Inc.

  
	
  AES Asociados S.A.

  
	
  AES Caracoles I

  
	
  AES Caracoles II

  
	
  AES Caracoles III, L.P.

  
	
  AES Caracoles S.R.L.

  



 


2

















 


	
  AES Chaparron I, Ltd.

  
	
  AES Chaparron II, Ltd.

  
	
  AES Development de Argentina S.A.

  
	
  AES Energy, Ltd.

  
	
  AES Ocean Springs, Ltd.

  
	
  AES Operadora S.A.

  
	
  AES Parana Gas S.A.

  
	
  AES Parana Holdings, Ltd.

  
	
  AES Parana I Limited Partnership

  
	
  AES Parana II Limited Partnership

  
	
  AES Parana IHC, Ltd.

  
	
  AES Parana
  Generation Holdings, Ltd.

  
	
  AES Parana Operations S.R.L.

  
	
  AES Parana Propiedades S.A.

  
	
  AES Parana S.C.A.

  
	
  AES Rio Diamate, Inc.

  
	
  AES San Nicolas Holding Espana, S.L.

  
	
  AES San Nicolas, Inc.

  
	
  AES South Point, Ltd.

  
	
  AESEBA S.A.

  
	
  Asociados de Electricidad, S.A.

  
	
  B.A. Services.com S.R.L.

  
	
  Camille, Ltd.

  
	
  Central Dique, S.A.

  
	
  Central Termica San Nicolas S.A.

  
	
  CMS Generation San Nicolas Company

  
	
  Compania de Inversiones en Eletricidad, S.A.

  
	
  Empresa Distribuidora de Energia Norte S.A.

  
	
  Empresa Distribuidora de Energia Sur S.A.

  
	
  Empresa Distribuidora La Plata, S.A.

  
	
  Gasoducto GasAndes Argentina S.A.

  
	
  Gener Argentina S.A.

  
	
  AES Alicura, S.A.

  
	
  Hidroelectrica Rio Juramento, S.A.

  
	
  InterAndes, S.A.

  
	
  Inversora AES Ameritas Holding Espana Espana, S.L.

  
	
  Inverorsa de San Nicolas S.A.

  
	
  Inversora AES Americas, S.A.

  
	
  La Plata II, Inc.

  
	
  La Plata III, Inc.

  
	
  La Plata Partners L.P.

  
	
  Luz del Plata S.A.

  
	
  AES Pampa
  Energy, S.A.

  



 


3

















 


	
  Shazia
  S.R.L.

  
	
  TermoAndes
  S.A.

  
	
  Wildwood
  Funding, Ltd.

  
	
  Wildwood I,
  Ltd.

  
	
  Wildwood II,
  Ltd.

  



 


4

















 


SCHEDULE
5.15: EXISTING AGREEMENTS WITH AFFILIATES


 


None.


 

















 


SCHEDULE V:  QUALIFIED HOLDING
COMPANIES


 


	
  AES Alicura
  Holdings S.C.A.

  
	
  AES
  Aramtermelo Holdings BV

  
	
  AES Baltic
  Holdings BV

  
	
  AES Barka
  Services 1 (Cayman) Ltd.

  
	
  AES Barka
  Services 2 (Cayman) Ltd.

  
	
  AES Bridge I
  Ltd.

  
	
  AES Bridge
  II Ltd.

  
	
  AES Cemig
  Empreendimentos, Inc.

  
	
  AES Central
  American Mgmt Services, Inc.

  
	
  AES
  Chaparron I, Ltd.

  
	
  AES
  Chaparron II, Ltd.

  
	
  AES Chigen
  Holdings Ltd.

  
	
  AES Denmark
  GP Holding I ApS

  
	
  AES Denmark
  GP Holding II ApS

  
	
  AES
  Development de Argentina, S.A.

  
	
  AES Electric
  Ltd.

  
	
  AES Gas
  Holdco (Cayman) Ltd.

  
	
  AES Global
  Power Holdings BV

  
	
  AES
  International Holdings Ltd.

  
	
  AES Isthmus Energy, S.A.

  
	
  AES LNG
  Holding II, Ltd.

  
	
  AES Medway
  Electric Ltd.

  
	
  AES Nigeria
  Holdings Ltd.

  
	
  AES Oasis
  Holdco (Cayman) Ltd.

  
	
  AES Oman
  Holdings Ltd.

  
	
  AES Panama
  Holding Ltd.

  
	
  AES Qatar
  Holdings Ltd.

  
	
  AES San
  Nichols Holding Espana S.L.

  
	
  AES Silk
  Road Cayman Ltd.

  
	
  AES Sirocco
  Holdings BV

  
	
  AES Songas
  Holdings Ltd.

  
	
  AES Summit
  Generation Ltd.

  
	
  AES Tisza
  Holdings BV

  
	
  AES UK Power
  Holdings Ltd.

  
	
  Global
  Energy Holdings CV

  
	
  Inversora AES Americas, S.A.

  
	
  Inversora de San Nicolas S.A.

  
	
  Inversora AES Americas Holding Espana, S.L.

  
	
  Mercury
  Cayman Holdco, Ltd.

  



 

















 


Schedule
VI - Existing Debt


 


	
   

  	
   

  	
  Amount

  	
   

  
	
  Sr. Secured First Priority Notes due 2005

  	
   

  	
  155,718,000

  	
   

  
	
  Sr. Secured Second Priority Notes due 2013

  	
   

  	
  1,200,000,000

  	
   

  
	
  Sr. Secured Second Priority Notes due 2015

  	
   

  	
  600,000,000

  	
   

  
	
  Senior Notes due June 2008

  	
   

  	
  223,262,000

  	
   

  
	
  Senior Notes due June 2009

  	
   

  	
  310,097,040

  	
   

  
	
  Senior Notes due June 2009

  	
   

  	
  159,746,960

  	
   

  
	
  Senior Notes due September 2010

  	
   

  	
  422,665,000

  	
   

  
	
  Senior Notes due January 2011

  	
   

  	
  313,186,000

  	
   

  
	
  Senior Notes due February 2011 (£)*

  	
   

  	
  160,809,856

  	
   

  
	
  Senior Notes due March 2014

  	
   

  	
  500,000,000

  	
   

  
	
  Senior Subordinated Notes due August 2007

  	
   

  	
  169,619,000

  	
   

  
	
  Senior Subordinated Notes due November 2007

  	
   

  	
  218,949,000

  	
   

  
	
  Senior Subordinated Notes due November 2029

  	
   

  	
  115,258,000

  	
   

  
	
  Junior Convertible Debentures due August
  2005

  	
   

  	
  142,134,000

  	
   

  
	
  Guarantees of Debt

  	
   

  	
  155,503,000

  	
   

  
	
  Letters of Credit outside Revolving Credit
  Facility

  	
   

  	
  18,750,000

  	
   

  
	
  Surety Bonds

  	
   

  	
  3,682,870

  	
   

  
	
  Total Debt

  	
   

  	
  4,869,380,726

  	
   

  



 












*
Exchange Rate of  1.7995 on March 9,
2003


 

















 


SCHEDULE VII to the


Third
Amended and Restated


Credit
and Reimbursement Agreement


 


REVOLVING
FRONTING BANKS


 


	
  Citicorp USA, Inc.

  
	
   

  
	
  Bank of America, N.A.

  
	
   

  
	
  Deutsche Bank Trust Company
  Americas

  
	
   

  
	
  Lehman Commercial Paper, Inc.

  
	
   

  
	
  UBS AG, Stamford Branch

  
	
   

  
	
  Union Bank of California, N.A.

  
	
   

  
	
  Credit Lyonnais New York Branch

  
	
   

  
	
  Société Générale – New York Branch

  



 

















 


EXHIBIT A-1 to the


Third
Amended and Restated Credit


and
Reimbursement Agreement


 


FORM OF
REVOLVING CREDIT LOAN NOTE


 


	
  New York,
  New York

  	
   

  	
  , 2004

  



 


For value received, The AES Corporation, a Delaware
corporation (the “Borrower”),
promises to pay to 
               
(the “Bank”) or its registered
assigns, for the account of its Applicable Lending Office (as defined in the
Credit and Reimbursement Agreement referred to below), the unpaid principal
amount of each Revolving Credit Loan (as defined in the Credit and
Reimbursement Agreement referred to below) made by the Bank to the Borrower
pursuant to the Credit and Reimbursement Agreement referred to below on the
dates and in the amounts specified in the Credit and Reimbursement
Agreement.  The Borrower promises to pay
interest on the unpaid principal amount of each such Loan on the dates and at
the rate or rates provided for in the Credit and Reimbursement Agreement.  All such payments of principal and interest
shall be made in lawful money of the United States in Federal or other same day
funds at the place of payment specified in the Credit and Reimbursement
Agreement.


 


All Revolving Credit Loans made by the Bank, the
respective types thereof and all repayments of the principal thereof shall be
recorded by the Bank and, if the Bank so elects in connection with any transfer
or enforcement hereof, appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding may be endorsed by
the Bank on the schedule attached hereto, or on a continuation of such schedule
attached to and made a part hereof; provided
that the failure of the Bank to make (or any error in making) any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit and Reimbursement Agreement.


 


This Revolving Credit Loan Note is one of the Notes
referred to in the Third Amended and Restated Credit and Reimbursement
Agreement dated as of March 17, 2004 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Credit and Reimbursement Agreement”) among
the Borrower, the Subsidiary Guarantors party thereto, the Bank and certain
other banks party thereto, Citicorp USA, Inc., as the Agent for the Bank
Parties and Citibank, N.A. as the Collateral Agent for the Bank Parties.  Terms defined in the Credit and
Reimbursement Agreement are used herein with the same meanings.  Reference is made to the Credit and
Reimbursement Agreement for provisions for the guarantee hereof in certain
circumstances, the prepayment hereof and the acceleration of the maturity
hereof.


 

















 


This Revolving Credit Loan Note is assignable to one
or more Persons as provided in the Credit and Reimbursement Agreement and the
Borrower agrees to issue from time to time replacement Notes in the form hereof
to facilitate such assignments.


 


The Obligations of the Borrower under this Revolving
Credit Loan Note and the other Financing Documents, and the Obligations of the
other Loan Parties under the Financing Documents, are secured by the Creditor
Group Collateral as provided in the Financing Documents.  The Obligations of the Borrower under this
Revolving Credit Loan Note are also guaranteed by the Subsidiary Guarantors, as
provided in the Subsidiary Guaranty in Article IX of the Credit and
Reimbursement Agreement.


 


This Revolving Credit Loan Note shall be governed by,
and construed in accordance with, the laws of the State of New York.


 


	
   

  	
  THE AES
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By 

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


LOANS AND PAYMENTS OF PRINCIPAL


 


	
  Date

  	
   

  	
  Amount of

  Loan

  	
   

  	
  Type of
  Loan

  	
   

  	
  Amount of

  Principal

  Repaid

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


EXHIBIT A-2 to the


Third
Amended and Restated Credit


and
Reimbursement Agreement


 


FORM OF
TERM LOAN NOTE


 


	
  New York,
  New York

  	
   

  	
  , 2004

  



 


For value received, The AES Corporation, a Delaware
corporation (the “Borrower”),
promises to pay to 
                                       
(the “Bank”) or its registered
assigns, for the account of its Applicable Lending Office (as defined in the
Credit and Reimbursement Agreement referred to below), the unpaid principal
amount of the Term Loan (as defined in the Credit and Reimbursement Agreement
referred to below) made by the Bank to the Borrower pursuant to the Credit and
Reimbursement Agreement referred to below on the dates and in the amounts
specified in the Credit and Reimbursement Agreement.  The Borrower promises to pay interest on the unpaid principal
amount of the Term Loan on the dates and at the rate or rates provided for in
the Credit and Reimbursement Agreement. 
All such payments of principal and interest shall be made in lawful
money of the United States in Federal or other same day funds at the place of
payment specified in the Credit and Reimbursement Agreement.


 


This Term Loan Note is one of the Notes referred to in
the Third Amended and Restated Credit and Reimbursement Agreement dated as of
March 17, 2004 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Credit and
Reimbursement Agreement”) among the Borrower, the Subsidiary
Guarantors party thereto, the Bank and certain other banks party thereto,
Citicorp USA, Inc., as the Agent for the Bank Parties and Citibank, N.A., as
the Collateral Agent for the Bank Parties. 
Terms defined in the Credit and Reimbursement Agreement are used herein
with the same meanings.  Reference is made
to the Credit and Reimbursement Agreement for provisions for the guarantee hereof
in certain circumstances, the prepayment hereof and the acceleration of the
maturity hereof.


 


This Term Loan Note is assignable to one or more
Persons as provided in the Credit and Reimbursement Agreement and the Borrower
agrees to issue from time to time replacement Notes in the form hereof to
facilitate such assignments.


 


The Obligations of the Borrower under this Term Loan
Note and the other Financing Documents, and the Obligations of the other Loan
Parties under the Financing Documents, are secured by the Creditor Group
Collateral as provided in the Financing Documents.  The Obligations of the Borrower under this Term Loan Note are
guaranteed by the Subsidiary Guarantors, as provided in the Subsidiary Guaranty
in Article IX of the Credit and Reimbursement Agreement.


 

















 


This Term Loan Note shall be governed by, and
construed in accordance with, the laws of the State of New York.


 


 


	
   

  	
  THE AES
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


LOANS AND PAYMENTS OF PRINCIPAL


 


	
  Date

  	
   

  	
  Amount of

  Loan

  	
   

  	
  Type of
  Loan

  	
   

  	
  Amount of

  Principal

  Repaid

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


March 17, 2004


 


To the Banks


Listed on Schedule 1 hereto


 


Ladies and Gentlemen:


 


I am the Assistant General
Counsel of The AES Corporation (the “Company”), a corporation organized and
existing under the laws of the State of Delaware, and have acted as counsel for
the Company, each of the Subsidiary Guarantors (as defined in the Credit
Agreement referred to below) and AES International Holdings II, Ltd. in
connection with (i) the Third Amended and Restated Credit and Reimbursement
Agreement (the “Credit Agreement”) dated as of March 17, 2004 among AES, the
Subsidiary Guarantors party thereto (the “Subsidiary Guarantors”), the banks
party thereto (the “Bank Parties”), Citicorp USA, Inc., as Administrative
Agent, and Citibank, N.A. as Collateral Agent for the Bank Parties and (ii)
Amendment No. 2 to the Collateral Trust Agreement (as defined in the Credit
Agreement, and together with the Credit Agreement, the “Documents”).  The Company and the Subsidiary Guarantors
are sometimes hereinafter referred to as the “Delaware Loan Parties” and each
as a “Delaware Loan Party.”  Terms in
the Credit Agreement are used herein as therein defined.  This opinion is being furnished to you
pursuant to Section 3.01(c)(i) of the Credit Agreement.


 


In rendering this opinion, I
have examined, and relied on, subject to the assumptions and qualifications
herein, executed counterparts of each of the Documents and such agreements,
instruments and documents and have conducted such investigations of law as I
have deemed necessary or appropriate as a basis for the opinions hereafter
expressed.  As to questions of fact
material to this opinion, I have, when relevant facts were not independently
established, relied upon certificates of appropriate public officials and
officers and representatives of the Company and other appropriate persons, and
upon the factual representations or statements made by these persons or in the
Documents.  In all such examinations, I
have assumed, without independent verification the authenticity and
completeness of documents purporting to be originals (whether examined in
original, facsimile or copy form), the conformity to originals of documents purporting
to be photostatic or facsimile copies of originals, and the genuineness of all
signatures.


 


I make no observations and
give no opinion in relation to any contract, instrument or document other than
the Documents (whether or not referred to in the Documents) nor have I made any
enquiries concerning any party to the Documents, or other person or entity,
other than the Company.


 


This opinion is strictly
limited to the matters stated in it and is not to be read as extending by
implication to any other matter or any other contract,


 


1

















 


instrument or document executed in connection with the Documents or the
transactions contemplated by them or otherwise.


 


On the basis of the
foregoing, and having regard for such legal considerations as I deem relevant,
I am of the opinion that:


 


(i)         Each Delaware 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 Delaware and has all corporate or other organizational powers and, to
my knowledge, all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted;


 


(ii)        The execution, delivery and
performance by each Delaware Loan Party of the Documents and the Notes to which
it is a party are within such Delaware 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 and do not (i) contravene, or
constitute a default under, any provision of (1) the certificate of
incorporation (or certificate of formation, as applicable) or by-laws (or other
organizational documents, as applicable) of such Delaware Loan Party or (2) to
my knowledge, (A) any law or regulation applicable to any Delaware Loan Party
or (B) any judgment, injunction, order or decree binding upon any Delaware Loan
Party or (C) any agreement or instrument evidencing or governing any Debt of
any Delaware Loan Party in the amount of $25,000,000 or more (“Specified Debt”)
or (ii) result in or require the creation or imposition of any lien or any
asset of any Delaware Loan Party under any agreement or instrument evidencing
or governing any Specified Debt; and


 


(iii)       Except for Disclosed
Matters, there is no action, suit, investigation of which the Company has
notice, litigation or proceeding pending against, or to my knowledge threatened
against, the Company 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 Document.


 


I am a member of the Bar of
the District of Columbia, however, this opinion relates solely to the General
Corporation Law of the State of Delaware and the federal laws of the United
States as at the date and time of its issue. 
I have made no investigation of, and neither express nor imply any
opinion with respect to the laws of any state or jurisdiction other than the
General Corporation Law of the State of Delaware and the federal laws of the
United States.


 


This opinion may be relied
upon solely by each of the addressees hereto, and may not be relied upon by any
other person, nor used, circulated, quoted or otherwise referred to for any
other purpose, without my prior written consent,


 


2

















 


except that any Person that becomes a Bank Party in accordance with
Section 10.06 of the Credit Agreement may rely upon this opinion as if it were
specifically addressed and delivered to such Person on the date hereof.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Vincent W. Mathis

  
	
   

  	
  Assistant General Counsel

  



 


3

















 


Schedule 1


 


	
  The Banks,
  Citicorp USA, Inc., as Administrative Agent and

  
	
  Citibank,
  N.A., as Collateral Agent

  
	
  c/o Citicorp
  USA, Inc., as Administrative Agent

  
	
  388
  Greenwich Street, 21st Floor

  
	
  New York, NY
  10013

  
	
  Attention:
  Stuart Glen

  
	
   

  
	
  Wilmington
  Trust Company, as Corporate Trustee

  
	
  Rodney
  Square North

  
	
  1100 North
  Market Street

  
	
  Wilmington,
  DE 19890

  
	
  Attention:
  Corporate Trust Division

  
	
   

  
	
  Bruce L.
  Bisson, as Individual Trustee

  
	
  Rodney
  Square North

  
	
  1100 North
  Market Street

  
	
  Wilmington,
  DE 19890

  
	
  Attention:
  Corporate Trust Division

  



 

















 


March 17, 2004


 


	
  To the Bank
  Parties

  
	
  and the Administrative Agent

  
	
  and the Collateral Agent referred to Below

  
	
  c/o Citicorp
  USA, Inc. as Administrative Agent

  
	
  388
  Greenwich Street, 21st Floor

  
	
  New York, NY
  10013

  
	
   

  
	
  Wilmington
  Trust Company

  
	
  as Corporate Trustee

  
	
  Rodney
  Square North

  
	
  1100 North
  Market Street

  
	
  Wilmington,
  DE 19890

  
	
  attn:
  Corporate Trust Division

  
	
   

  
	
  Bruce L.
  Bisson

  
	
  as Individual Trustee

  
	
  Rodney
  Square North

  
	
  1100 North
  Market Street

  
	
  Wilmington,
  DE 19890

  



 


Ladies and Gentlemen:


 


We have participated in the
preparation of the Third Amended and Restated Credit and Reimbursement
Agreement dated as of March 17, 2004 (the “Credit Agreement”) among The AES
Corporation, a Delaware corporation (“AES”), the Subsidiary Guarantors party
thereto (the “Subsidiary Guarantors”), the banks party thereto (the “Bank Parties”)
and Citicorp USA, Inc., as Administrative Agent (in such capacity, the “Administrative
Agent”), and Citibank, N.A. as Collateral Agent for the Bank Parties
(in such capacity, the “Collateral Agent”).  We have acted as special New York counsel
for AES and


 

















 


its subsidiaries for the purpose of rendering this opinion pursuant to
Section 3.01(c)(ii) of the Credit Agreement. 
Terms used (but not defined) herein have the meanings assigned to them
in the Credit Agreement.


 


We have reviewed executed
copies of:


 


(a)        the Credit Agreement;


 


(b)        the Notes issued on the date
hereof (the “Notes”); and


 


(c)        Amendment No. 2 dated as of
March [  ], 2004 to the Collateral Trust
Agreement dated as of December 12, 2002 (as amended, the “Collateral Trust Agreement”)
among AES, AES International Holdings II, Ltd. (“AES BVI II”), Wilmington
Trust Company, as corporate trustee (the “Corporate Trustee”) and Bruce L. Bisson, as
individual trustee (together with the Corporate Trustee, the “Collateral
Trustees”).


 


The documents listed in
items (a) through (c) above are sometimes hereinafter referred to as the “Credit Documents”.  AES, the Subsidiary Guarantors and AES BVI
II are sometimes hereinafter referred to collectively as the “Loan Parties” and each individually as a “Loan Party”.


 


We have also examined
originals or copies, certified or otherwise identified to our satisfaction, of
such documents, corporate records and certificates of public officials and
officers of AES and have conducted such other investigations of fact and law as
we have deemed necessary or advisable for purposes of this opinion.


 


Based on the foregoing, and
subject to the assumptions and qualifications set forth below, we are of the
opinion that:


 


1.             The execution, delivery and
performance by each Loan Party of each Credit Document to which it is a party
require no action by or in respect of, or filing with, any governmental body,
agency or official under United States federal or New York State law (other
than filings and recordings to perfect security interests granted) and do not
contravene, or constitute a default under, any provision of applicable United
States federal or New York State law or regulation, in each case that in our
experience is normally applicable to general business corporations in relation
to transactions of the type contemplated by the Credit Documents.


 


2

















 


2.             Each Credit Document (other
than the Notes) constitutes a valid and binding agreement of each Loan Party
thereto and each Note, when duly executed and delivered in accordance with the
terms of the Credit Agreement, will constitute a valid and binding obligation
of AES, in each case enforceable against such Loan Party or AES in accordance
with its terms.


 


3.             The Security Agreement dated
as of December 12, 2002 (as amended, the “Security Agreement”) made by AES to the
Collateral Trustees is effective to create, in favor of the Collateral Trustees
for the benefit of the Secured Holders, as security for the Secured Obligations,
a valid security interest (the “AES Security
Interest”) in the right, title and interest of AES in that portion
of the Collateral, as defined in the Security Agreement, described therein in
which a security interest may be created pursuant to Article 9 of the Uniform
Commercial Code as in effect in the State of New York on the date hereof (the “UCC”).


 


4.             Assuming that the
certificates evidencing the Pledged Equity and instruments constituting the
Pledged Debt, in each case indorsed by an appropriate person in blank or
accompanied by instruments of transfer or assignment in blank duly executed by
an appropriate person, have been delivered on or prior to the date hereof to
the Collateral Trustees, and have been continuously held by the Collateral Trustees
since such delivery, in each case in the State of New York, (i) the AES
Security Interest in the Pledged Equity and the Pledged Debt is perfected, and
(ii) the Collateral Trustees have, for the benefit of the Secured Holders,
control (within the meaning of Section 8-106 of the UCC) of such Pledged Equity
and such Pledged Debt.


 


5.             None of the Loan Parties is
required to register as an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.


 


The foregoing opinions are
subject to the following qualifications:


 


(i)         Our opinions in
paragraphs 2 through 4 above are subject to applicable bankruptcy, insolvency
and similar laws affecting creditors’ rights generally and equitable principles
of general applicability.


 


(ii)        We express no opinion as
to the effect of fraudulent conveyance, fraudulent transfer or similar
provisions of applicable law on the conclusions expressed above.


 


3

















 


(iii)       We express no opinion as to
the effect (if any) of any law of any jurisdiction (except the State of New
York) in which any Bank Party is located which may limit the rate of interest
that such Bank Party may charge or collect.


 


(iv)       We express no opinion as to
provisions in the Credit Documents that purport to (1) indemnify any Person for
its own gross negligence or willful misconduct or (2) confer upon any Person
the right to require specific performance or to receive liquidated damages.


 


(v)        We express no opinion as
to provisions in the Credit Documents that purport to create rights of set-off
in favor of participants or that provide for set-off to be made otherwise than
in accordance with applicable laws.


 


(vi)       We express no opinion as to
provisions in the Credit Documents that purport to waive objections to venue,
claims that a particular jurisdiction is an inconvenient forum or the like.


 


(vii)      We express no opinion as to
whether a United States federal court would have subject-matter or personal
jurisdiction over a controversy arising under the Credit Documents.


 


(viii)     We express no opinion as to
the right, title or interest of any Loan Party in or to any collateral or the
value given therefor.


 


(ix)       Except as expressly set
forth in paragraphs 3 and 4 above, we express no opinion as to the creation,
attachment, perfection or priority of any security interest.


 


(x)        We note the possible
unenforceability in whole or in part of certain remedial provisions of the
Security Agreement and the Collateral Trust Agreement (the “Collateral
Documents”), although the inclusion of such provisions does not render the
Collateral Documents invalid and, subject, to the extent applicable, to Section
9-408(c) of the UCC, each of the Collateral Documents contains, in our
judgment, adequate remedial provisions for the practical realization of the
rights and benefits afforded thereby. 
In addition, we note 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 of AES 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.


 


4

















 


(xi)       Any security interest in
proceeds is subject to the limitations set forth in Section 9-315 of the UCC.


 


(xii)      We express no opinion as to
provisions in the Credit Documents which subject the Loan Parties to any claim
for deficiency resulting from a judgment being rendered in a currency other
than the currency called for in the Credit Documents, and we express no opinion
as to (i) whether a New York State or United States federal court would render
or enforce a judgment in a currency other than U.S. Dollars or (2) the exchange
rate that such a court would use in rendering a judgment in U.S. Dollars in
respect of an obligation in any other currency.


 


(xiii)     We express no opinion as to
any regulatory scheme applicable to, or any license or permit required in
connection with, the businesses conducted by AES or its subsidiaries and our
opinions expressed in paragraph (A) above relate only to laws, actions and
filings, which, in our experience, are normally applicable to general business
corporations in relation to transactions of the type contemplated by the Credit
Documents and, in particular, we express no opinion as to the Federal Power Act
or any other energy or electricity law or any rule or regulation thereunder or
any law, rule or regulation applicable to, or any approval given or required to
be given by, the Federal Energy Regulatory Commission.


 


The foregoing opinion is
limited to the laws of the State of New York and the federal laws of the United
States of America.  We have assumed that
(i) each of the Loan Parties is validly existing and, to the extent applicable,
in good standing under the laws of its jurisdiction of organization, and (ii)
the execution, delivery and performance by each Loan Party of each Credit
Document to which it is a party are within its corporate powers, have been duly
authorized by all necessary corporate action on the part of such Loan Party and
do not contravene the articles or certificate of incorporation or bylaws or
other constitutive documents of such Loan Party.  We have further assumed that each Loan Party has duly executed
and delivered each Credit Document to which it is a party.


 


This opinion is delivered to
you in connection with the above matter. This opinion may not be relied upon by
you for any other purpose or relied upon by any other person without our prior
written consent, except that any person that becomes a Bank Party in accordance
with the provisions of Section 10.06(c) of the Credit Agreement may rely upon
this opinion as if it were specifically addressed and delivered to such person
on the date hereof.


 


	
   

  	
  Very truly
  yours,

  



 


5

















 


EXHIBIT B-3 to the 


Third Amended and Restated


Credit and Reimbursement Agreement


 


FORM
OF OPINION OF

[LAW FIRM NAME]

COUNSEL FOR [SUBSIDIARY NAME]


 


	
  March 17, 2004

  
	
   

  
	
  To the Banks
  and the Agent referred to below

  
	
  c/o Citicorp
  USA, Inc., as Administrative Agent

  
	
  388
  Greenwich Street, 21st Floor

  
	
  New York,
  New York 10013

  
	
   

  
	
  Wilmington
  Trust Company

  
	
  as Corporate Trustee

  
	
  Rodney
  Square North

  
	
  1100 North
  Market Street

  
	
  Wilmington,
  DE 19890

  
	
  Attn:
  Corporate Trust Division

  
	
   

  
	
  Bruce L.
  Bisson

  
	
  as Individual Trustee

  
	
  Rodney
  Square North

  
	
  1100 North
  Market Street

  
	
  Wilmington,
  DE 19890

  



 


Dear Sirs:


 


We have acted as counsel to
[Subsidiary Name] (the “Company”) and its Subsidiaries, in
connection with the Third Amended and Restated Credit and Reimbursement
Agreement (the “Credit Agreement”), dated as of March 17, 2004 among The AES
Corporation, a Delaware corporation (“AES”), the Subsidiary Guarantors party
thereto, the Banks party thereto (the “Bank Parties”) and Citicorp USA, Inc. as
Administrative Agent and as Collateral Agent for the Bank Parties (the “Agent”).  Terms used (but not defined) herein have the
meanings assigned to them in the Credit Agreement.  This opinion is being delivered to you pursuant to Section
3.01(c)(iii) of the Credit Agreement.


 


We have reviewed copies of:


 

















 


(a)                                  the Credit
Agreement [(including, without limitation, the Subsidiary Guaranty in Article
IX thereof (the “Guaranty”)] (1);


 


(b)                                 the Security
Agreement dated as of December 12, 2002, as amended by Amendment No. 1 to the
Security Agreement, dated as of July 29, 2003 (the “Security Agreement”) made by AES to the Collateral Trustees;
and


 


(c)                                  the Collateral
Trust Agreement dated as of December 12, 2002, as amended by Amendment No. 1 to
the Collateral Trust Agreement, dated as of July 29, 2003 and Amendment No. 2 to
the Collateral Trust Agreement, dated as of March 17, 2004 (the “Collateral
Trust Agreement”) among AES, AES BVI II and the Collateral
Trustees).


 


The documents listed in
items (a) through (c) above are sometimes hereinafter referred to as the “Credit Documents”.


 


We have examined originals
or copies, certified or otherwise identified to our satisfaction, of such
documents, corporate records and certificates of public officials and officers
of the Company and have conducted such other investigations of fact and law as
we have deemed necessary or advisable for purposes of this opinion.


 


Based on the foregoing, and
subject to the assumptions and qualifications set forth below, we are of the
opinion that:


 


1.          [The Company is a [limited
liability company / corporation] validly existing and in good standing under
the laws of
[             ].]
(1)


 


2.          [The execution and delivery
by the Company of the Guaranty and the performance of its obligations
thereunder, are within its [corporate] powers and have been duly authorized by
all necessary [corporate] action. The Company has duly executed and delivered
the Guaranty.] (1)


 


3.          (a)  [The execution and delivery by the Company
of the Guaranty and the performance of its obligations thereunder and (b)] (1)
the granting of a security interest in all right, title and interest of AES in
that portion of the Collateral, as defined in the Security Agreement, which
represents [the capital stock of] [membership interests in] the [Tier 1
Company] and notes and other amounts receivable from the Company and its
Subsidiaries (the “Company Collateral”), and the exercise of
remedies by the Collateral Trustees with respect to the Company Collateral
pursuant to the Security Agreement or the Collateral


 












(1) To be included in opinions for Subsidiary
Guarantors.


 


2

















 


Trust
Agreement, require no action by or in respect of, or filing with, any
governmental body, agency or official under
[                   ](2)
and do not (i) contravene, or constitute a default under, any provision of (A)
applicable law or regulation, that in our experience is normally applicable in
relation to transactions of the type contemplated by the Credit Documents, (B)
the certificate of incorporation or by-laws or other constitutive documents of
the Company or any of its Subsidiaries or (C) any agreement or instrument
listed in Schedule I hereto which agreements have been represented to us by the
Company to be the material agreements of the Company and its Subsidiaries or
(ii) result in or require the creation or imposition of any Lien on any asset
of the Company or any of its Subsidiaries under any agreement or instrument
listed in such Schedule [except that any change in the ownership of the Company
resulting from the exercise of remedies by the Collateral Trustees that would
result in AES owning, directly or indirectly, less than
               %
of the [capital stock] of the Company would constitute a default under [the
loan documents – specify] [other agreements or regulations – specify]
unless consented to by the [lenders, offtaker regulators – specify].


 


This opinion is delivered to
you in connection with the above matter. This opinion may not be relied upon by
you for any other purpose or relied upon by any other person without our prior
written consent, except that any person that becomes a Bank Party in accordance
with the provisions of Section 10.06 of the Credit Agreement and any other
person that becomes a “Secured Holder” under the Collateral Trust Agreement may
rely upon this opinion as if it were specifically addressed and delivered to
such person on the date hereof.


 


We are members of the Bar of
[        ] (2) and the foregoing
opinion is limited to the laws of
[                      ]
(2).


 


 


Very truly yours,


 












(2) Insert applicable jurisdiction.


 


3



















DRAFT –
3/15/04


SUBJECT
TO REVIEW OF DOCUMENTS


 


 


March 17, 2004


 


The addressees listed on
Schedule I attached hereto


 


Re:                               The
AES Corporation


 


Ladies and Gentlemen:


 


We have acted as
special Delaware counsel to The AES Corporation, a Delaware corporation (“Borrower”),
in connection with certain matters of Delaware law set forth below relating to
that certain Third Amended and Restated Credit and Reimbursement Agreement
dated March 17, 2004 (the “Credit Agreement”) among the Borrower, the
Subsidiary Guarantors (as defined therein) party thereto, the banks party
thereto (the “Banks”), Citicorp USA, Inc, as administrative agent for the Banks
(in such capacity, the “Administrative Agent”) and Citibank, N.A., as
collateral agent for the Banks (in such capacity, the “Collateral Agent”).  Non-capitalized terms used in connection
with the opinions given herein with respect to matters within the scope of
Article 9 of the Uniform Commercial Code are used as defined in the Uniform
Commercial Code as enacted and presently in effect in the State of Delaware
(the “Delaware UCC”), to the extent that they are defined in the Delaware UCC.


 


In rendering this
opinion, we have examined and relied upon copies of the following documents in
the forms provided to us:  the Security
Agreement dated December 12, 2002 (the “Original Security Agreement”) by and
among the Borrower, the other persons listed on the signature pages thereof and
the Additional Grantors (as defined therein), Wilmington Trust Company, as
corporate trustee (the “Corporate Trustee”) and Bruce L. Bisson, as individual
trustee (the “Individual Trustee” and together with the Corporate Trustee, the
“Collateral Trustees”); Amendment No. 1 dated July 29, 2003 to the Original
Security Agreement (the “Security Agreement Amendment” and together with the
Original Security Agreement amended thereby, the “Security Agreement”); the
Collateral Trust Agreement dated as of December 12, 2002 (the “Original
Collateral Trust Agreement”) by and among the


 

















 


Borrower, the
other persons listed on the signature pages thereto, the Additional Grantors
(as defined in the Security Agreement) and the Collateral Trustees; Amendment
No. 1 dated July 29, 2003 to the Original Collateral Trust Agreement (the
“Collateral Trust First Amendment” and together with the Original Collateral
Trust Agreement amended thereby, the “First Amended Collateral Trust
Agreement”); Amendment No. 2 dated March 17, 2004 to the First Amended
Collateral Trust Agreement (the “Collateral Trust Second Amendment” and together
with the First Amended Collateral Trust Agreement amended thereby, the
“Collateral Trust Agreement”); the UCC-1 Financing Statement No. 23125147
naming Borrower as “debtor” and the Collateral Trustees as “secured party” (the
“Original Borrower Security Agreement Financing Statement”) as filed in the
Office of the Secretary of State of the State of Delaware (the “State Office”)
on December 13, 2002; the UCC Financing Statement Amendment No. 31952897 naming
Borrower as “debtor” and the Collateral Trustees as “secured party” (the
“Borrower Security Agreement Financing Statement Amendment”) as filed in the
State Office on July 29, 2003; the UCC-1 Financing Statement No. 23125089
naming Borrower as “debtor” and the Collateral Trustees as “secured party” (the
“Original Borrower Collateral Trust Agreement Financing Statement” and together
with the Original Borrower Security Agreement Financing Statement, the
“Original Financing Statements” and each individually, an “Original Financing
Statement”) as filed in the State Office on December 13, 2002; the UCC
Financing Statement Amendment No. 31952756 naming Borrower as “debtor” and the
Collateral Trustees as “secured party” (the “Borrower Collateral Trust
Agreement Financing Statement Amendment”) as filed in the State Office on July
29, 2003; and a certification of good standing of the Borrower obtained as of a
recent date from the State Office.  In
such examinations, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as copies or drafts of
documents to be executed and the legal competence and capacity of natural
persons to complete the execution of documents.  We have further assumed for purposes of this opinion:  (i) the due formation or organization,
valid existence and good standing of each entity that is a signatory to any of
the above-referenced documents under the laws of the jurisdiction of its
formation or organization; (ii) the due authorization, authentication,
adoption, approval, certification, acknowledgement, execution, filing, indexing
and delivery, as applicable, of each of the above-referenced documents by each
of the parties thereto; (iii) that the Original Borrower Security Agreement
Financing Statement provides the mailing address of Borrower and the names and
mailing addresses of the Collateral Trustees and sufficiently indicates the
“Collateral” (as defined in the Original Security Agreement) in accordance with
Section 9-502 of the Delaware UCC; (iv) that the Original Borrower Collateral
Trust Agreement Financing Statement provides the mailing address of Borrower
and the names and mailing addresses of the Collateral Trustees and sufficiently
indicates the “Additional Collateral Trust Agreement Collateral” (as defined in
the Original Collateral Trust Agreement) in accordance with Section 9-502 of
the Delaware UCC; (v) that the Borrower Security Agreement Financing Statement
Amendment accurately provides the names of the Collateral Trustees as “secured
party” of record authorizing the amendment and sufficiently indicates the
Borrower Collateral (as defined below) in accordance with Section 9-502 of the
Delaware UCC; (vi) that the Borrower Collateral Trust Agreement Financing Statement
Amendment accurately provides the names of the Collateral Trustees as “secured
party” of record authorizing the amendment and sufficiently indicates the
Borrower Additional Collateral Trust Agreement Collateral (as defined below) in
accordance with Section 9-502 of


 


2

















 


the Delaware UCC;
(vii) that the Borrower was not originally or is not organized or existing
under the laws of any jurisdiction other than the State of Delaware;
(viii)  that each of the above-referenced documents constitutes a legal,
valid and binding agreement of each of the parties thereto and is enforceable
against each of the parties thereto in accordance with its terms; and
(ix) that the documents examined by us are in full force and effect,
express the entire understanding of the parties thereto with respect to the
subject matter thereof and have not been amended, supplemented or otherwise
modified, except as referenced herein. 
No opinion is expressed herein with respect to the requirements of, or
compliance with, federal or state securities or blue sky laws.  As to any facts material to our opinion,
other than those assumed, we have relied without independent investigation on
the above-referenced documents and on the accuracy as of the date hereof of the
matters therein contained.  We have not
reviewed any documents other than those referenced above in connection with
rendering this opinion, and we have assumed there are no documents that are
contrary to or inconsistent with the opinions herein expressed.


 


Based on and
subject to the foregoing and to the further assumptions and qualifications set
forth below, and limited in all respects to matters of Delaware law, it is our
opinion that:


 


1.             The Original Borrower
Security Agreement Financing Statement and the Borrower Security Agreement
Financing Statement Amendment having been filed, solely to the extent that the
Delaware UCC is applicable to the perfection of the security interest of the
Collateral Trustees in the “Collateral” (as defined in the Security Agreement)
owned or acquired by Borrower (the “Borrower Collateral”), the security
interest of the Collateral Trustees in that portion of the Borrower Collateral
as to which a security interest can be perfected by filing a financing
statement in the State Office under the Delaware UCC (the “Borrower Filing
Collateral”) is perfected.


 


2.             The Original Borrower
Collateral Trust Agreement Financing Statement and the Borrower Collateral
Trust Agreement Financing Statement Amendment having been filed, solely to the
extent that the Delaware UCC is applicable to the perfection of the security
interest of the Collateral Trustees in the “Additional Collateral Trust
Agreement Collateral” (as defined in the Collateral Trust Agreement) owned or
acquired by Borrower (the “Borrower Additional Collateral Trust Agreement
Collateral”), the security interest of the Collateral Trustees in that portion
of the Borrower Additional Collateral Trust Agreement Collateral as to which a
security interest can be perfected by filing a financing statement in the State
Office under the Delaware UCC (the “Borrower Additional Collateral Trust
Agreement Filing Collateral”) is perfected.


 


In connection with
the opinions set forth above, we have assumed that (i) the Security Agreement
creates or, with respect to after acquired property, will create in favor of
the Collateral Trustees a valid security interest in and to the Borrower Filing
Collateral, which security interest has attached or, with respect to after
acquired property, will attach under the Uniform Commercial Code as in effect
in the State of New York (the “New York UCC”), (ii) the Collateral Trust
Agreement creates or, with respect to after acquired property, will create in
favor of the Collateral Trustees a valid security interest in and to the
Borrower Additional Collateral


 


3

















 


Trust Agreement
Filing Collateral (collectively with the Borrower Filing Collateral, the
“Filing Collateral”), which security interest has attached or, with respect to
after acquired property, will attach under the New York UCC, and (iii) the
substantive laws of the Delaware UCC (and not the Delaware UCC choice-of-law
rules) govern the perfection of a security interest in the Filing Collateral.


 


In addition, in
connection with the opinions set forth above, we express no opinion as to
(i) the effect of perfection or nonperfection or the priority of any
security interest of the Collateral Trustees in any portion of the Filing
Collateral, (ii) the existence, legality, validity, binding effect or
enforceability of any security interest under the Security Agreement, the
Collateral Trust Agreement or otherwise, (iii) the rights or interests of
any of the parties to the Security Agreement, the Collateral Trust Agreement or
any other person or entity in, or title of any such parties, persons or
entities to, any of the Filing Collateral, or as to the value of any such
Filing Collateral, (iv) any Borrower Collateral or Borrower Additional Collateral
Trust Agreement Collateral until such Borrower Collateral or Borrower
Additional Collateral Trust Agreement Collateral is acquired by Borrower; (v)
in the case of any Filing Collateral that is secured by other property, the
rights or interests of any of the parties to the Security Agreement, the
Collateral Trust Agreement or any other person or entity in, or title of any
such parties, persons or entities to, any of such underlying property,
(vi) any collateral other than the Filing Collateral, (vii) any Filing
Collateral due from any government or any agency or instrumentality thereof,
(viii) any Filing Collateral that constitutes fixtures, as-extracted
collateral or timber to be cut, (ix) any Filing Collateral that
constitutes commercial tort claims, (x) any Filing Collateral that
constitutes consumer goods, (xi) any Filing Collateral that constitutes goods
subject to a negotiable document of title and (xii) transactions excluded
from the application of Article 9 of the Delaware UCC pursuant to the provisions
of Section 9-109 thereof.  Further, to
the extent the opinions set forth above relate to proceeds, such opinions are
subject to the qualification that the perfection of an interest in proceeds is
subject to the limitations and requirements of Section 9-315 of the Delaware
UCC.


 


Further, in
connection with the opinions set forth above, we note that the security
interest of the Collateral Trustees in certain Filing Collateral may be subject
to the rights of account debtors in respect of such Filing Collateral, claims
and defenses of such account debtors and terms of agreements with such account
debtors.


 


In addition, we
express no opinion as to any actions that may be required to be taken
periodically under the Delaware UCC or other applicable law in order for the
effectiveness of the Original Borrower Security Agreement Financing Statement
as amended by the Borrower Security Agreement Financing Statement Amendment
(the “Borrower Security Agreement Financing Statement”) or the Original
Borrower Collateral Trust Agreement Financing Statement as amended by the
Borrower Collateral Trust Agreement Financing Statement Amendment (the
“Borrower Collateral Trust Agreement Financing Statement” and together with the
Borrower Security Agreement Financing Statement, the “Financing Statements” and
each individually, a “Financing Statement”), or the perfection of the security
interest of the Collateral Trustees in the Filing Collateral, to be
maintained.  We note, however, that the
perfection of the security interest of the Collateral Trustees in the Filing
Collateral and the effectiveness of each Financing


 


4

















 


Statement will
either terminate or be materially limited (i) unless an appropriate
continuation statement is properly filed (a) within the period of six
months prior to the expiration of the five-year period from the date of the
original filing of each Original Financing Statement and (b) if a prior
continuation statement has been filed, within the period of six months prior to
the expiration of the Original Financing Statement continued by such prior
continuation statement, (ii) if Borrower changes its name so as to make
the relevant Financing Statement seriously misleading, unless an amendment to
such Financing Statement that renders such Financing Statement not seriously
misleading is properly filed within four months after such a change in name,
(iii) if Borrower changes its jurisdiction of formation or organization to
another jurisdiction, four months after Borrower changes its jurisdiction of
formation or organization to another jurisdiction, unless such security
interest is perfected in such new jurisdiction within such time, (iv) if
Borrower transfers the relevant Filing Collateral to a person or entity that thereby
becomes a debtor and is located in another jurisdiction, one year after
Borrower transfers such Filing Collateral to a person or entity that thereby
becomes a debtor and is located in another jurisdiction, unless such security
interest is perfected in such new jurisdiction within such time, and
(v) if Borrower becomes organized under the laws of another jurisdiction
in addition to the State of Delaware.


 


Further, the
opinions set forth above are subject to the effect of (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other laws of
general application relating to or affecting the enforcement of creditors’
rights and remedies, as from time to time in effect, (ii) application of
equitable principles (regardless of whether such enforceability is considered
in a proceeding in equity or at law), (iii) principles of course of
dealing or course of performance and standards of good faith, fair dealing,
materiality and reasonableness that may be applied by a court to the exercise
of rights and remedies by, and other acts of, a creditor, and (iv)
considerations of public policy with respect to the enforceability of
exculpation, indemnification and limitation on damages provisions.


 


This opinion
speaks only as of the date hereof, and is based on our understandings and
assumptions as to present facts and a review of the above referenced documents
and the application of Delaware law as the same exist on the date hereof, and
we undertake no duty to update or supplement this opinion for the benefit of
any person or entity with respect to any facts or circumstances that may
hereafter come to our attention or any changes in facts, circumstances or law
that may hereafter occur or take effect. 
The opinions herein expressed are intended solely for the benefit of the
addressees hereof and may not be relied upon by any other person or entity or
for any other purpose without our prior written consent.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  MORRIS, NICHOLS, ARSHT
  & TUNNELL

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Louis G. Hering

  



 


5

















 


SCHEDULE I


 


	
  The
  Banks, Citicorp USA, Inc., as Administrative Agent and

  
	
  Citibank,
  N.A., as Collateral Agent

  
	
  c/o
  Citicorp USA, Inc., as Administrative Agent

  
	
  388
  Greenwich Street, 21st Floor

  
	
  New
  York, NY 10013

  
	
  Attention:
  Stuart Glen

  
	
   

  
	
  Wilmington
  Trust Company, as Corporate Trustee

  
	
  Rodney
  Square North

  
	
  1100
  North Market Street

  
	
  Wilmington,
  DE 19890

  
	
  Attention:
  Corporate Trust Division

  
	
   

  
	
  Bruce
  L. Bisson, as Individual Trustee

  
	
  Rodney
  Square North

  
	
  1100
  North Market Street

  
	
  Wilmington,
  DE 19890

  
	
  Attention: Corporate Trust Division

  



 

















 


MAPLES
AND CALDER


CAYMAN EUROPE ASIA


 


Draft:
9/3/04


 


March 17, 2004


 


To:          the addressees listed in
the Schedule


 


Dear Sirs


 


AES International
Holdings II, Ltd. (the “Company”)


 


We have acted as counsel as to Cayman Islands law to
the Company in connection with the entry by the Company into the Third Amended
and Restated Credit and Reimbursement Agreement (the “Credit Agreement”), dated
as of March 17, 2004 among The AES Corporation, the Subsidiary Guarantors party
thereto (the “Subsidiary Guarantors”), the Banks party thereto, Citicorp USA,
Inc., as Administrative Agent and Citibank, N.A. as Collateral Agent.


 


1              DOCUMENTS
REVIEWED


 


We have reviewed
originals, copies, drafts or conformed copies of the following documents:


 


1.1                                 the
Certificate of Incorporation and Memorandum and Articles of Association of each
of AES El Salvador, Ltd. and AES South American Holdings, Ltd. (the “Cayman
Companies”);


 


1.2                                 the
Register of Members of each of the Cayman Companies as provided to as by Citco
Trust (Cayman Islands) Ltd.;


 


1.3                                 a
certificate from a Director of each of the Cayman Companies, copies of which
are annexed hereto (the “Director’s
Certificate”); and


 


1.4                                 the
Charge and Assignment of Shares (“Charge of Shares”), dated as of 12 December,
2002 between the Company, as chargor, the Wilmington Trust Company, as
corporate trustee, and Bruce L. Bisson, as the individual trustee.


 


 


PO Box 309GT, Ugland
House, South Church Street, George Town, Grand Cayman, Cayman Islands

Telephone: (345) 949 8066  Facsimile:
(345) 949 8080  Email:
info@maplesandcalder.com


 

















 


2              ASSUMPTIONS


 


The following opinion is
given only as to, and based on, circumstances and matters of fact existing and
known to us on the date of this opinion. This opinion only relates to the laws
of the Cayman Islands which are in force on the date of this opinion.  In giving this opinion we have relied
(without further verification) upon the completeness and accuracy of the
Director’s Certificates. We have also relied upon the following assumptions,
which we have not independently verified:


 


2.1                                 the
Charge of Shares has been authorised and duly executed and delivered by or on
behalf of all relevant parties in accordance with all relevant laws (other than
the laws of the Cayman Islands);


 


2.2                                 the
Charge of Shares is legal, valid, binding and enforceable against all relevant
parties in accordance with its terms under British Virgin Islands law and all
other relevant laws (other than the laws of the Cayman Islands);


 


2.3                                 the
choice of Cayman Islands law as the governing law of the Charge of Shares has
been made in good faith;


 


2.4                                 copy
documents, conformed copies or drafts of documents provided to us are true and
complete copies of, or in the final forms of, the originals;


 


2.5                                 all
signatures, initials and seals are genuine;


 


2.6                                 the
power, authority and legal right of all parties under all relevant laws and
regulations to enter into, execute, deliver and perform their respective
obligations under the Charge of Shares;


 


2.7                                 there
is nothing under any law (other than the law of the Cayman Islands) which would
or might affect the opinions hereinafter appearing.  Specifically, we have made no independent investigation of the
laws of the British Virgin Islands;


 


2.8                                 that
no encumbrances or equities exist in respect of the shares of the Cayman
Companies which are the subject of the Charge of Shares (the “Secured Shares”)
(other than arising by virtue of the laws of the Cayman Islands) and that there
is no contractual or other prohibition (other than one arising by virtue of the
laws of the Cayman Islands) binding upon the Company preventing the Company
from creating the charge over the Secured Shares pursuant to the Charge of
Shares;


 


2.9                                 the
share certificates representing the Secured Shares have been deposited with the
Chargee together with a signed but undated share transfer form, and a security
power of attorney.


 


2

















 


3              OPINIONS


 


Based upon, and subject
to, the foregoing assumptions and the qualifications set out below, and having
regard to such legal considerations as we deem relevant, we are of the opinion
that:


 


3.1                                 The
Charge of Shares when duly authorised, executed and delivered by or on behalf
of the Company, will constitute legal, valid and binding obligations of the
Company enforceable against the Company in accordance with its terms except and
insofar as such enforcement may be limited as hereinafter set forth.


 


3.2                                 No
authorisations, consents or approvals are required from, and no notice to or
filing or registration with, any governmental authorities or agencies or other
official bodies in the Cayman Islands in connection with the execution or
delivery of the Charge of Shares.


 


3.3                                 Subject
as set out in paragraph 4.2 below, no stamp duties or other taxes are payable
under the laws of the Cayman Islands in respect of the execution or delivery of
the Charge of Shares or the enforcement thereof.


 


3.4                                 It
is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence of the Charge of Shares that any document be filed,
recorded or enrolled with any governmental department or other authority in the
Cayman Islands.


 


3.5                                 The
courts of the Cayman Islands will observe and give effect to the choice of
Cayman Islands law as the governing law of the Charge of Shares.


 


3.6                                 It
is not necessary under the laws of the Cayman Islands (i) in order to enable
any party to enforce its rights under the Charge of Shares or (ii) by reason of
the execution, delivery or performance of the Charge of Shares that any party
should be licensed, qualified or otherwise entitled to do business in the
Cayman Islands or any political sub-division thereof.


 


3.7                                 No
party to the Charge of Shares is or will be deemed to be resident, domiciled or
carrying on business in the Cayman Islands by reason only of the execution,
delivery or performance and/or enforcement of the Charge of Shares in the
Cayman Islands or elsewhere.


 


3.8           The Charge of Shares:


 


3.8.1        creates a valid charge
over the Secured Shares; and


 


3.8.2                        no
further steps are required as a matter of Cayman Islands law to perfect such
charge, or to regulate its ranking in point of priority; and


 


3.8.3                        subject
to the assumptions and qualifications herein, the charge created by the Charge
of Shares will have priority over any claims by third parties (other than those
preferred by law) including any liquidator or a creditor of the Company,
subject in the case of a winding up of the Company in a jurisdiction other than
the


 


3

















 


Cayman Islands to
any provisions of the laws of that jurisdiction as to priority of claims in a
winding up.


 


4              QUALIFICATIONS


 


The opinions expressed
above are subject to the following qualifications:


 


4.1                                 The
term “enforceable”
as used above means that the obligations assumed by the Company under the
Charge of Shares are of a type which the courts of the Cayman Islands will
enforce.  It does not mean that those
obligations will necessarily be enforced in all circumstances in accordance
with their terms.  In particular:


 


4.1.1                        enforcement may be limited by
bankruptcy, insolvency, liquidation, reorganisation, readjustment of debts or
moratorium or other laws of general application relating to or affecting the
rights of creditors;


 


4.1.2                        enforcement may be limited by
general principles of equity.  For
example, equitable remedies such as specific performance may not be available, inter alia,
where damages are considered to be an adequate remedy;


 


4.1.3                        some claims may become barred
under the statutes of limitation or may be or become subject to defenses of
set-off, counterclaim, estoppel and similar defenses;


 


4.1.4                        where obligations are to be
performed in a jurisdiction outside the Cayman Islands, they may not be
enforceable in the Cayman Islands to the extent that performance would be
illegal under the laws of that jurisdiction;


 


4.1.5                        the Cayman Islands court has
jurisdiction to give judgment in the currency of the relevant obligation and
statutory rates of interest payable upon judgments will vary according to the
currency of the judgment.  If the
Company becomes insolvent and is made subject to a liquidation proceeding, the
Cayman Islands court will require all debts to be proved in a common currency,
which is likely to be the “functional currency” of the Company determined in
accordance with applicable accounting principles. Currency indemnity provisions
have not been tested, so far as we are aware, in the courts of the Cayman
Islands; and


 


4.1.6                        obligations to make payments
that may be regarded as penalties will not be enforceable.


 


4.2                                 Cayman
Islands stamp duty may be payable if the original Charge of Shares is brought
to or executed in the Cayman Islands.


 


4.3                                 A
certificate, determination, calculation or designation of any party to the
Charge of Shares as to any matter provided therein might be held by a Cayman
Islands court not to be conclusive final and binding if, for example, it could
be shown to have an unreasonable or arbitrary basis, or in the event of
manifest error.


 


4

















 


4.4                                 In
principle a Cayman Islands court will award costs and disbursements in
litigation in accordance with the relevant contractual provisions but there
remains some uncertainty as to the way in which the rules of the Grand Court
will be applied in practice.  Whilst it
is clear that costs incurred prior to judgment can be recovered in accordance
with the contract, it is likely that post-judgment costs (to the extent
recoverable at all) will be subject to taxation in accordance with Grand Court
Rules Order 62.


 


4.5                                 We
reserve our opinion as to the extent to which a Cayman Islands court would, in
the event of any relevant illegality, sever the offending provisions and
enforce the remainder of the transaction of which such provisions form a part,
notwithstanding any express provisions in this regard.


 


4.6                                 We
make no comment with regard to the references to foreign statutes in the Charge
of Shares.


 


4.7                                 The
interest of the Chargee created pursuant to the Charge of Shares will rank
after (i) any prior legal or perfected equitable interest in the Secured Shares
and (ii) any later legal interest in the Secured Shares created in favour of a
bona fide purchaser or mortgagee for value without notice of the charge created
pursuant to the Charge of Shares.


 


4.8                                 Following
the English decision in MacMillan Inc. V Bishopsgate Trust (No. 3) [1995] 1
W.L.R. 978, which would be persuasive although not technically binding in the
courts of the Cayman Islands, it is not necessarily the case that, as a matter
of Cayman Islands conflict of law rules, priorities of competing interests in
shares in a Cayman Islands company will be determined according to the
jurisdiction of incorporation of company, for example, when the register of
members is maintained in another jurisdiction.


 


4.9                                 The articles of association of the Cayman
Companies contain restrictions on the transferability of its shares which may
affect the ability of the Chargee to realise its security by, for example,
selling the Secured Shares.  For
example, Article 9 of the Articles of Association of AES El Salvador, Ltd and
Article 9 of the Articles of Association of AES South America Holdings, Ltd.
confer on the Board of Directors of the relevant Cayman Company the right to
refuse to register transfers of shares in its sole discretion.  Unless and until the Board of Directors
resolves to register a transfer of Secured Shares in accordance with the
Articles and such transfer is duly registered in the relevant Cayman Company’s
Register of Members, the Company shall, as a matter of Cayman Islands law,
remain the legal and registered holder of the Secured Shares


 


5

















 


We express no view as to
the commercial terms of the Charge of Shares or whether such terms represent
the intentions of the parties and make no comment with regard to the
representations which may be made by the Company.


 


This opinion may be
relied upon by the addressees only. It may not be relied upon by any other
person except with our prior written consent.


 


 


	
  Yours faithfully,

  
	
   

  
	
   

  
	
  MAPLES and CALDER

  



 


6

















 


SCHEDULE


 


	
  The Banks, Citicorp
  USA, Inc. as Administrative Agent

  
	
  and Citibank, N.A. as
  Collateral Agent

  
	
  c/o Citicorp USA, Inc.,
  as Administrative Agent

  
	
  and Collateral Agent

  
	
  388 Greenwich Street,
  21st Floor

  
	
  New York, New York
  10013

  
	
  Attn: Stuart Glen

  
	
   

  
	
  Wilmington Trust
  Company

  
	
  as Corporate Trustee

  
	
  Rodney Square North

  
	
  1100 North Market
  Street

  
	
  Wilmington, DE 19890

  
	
  Attn: Corporate Trust
  Division

  
	
   

  
	
  Bruce L. Bisson

  
	
  as Individual Trustee

  
	
  Rodney Square North

  
	
  1100 North Market
  Street

  
	
  Wilmington, DE 19890

  
	
  Attn: Corporate Trust
  Division

  



 


7

















 


AES South American
Holdings, Ltd.

P
O Box 31106 SMB, West Bay Road,

Grand Cayman, Cayman Islands


 


11 March, 2004


 


To:                              Maples
and Calder

PO Box 309GT

Ugland House

South Church

Grand Cayman

Cayman Islands


 


Dear Sirs,


 


AES South American
Holdings, Ltd. (the “Company”)


 


I,
                         ,
being a director of the Company, am aware that you are being asked to provide a
legal opinion (the “Opinion”) in relation to certain aspects of
Cayman Islands law.  Capitalised terms
used in this certificate have the meaning given to them in the Opinion.  I hereby certify that:


 


1                                         The
Memorandum and Articles of Association of the Company as registered on 22
April, 2002 remain in full force and effect and are unamended.


 


2                                         The
authorised share capital of the Company is US$50,000 divided into 50,000 shares
of US$1.00 par value each.  The issued
share capital of the Company is 5,030 shares of US$1.00 each, which have been
issued and are fully paid up.


 


I confirm that you may
continue to rely on this Certificate as being true and correct on the day that
you issue the Opinion unless I shall have previously notified you personally to
the contrary.


 


 


	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
  Director

  



 

















 


AES El Salvador, Ltd.

P
O Box 31106 SMB, West Bay Road,

Grand Cayman, Cayman Islands


 


11 March, 2004


 


To:                              Maples
and Calder

PO Box 309GT

Ugland House

South Church

Grand Cayman

Cayman Islands


 


Dear Sirs,


 


AES El Salvador, Ltd.
(the “Company”)


 


I,
                         ,
being a director of the Company, am aware that you are being asked to provide a
legal opinion (the “Opinion”) in relation to certain aspects of
Cayman Islands law.  Capitalised terms
used in this certificate have the meaning given to them in the Opinion.  I hereby certify that:


 


3                                         The
Memorandum and Articles of Association of the Company as registered on 14
October, 1997 remain in full force and effect and are unamended.


 


4                                         The
authorised share capital of the Company is US$50,000 divided into 50,000 shares
of US$1.00 par value each.  The issued
share capital of the Company is 1,000 shares of US$1.00 each, which have been
issued and are fully paid up.


 


I confirm that you may
continue to rely on this Certificate as being true and correct on the day that
you issue the Opinion unless I shall have previously notified you personally to
the contrary.


 


 


	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
  Director

  



 

















 


DRAFT
(1)


Conyers
Dill & Pearman/AGE/ssx/951465/45341


March 10, 2004


 


March 17, 2004


 


	
  To the addressees
  listed on Schedule I

  	
   

  	
  DIRECT
  LINE:

  	
   

  	
   

  
	
   

  	
   

  	
  E-MAIL:

  	
   

  	
  ageldridge@cdp.bm

  
	
   

  	
   

  	
  OUR
  REF:

  	
   

  	
  AGE/ssx/951465/

  
	
   

  	
   

  	
  YOUR
  REF:

  	
   

  	
   

  



 


Dear Sirs:


 


Re:          AES International
Holdings II, Ltd. (the “Company”)


 


We have acted as special legal counsel in the British Virgin Islands to
The AES Corporation (“AES”) in connection with the Third Amended and Restated
Credit and Reimbursement Agreement (the “Credit Agreement”) dated as of March
17, 2004 among AES, 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 (for the Term Loan Facility (as defined
in the Credit Agreement)), Deutsche Bank Securities Inc. as Lead Arranger and
Book Runner (for the Term Loan Facility), Union Bank Of California, N.A., as
Co-Syndication Agent € for the Term Loan Facility) and as Lead Arranger and
Book Runner and as Syndication Agent (for the Revolving Credit Facility (as
defined in the Credit Agreement)), 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 Facility), Credit Lyonnais New York
Branch, as Co-Documentation Agent (Revolving Credit Facility), Citicorp USA,
Inc., as Administrative Agent for the Bank Parties and Citibank, N.A., as
Collateral Agent for the Bank Parties. 
This opinion is being rendered to you at the request of the Obligors (as
defined in the Credit Agreement) pursuant to Section 3.01(c) of the Credit
Agreement.


 


For the purposes of giving this opinion, we have examined facsimile or
electronic copies of the following documents:


 


(i)                                     the
Charge and Assignment of Shares (“Charge Over Shares”) dated December 12, 2002,
between the Company, the Wilmington Trust Company, as corporate trustee and
Bruce L. Bisson, as the individual trustee;


 


(ii)                                  the
Collateral Trust Agreement (“Collateral Trust Agreement “) dated December 12,
2002, by and among AES, the Grantors (as therein defined) (including the
Company), the Wilmington Trust Company, as corporate trustee and Bruce L.
Bisson, as the individual trustee;


 

















 





 


(iii)                               an
amending agreement dated July 29, 2003 by and among AES, the Grantors (as
defined in the Collateral Trust Agreement) (including the Company), the Wilmington
Trust Company, as corporate trustee and Bruce L. Bisson, as the individual
trustee, amending the terms of the Collateral Trust Agreement; and


 


(iv)                              an
amending agreement dated March 17, 2004 by and among AES, the Grantors (as
defined in the Collateral Trust Agreement) (including the Company), the
Wilmington Trust Company, as corporate trustee and Bruce L. Bisson, as the
individual trustee, amending the terms of the Collateral Trust Agreement.


 


The documents listed in items (i) through (iii) above are herein
sometimes collectively referred to as the “Documents”.


 


We have also reviewed the memorandum of association and the articles of
association of the Company, as obtained from the Registrar of Companies on
March 10, 2004, minutes of a meeting of its directors held on December 10,
2002, minutes of a meeting of its directors held on July 28, 2003, minutes of a
meeting of its directors held on March 12, 2004 (collectively, the “Minutes”),
and such other documents and made such enquiries as to questions of law as we
have deemed necessary in order to render the opinion set forth below.


 


We have assumed:


 


(a)                                  the
genuineness and authenticity of all signatures and the conformity to the
originals of all copies (whether or not certified) examined by us and the authenticity
and completeness of the originals from which such copies were taken;


 


(b)                                 that
where a document has been examined by us in draft form, it will be or has been
executed in substantively the form of that draft, and where a number of drafts
of a document have been examined by us all changes thereto have been marked or
otherwise drawn to our attention;


 


(c)                                  the
capacity, power and authority of each of the parties to the Documents, other
than the Company, to enter into and perform its respective obligations under
the Documents;


 


(d)                                 the
due execution of the Documents by each of the parties thereto, other than the
Company, and the delivery thereof by each of the parties thereto;


 


(e)                                  the
accuracy and completeness of all factual representations made in the Documents
and other documents reviewed by us;


 


(f)                                    that
the resolutions contained in the Minutes remain in full force and effect and
have not been rescinded or amended;


 


(g)                                 that
there is no provision of the law of any jurisdiction, other than the British
Virgin Islands, which would have any implication in relation to the opinions
expressed herein;


 


2

















 


(h)                                 the
validity and binding effect under the laws of the Cayman Islands and the State
of Delaware (the “Foreign Laws”) of the Documents which are expressed to be
governed by such Foreign Laws in accordance with their respective terms; and


 


(i)                                     the
validity and binding effect under the Foreign Laws of the submission by the
Company pursuant to the Documents to the non-exclusive jurisdiction of the
courts of the Cayman Islands and the State of Delaware (the “Foreign Courts”).


 


The obligations of the Company under the Documents:


 


(a)                                  will
be subject to the laws from time to time in effect relating to bankruptcy,
insolvency, liquidation, possessory liens, rights of set off, reorganisation,
merger, consolidation, amalgamation, moratorium or any other laws or legal
procedures, whether of a similar nature or otherwise, generally affecting the
rights of creditors;


 


(b)                                 will
be subject to statutory limitation of the time within which proceedings may be
brought;


 


(c)                                  will
be subject to general principles of equity and, as such, specific performance
and injunctive relief, being equitable remedies, may not be available; and


 


(d)                                 may
not be given effect to by a British Virgin Islands court, whether or not it was
applying the Foreign Laws, if and to the extent they constitute the payment of
an amount which is in the nature of a penalty and not in the nature of
liquidated damages.


 


Notwithstanding any contractual submission to the jurisdiction of
specific courts, a British Virgin Islands court has inherent discretion to stay
or allow proceedings in the British Virgin Islands courts.


 


We express no opinion as to the enforceability of any provision of the
Documents which provides for the payment of a specified rate of interest on the
amount of a judgment after the date of judgment or which purports to fetter the
statutory powers of the Company.


 


We have made no investigation of and express no opinion in relation to
the laws of any jurisdiction other than the British Virgin Islands.  This opinion is to be governed by and
construed in accordance with the laws of the British Virgin Islands and is
limited to and is given on the basis of the current law and practice in the
British Virgin Islands.  This opinion is
issued solely for your benefit and is not to be relied upon by any other
person, firm or entity or in respect of any other matter.


 


On the basis of and subject to the foregoing, we are of the opinion
that:


 


1.                                       The
Company is duly incorporated and existing under the laws of the British Virgin
Islands in good standing (meaning solely that it has not failed to make any
filing with any British Virgin Islands governmental authority or to pay any
British Virgin Islands


 


3



















 


government fee
or tax which would make it liable to be struck off the Register of Companies
and thereby cease to exist under the laws of the British Virgin Islands).


 


2.                                       The
Company has the necessary corporate power and authority to enter into and
perform its obligations under the Documents. 
The execution and delivery of the Documents by the Company and the
performance by the Company of its obligations thereunder will not violate the
memorandum of association or articles of association of the Company nor any
applicable law, regulation, order or decree in the British Virgin Islands.


 


3.                                       The
Company has taken all corporate action required to authorise its execution,
delivery and performance of the Documents. 
The Documents have been duly executed and delivered by or on behalf of
the Company, and constitute the valid and binding obligations of the Company in
accordance with the terms thereof.


 


4.                                       No
order, consent, approval, licence, authorisation or validation of or exemption
by any government or public body or authority of the British Virgin Islands or
any sub-division thereof is required to authorise or is required in connection
with the execution, delivery, performance and enforcement of the Documents.


 


5.                                       It
is not necessary or desirable to ensure the enforceability in the British
Virgin Islands of the Documents that they be registered in any register kept
by, or filed with, any governmental authority or regulatory body in the British
Virgin Islands.  However, to the extent
that any of the Documents creates a charge over assets of the Company, it may
be desirable to ensure the priority in the British Virgin Islands of the charge
that it be registered in the Register of Mortgages, Charges and other
Encumbrances of the Company at its registered office in accordance with Section
70A of the International Business Companies Act (Cap. 291) (the “Act”) and that
a copy of such register be filed at the office of the Registrar of Companies
pursuant to Section 111A of the Act.  On
registration, to the extent that British Virgin Islands law governs the
priority of a charge, such charge will have priority in the British Virgin
Islands over any unregistered charges, and over any subsequently registered
charges, in respect of the assets which are the subject of the charge.  A registration fee of $50.00 will be payable
in respect of the registration.


 


While there is
no exhaustive definition of a charge under British Virgin Islands law, a charge
normally has the following characteristics:


 


(i)                                             it
is a proprietary interest granted by way of security which entitles the chargee
to resort to the charged property only for the purposes of satisfying some
liability due to the chargee (whether from the chargor or a third party); and


 


(ii)                                          the
chargor retains an equity of redemption to have the property restored to him
when the liability has been discharged.


 


4

















 


However, as
the Documents are governed by the Foreign Laws, the question of whether they
would possess these particular characteristics would be determined under the
Foreign Laws.  Assuming that each of the
Documents possesses such characteristics, each of the Documents creates a valid
and binding security interest in accordance with the terms thereof.


 


6.                                       The
Documents will not be subject to ad valorem stamp duty in the British Virgin
Islands.


 


7.                                       The
choice of the Foreign Laws as the governing law of the Documents is a valid
choice of law and would be recognised and given effect to in any action brought
before a court of competent jurisdiction in the British Virgin Islands, except
for those laws (i) which such court considers to be procedural in nature, (ii)
which are revenue or penal laws or (iii) the application of which would be
inconsistent with public policy, as such term is interpreted under the laws of
the British Virgin Islands.  The
submission in the Documents to the non-exclusive jurisdiction of the Foreign
Courts is valid and binding upon the Company.


 


8.                                       The
courts of the British Virgin Islands would recognise as a valid judgment, a
final and conclusive judgment in personam obtained in the Foreign Courts
against the Company based upon the Documents under which a sum of money is
payable (other than a sum of money payable in respect of multiple damages,
taxes or other charges of a like nature or in respect of a fine or other
penalty) and would give a judgment based thereon provided that (a) such courts
had proper jurisdiction over the parties subject to such judgment, (b) such
courts did not contravene the rules of natural justice of the British Virgin
Islands, (c) such judgment was not obtained by fraud, (d) the enforcement of
the judgment would not be contrary to the public policy of the British Virgin
Islands, (e) no new admissible evidence relevant to the action is submitted
prior to the rendering of the judgment by the courts of the British Virgin
Islands and (f) there is due compliance with the correct procedures under the
laws of the British Virgin Islands.


 


	
  Yours
  faithfully,

  
	
   

  
	
   

  
	
  CONYERS DILL & PEARMAN

  



 


5

















 


SCHEDULE I


 


	
  The Banks, Citicorp USA, Inc., as Administrative Agent and

  
	
  Citibank, N.A., as Collateral Agent

  
	
  c/o Citicorp USA, Inc., as Administrative Agent

  
	
  388 Greenwich Street, 21st Floor

  
	
  New York, NY 10013

  
	
  Attention: Stuart Glen

  
	
   

  
	
  Wilmington Trust Company, as Corporate Trustee

  
	
  Rodney Square North

  
	
  1100 North Market Street

  
	
  Wilmington, DE 19890

  
	
  Attention: Corporate Trust Division

  
	
   

  
	
  Bruce L. Bisson, as Individual Trustee

  
	
  Rodney Square North

  
	
  1100 North Market Street

  
	
  Wilmington, DE 19890

  
	
  Attention: Corporate Trust
  Division

  



 

















 


EXHIBIT B-7 to the


Third Amended and Restated


Credit and Reimbursement Agreement


 


FORM OF OPINION OF SHEARMAN & STERLING


 


March 17, 2004


 


To the Banks, BankBoston, N.A.,
Nassau Branch,


the Agent referred to below and
the Collateral Agent,


referred to below


 


c/o Citicorp USA, Inc.


388 Greenwich Street, 21st
Floor


New York, NY  10013


 


The AES Corporation


 


Ladies and Gentlemen:


 


We have acted
as special New York counsel to Citicorp USA, Inc., individually and as
Administrative Agent for the Bank Parties, and to Citibank, N.A., individually
and as Collateral Agent for the Bank Parties, in connection with the
preparation, negotiation, execution and delivery of the Third Amended and
Restated Credit and Reimbursement Agreement (including without limitation, the
Subsidiary Guaranty in Article IX thereto) dated as of March 17, 2004 (the “Credit
and Reimbursement Agreement”) among The AES Corporation, a Delaware
corporation (the “Borrower”), the Subsidiary Guarantors party thereto,
the Banks party thereto (the “Banks”), Citicorp USA, Inc., as
Administrative Agent (the “Agent”) for the Bank Parties and Citibank,
N.A., as Collateral Agent (the “Collateral Agent”) for the Bank
Parties.  Unless otherwise defined
herein, terms defined in the Credit and Reimbursement Agreement are used herein
as therein defined.  This opinion is
being delivered to you pursuant to Section 3.01(d) of the Credit and
Reimbursement Agreement.


 


In that
connection, we have examined (a) the Existing Bank Credit Agreement, (b) a
counterpart of the Credit and Reimbursement Agreement executed by each of the
Loan Parties, (c) the Notes executed by the Borrower and delivered on the date
hereof (the “Closing Date Notes”), (d) the Security Agreement and
(e) to the extent relevant to our opinions expressed below, the other documents
delivered by the Loan Parties pursuant to Section 3.01 of the Credit and
Reimbursement Agreement, including (A) the opinion of Vincent Mathis, Assistant
General Counsel of the Borrower, (B) the opinion of Davis, Polk & Wardwell,
special New York counsel for the Borrower (the “New York Opinion”), (C)
the opinions of local counsel for the Borrower as to certain Subsidiaries of
the Borrower, (D) the opinion of Conyers Dill & Pearman, special British
Virgin Islands counsel for the Borrower, (E) the opinion of Maples &
Calder, special Cayman Islands counsel for the Borrower, (F) the opinion of
Morris, Nichols, Arsht & Tunnell, special Delaware counsel for the Borrower
(the “Delaware Opinion”) and (G) all certificates,


 

















 


resolutions and other similar
corporate documents furnished by the Loan Parties.  The documents listed in items (b) through (d) are referred to
herein as the “Transaction Documents”.


 


In our
examination of the Transaction Documents and the other Financing Documents, we
have assumed, without independent investigation (a) the due execution and
delivery of the Transaction Documents (other than the Closing Date Notes) and
the other Financing Documents by all parties thereto and of the Closing Date
Notes by the Borrower, (b) the genuineness of all signatures, (c) the
authenticity of the originals of the documents submitted to us and (d) the
conformity to originals of any documents submitted to us as copies.


 


In addition,
we have assumed, without independent investigation, that (i) each of the Loan
Parties is duly organized and validly existing under the laws of the
jurisdiction of its organization and has full power and authority (corporate
and otherwise) to execute, deliver and perform each of the Transaction
Documents to which it is a party and (ii) the execution, delivery and
performance by each of the Loan Parties of each of the Transaction Documents to
which it is a party has been duly authorized by all necessary corporate or
other organizational action and does not (A) contravene the certificate of
incorporation (or certificate of formation, as applicable), charter, bylaws,
memorandum and articles of association (or other organizational documents, as
applicable) or other constituent documents of such party, (B) conflict with,
constitute a default under or result in the breach of any agreement, judgment,
injunction, order, decree, document or instrument binding on such Loan Party or
(C) violate or require any governmental or regulatory authorization or other
action under any provision of law, rule or regulation applicable to the Loan
Parties other than New York law or United States Federal law applicable to
borrowers or pledgors generally.  We
have also assumed that the Credit and Reimbursement Agreement is the legal,
valid and binding obligation of each Bank Party, enforceable against such Bank
Party, as the case may be, in accordance with its terms.


 


Based upon the
foregoing examination and assumptions and upon such other investigation as we
have deemed necessary and subject to the qualifications set forth below, we are
of the following opinions:


 


1.  Each of the Credit and
Reimbursement Agreement and the Closing Date Notes is the legal, valid and
binding obligation of each Loan Party party thereto, enforceable against each
such Loan Party in accordance with its terms.


 


2.  The Security Agreement is
the legal, valid and binding obligation of the Borrower, enforceable against
the Borrower in accordance with its terms, and, to the extent that the Borrower
has rights in the “Collateral” referred to in the Security Agreement (as to
which we express no opinion), continues to create a valid security interest
enforceable against the Borrower with respect to such Security Agreement
Collateral as security for the payment of the Secured Obligations (as defined
in the Collateral Trust Agreement).  We
express no opinion as to matters of perfection or priority of such security
interest, and refer you to the New York Opinion and the Delaware Opinion with
regard to such matters to the extent covered therein.


 


Our opinions above are subject to the following qualifications:


 


2

















 


(i)  Our opinions above are
subject to the effect of any applicable bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar law affecting creditors’ rights generally.


 


(ii)  Our opinions above are
also subject to the effect of general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing (regardless of whether considered in a proceeding in equity or at
law).  Further, pursuant to such
equitable principles, any provisions of the Transaction Documents which provide
that the grant of a security interest shall not be affected by changes in or
amendments to the Transaction Documents might be enforceable only to the extent
that such changes or amendments were not so material as to constitute a new
contract among the parties.


 


(iii)  We express no opinion as
to the creation of any security interest in Collateral that is excluded from
Article 9 of the New York Uniform Commercial Code under § 9-109(c) and (d)
thereof.


 


(iv)  We express no opinion as
to enforceability of indemnification provisions in the Transaction Documents to
the extent that enforcement thereof is contrary to public policy regarding the
exculpation of criminal violations, intentional harm and acts of gross
negligence or recklessness.


 


(v)  Our opinion in paragraph 2
above is also subject to the effect of applicable law that may limit the
enforceability or render ineffective certain of the provisions of the Security
Agreement, although the inclusion of such provisions does not affect the
validity of the Security Agreement as a whole, and there exist legally adequate
remedies for a realization of the principle benefits afforded thereby.


 


(vi)  Our opinions expressed
above are limited to the law of the State of New York and the Federal law of
the United States, and we do not express any opinion herein concerning any
other law.  Without limiting the
generality of the foregoing, we express no opinion as to the effect of the law
of any jurisdiction other than the State of New York wherein any Bank Party may
be located or wherein enforcement of the Credit and Reimbursement Agreement or
any other Transaction Document may be sought that limits the rates of interest
legally chargeable or collectible.


 


A copy of this
opinion letter may be delivered by any of you to any Person that becomes a Bank
Party in accordance with the provisions of the Credit and Reimbursement
Agreement. Any such Bank Party may rely on the opinions expressed above as if
this opinion letter were addressed and delivered to such Bank Party on the date
hereof.


 


This opinion
letter speaks only as of the date hereof. 
We expressly disclaim any responsibility to advise you or any other Bank
Party who is permitted to rely on any opinion expressed herein as specified in
the next preceding paragraph of any development or circumstance of any kind
including any change of law or fact that may occur after the date of this
opinion letter even though such development may affect the legal analysis, a
legal conclusion or


 


3

















 


any other matter set forth in
or relating to this opinion letter. 
Accordingly, any Bank Party relying on this opinion letter at any time
should seek advice of its counsel as to the proper application of this opinion
letter at such time.


 


	
   

  	
  Very truly
  yours,

  



 


MEO:gi:mar


 


4

















 


EXHIBIT C-1 to the


Third Amended and Restated Credit


and Reimbursement Agreement


 


FORM OF REVOLVING CREDIT LOAN FACILITY
ASSIGNMENT AND ASSUMPTION AGREEMENT


 


AGREEMENT
dated as of
                
    , 200   among [ASSIGNOR] (the “Assignor”), [ASSIGNEE] (the “Assignee”), each Revolving Fronting Bank
and, as required pursuant to the terms of the Credit Agreement (as defined
below), THE AES CORPORATION (the “Borrower”),
and CITICORP USA, Inc., as Administrative Agent (the “Agent”).


 


W I T N E S S E T H


 


WHEREAS, this
Assignment and Assumption Agreement (the “Agreement”)
relates to the Third Amended and Restated Credit and Reimbursement Agreement
(the “Credit and Reimbursement Agreement”) dated as of March 17, 2004 among the
Borrower, the Subsidiary Guarantors party thereto, the Banks party thereto, the
Agent and Citibank, N.A., as Collateral Agent; and


 


WHEREAS, the
Assignor proposes to assign to the Assignee all of the rights of the Assignor
under the Credit and Reimbursement Agreement in respect of a portion of its
Revolving Credit Loan Commitment thereunder in an amount equal to
$                      
(the “Assigned Amount”), together with a corresponding portion of its
outstanding Revolving Credit Loans and participating interests in outstanding
Revolving Letter of Credit Liabilities, and the Assignee proposes to accept
assignment of such rights and assume the corresponding obligations from the
Assignor on such terms;


 


NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:


 


1.   Definitions.  All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit and
Reimbursement Agreement.


 


2.   Assignment.  The Assignor hereby assigns and sells to the
Assignee all or a proportionate part of all of the rights of the Assignor under
the Credit and Reimbursement Agreement and the other Financing Documents to the
extent of the Assigned Amount, 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 Assignor holding a Revolving Credit Loan
Commitment of not less than $1,000,000), and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the obligations of the Assignor
under the Credit and Reimbursement Agreement and the other Financing Documents
to the extent of the Assigned Amount, including the purchase from the Assignor
of the corresponding portion of the principal amount of the Revolving Credit


 

















 


Loans made by the Assignor
outstanding at the date hereof and the corresponding portion of participating
interests purchased by the Assignor in Revolving Letter of Credit Liabilities
outstanding on the date hereof.  Upon
the execution and delivery hereof by the Assignor, the Assignee, each Revolving
Fronting Bank and, as required pursuant to the terms of the Credit and
Reimbursement Agreement, the Borrower and the Agent, and the payment of the
amounts specified in Section 3 hereof required to be paid on the date hereof,
(i) the Assignee shall, as of the date hereof, succeed to the rights and be
obligated to perform the obligations of a Bank Party under the Credit and
Reimbursement Agreement with a Revolving Credit Loan Commitment in an amount
equal to the Assigned Amount and (ii) the Revolving Credit Loan Commitment of
the Assignor shall, as of the date hereof, be reduced by a like amount and the
Assignor shall be released from its obligations under the Credit and
Reimbursement Agreement to the extent such obligations have been assumed by the
Assignee.


 


3.   Payments.  As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in lawful money of the United States of America the amount
heretofore agreed between them.(1)  It
is understood that commitment fees and/or letter of credit commissions accrued
to the date hereof are for the account of the Assignor, and each of the
Assignor and the Assignee hereby agrees that if it receives any amount under
the Credit and Reimbursement Agreement which is for the account of the other
party hereto, it shall receive the same for the account of such other party to
the extent of such other party’s interest therein and shall promptly pay the
same to such other party.


 


4.   Consent
of the Revolving Fronting Banks, the Borrower and the Agent.  This Agreement is conditioned upon the
consent of each Revolving Fronting Bank and, as required pursuant to the terms
of the Credit and Reimbursement Agreement, the Borrower and the Agent.  The execution of this Agreement by each
Revolving Fronting Bank and, as required pursuant to the terms of the Credit
and Reimbursement Agreement, the Borrower and the Agent is evidence of this
consent.


 


5.   Non-Reliance
on Assignor.  The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of any
Obligor, or the validity and enforceability of the Obligations of any Obligor
in respect of the Credit and Reimbursement Agreement or any other Financing
Document.  The Assignee acknowledges
that it has, independently and without reliance on the Assignor, any other Bank
Party, any Revolving Credit Loan Bank or the Agent, and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and will continue to be responsible for
making its own independent appraisal of the business, affairs and financial
condition of the Borrower.


 












(1)                                  Amount
should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee.  It may be preferable in an appropriate case
to specify these amounts generically or by formula rather than as a fixed sum.


 

















 


6.   Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of New York.


 


7.   Counterparts.  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.


 

















 


IN WITNESS WHEREOF, the parties have caused this Assignment and
Assumption Agreement to be executed and delivered by their duly authorized
officers as of the date first above written.


 


	
   

  	
  [ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [EACH
  REVOLVING FRONTING BANK]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [CITICORP
  USA, Inc., as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:](2)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [THE AES
  CORPORATION, as Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:](2)

  



 












(2)  As required pursuant to the terms of the Credit Agreement.


 

















 


EXHIBIT C-2 to the


Third Amended and Restated Credit


and Reimbursement Agreement


 


FORM OF TERM LOAN FACILITY ASSIGNMENT AND
ASSUMPTION AGREEMENT


 


AGREEMENT
dated as of
                  
   , 200   among [ASSIGNOR] (the “Assignor”), [ASSIGNEE] (the “Assignee”) and CITICORP USA, Inc., as
Administrative Agent (the “Agent”).


 


W I T N E S S E T H


 


WHEREAS, this
Assignment and Assumption Agreement (the “Agreement”)
relates to the Third Amended and Restated Credit and Reimbursement Agreement
(the “Credit and Reimbursement Agreement”)
dated as of March 17, 2004 among The AES Corporation (the “Borrower”), the Subsidiary Guarantors party
thereto, the Banks party thereto, the Agent and Citibank, N.A., as Collateral
Agent; and


 


WHEREAS, the
Assignor proposes to assign to the Assignee all of the rights of the Assignor
under Credit and Reimbursement Agreement in respect of all or a portion of its
outstanding Term Loan in an amount equal to
$                       
(the “Assigned Amount”) and the
Assignee proposes to accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms;


 


NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:


 


1.   Definitions.  All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit and
Reimbursement Agreement.


 


2.   Assignment.  The Assignor hereby assigns and sells to the
Assignee all or a proportionate part of all of the rights of the Assignor under
the Credit and Reimbursement Agreement and the other Financing Documents to the
extent of the Assigned Amount, 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 Assignor holding a Term Loan Commitment of not
less than $1,000,000), and the Assignee hereby accepts such assignment from the
Assignor and assumes all of the obligations of the Assignor under the Credit
and Reimbursement Agreement and the other Financing Documents to the extent of
the Assigned Amount, including the purchase from the Assignor of the
corresponding portion of the Term Loan. 
Upon the execution and delivery hereof by the Assignor, the Assignee and
the Agent, and the payment of the amounts specified in Section 3 hereof
required to be paid on the date hereof, (i) the Assignee shall, as of the date


 

















 


hereof, succeed to the rights
and be obligated to perform the obligations of a Bank Party under the Credit
and Reimbursement Agreement with a Term Loan in an amount equal to the Assigned
Amount, and (ii) the Assignor shall be released from its obligations under the
Credit and Reimbursement Agreement to the extent such obligations have been
assumed by the Assignee.


 


3.   Payments.  As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in lawful money of the United States of America the amount
heretofore agreed between them. (1) It is understood that commitment fees
and/or letter of credit commissions accrued to the date hereof are for the
account of the Assignor, and each of the Assignor and the Assignee hereby
agrees that if it receives any amount under the Credit and Reimbursement
Agreement which is for the account of the other party hereto, it shall receive
the same for the account of such other party to the extent of such other
party’s interest therein and shall promptly pay the same to such other party.


 


4.   Consent
of the Agent.  This Agreement is
conditioned upon the consent of the Agent. 
The execution of this Agreement by the Agent is evidence of this
consent.


 


5.   Non-Reliance
on Assignor.  The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of any
Obligor, or the validity and enforceability of the Obligations of any Obligor
in respect of the Credit and Reimbursement Agreement or any other Financing
Document.  The Assignee acknowledges
that it has, independently and without reliance on the Assignor, any other Bank
Party and the Agent, and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement and will continue to be responsible for making its own
independent appraisal of the business, affairs and financial condition of the
Borrower.


 


6.   Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of New York.


 


7.   Counterparts.  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.


 


[SIGNATURE PAGES IMMEDIATELY FOLLOW]


 


 












(1)                                  Amount
should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee.  It may be preferable in an appropriate case
to specify these amounts generically or by formula rather than as a fixed sum.


 

















 


IN WITNESS WHEREOF, the parties have caused this Assignment and
Assumption Agreement to be executed and delivered by their duly authorized
officers as of the date first above written.


 


	
   

  	
  [ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CITICORP
  USA, Inc., as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  



 

















 


EXHIBIT C-3 to the


Third Amended and Restated Credit


and Reimbursement Agreement


 


FORM OF THIRD PARTY FRONTING BANK ASSIGNMENT

AND ASSUMPTION AGREEMENT


 


AGREEMENT dated as of
                 
   , 200   among [ASSIGNOR] (the “Assignor”), [ASSIGNEE] (the “Assignee”), THE AES CORPORATION (the “Borrower”) and CITICORP USA, Inc., as
Administrative Agent (the “Agent”).


 


W I T N E S S E T H


 


WHEREAS, this Assignment and Assumption Agreement (the “Agreement”) relates to the Third Amended
and Restated Credit and Reimbursement Agreement (the “Credit and Reimbursement Agreement”) dated
as of March 17, 2004 among the Borrower, the Subsidiary Guarantors party
thereto, the Banks party thereto, and the Agent; and


 


WHEREAS, the Assignor proposes to assign to the Assignee all (and not
less than all) of the rights and obligations of the Assignor under the Credit
and Reimbursement Agreement (the “Assigned
Amount”) and the Assignee proposes to accept assignment of such
rights and assume the corresponding obligations from the Assignor on such
terms;


 


NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:


 


1.   Definitions.  All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit and
Reimbursement Agreement.


 


2.   Assignment.  The Assignor hereby assigns and sells to the
Assignee all but not less than all of the rights of the Assignor under the
Credit and Reimbursement Agreement and the other Financing Documents to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
from the Assignor and assumes all of the obligations of the Assignor under the
Credit and Reimbursement Agreement and the other Financing Documents to the
extent of the Assigned Amount.  Upon the
execution and delivery hereof by the Assignor, the Assignee, the Borrower and the
Agent, and the payment of the amounts specified in Section 3 hereof required to
be paid on the date hereof, (i) the Assignee shall, as of the date hereof,
succeed to the rights and be obligated to perform the obligations of a
Revolving Fronting Bank under the Credit and Reimbursement Agreement with
Revolving Letter of Credit Liabilities in an amount equal to the Assigned
Amount and (ii) Revolving Letter of Credit Liabilities of the Assignor shall,
as of the date hereof, be reduced by a like amount and the Assignor shall be
released from


 

















 


its obligations under the
Credit and Reimbursement Agreement to the extent such obligations have been
assumed by the Assignee.


 


3.             Payments.  As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in lawful money of the United States of America the amount
heretofore agreed between them. 
(1)  It is understood that
commitment fees and/or letter of credit commissions accrued to the date hereof
are for the account of the Assignor, and each of the Assignor and the Assignee
hereby agrees that if it receives any amount under the Credit and Reimbursement
Agreement which is for the account of the other party hereto, it shall receive
the same for the account of such other party to the extent of such other
party’s interest therein and shall promptly pay the same to such other party.


 


4.             Consent of the
Borrower and the Agent.  This
Agreement is conditioned upon the consent of the Borrower and the Agent.  The execution of this Agreement by the
Borrower and the Agent is evidence of this consent.


 


5.             Non-Reliance on
Assignor.  The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of any
Obligor, or the validity and enforceability of the Obligations of any Obligor
in respect of the Credit and Reimbursement Agreement or any other Financing
Document.  The Assignee acknowledges
that it has, independently and without reliance on the Assignor, any other Bank
Party or the Agent, and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement and will continue to be responsible for making its own
independent appraisal of the business, affairs and financial condition of the
Borrower.


 


6.             Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.


 


7.             Counterparts.  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.


 


[SIGNATURE PAGES IMMEDIATELY FOLLOW]


 


 












(1)                                  Amount
should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee.  It may be preferable in an appropriate case
to specify these amounts generically or by formula rather than as a fixed sum.


 

















 


IN WITNESS
WHEREOF, the parties have caused this Assignment and Assumption Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.


 


	
   

  	
  [ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  THE AES
  CORPORATION, as Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  CITICORP
  USA, Inc., as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  



 

















 


EXHIBIT D to the


Third Amended and Restated


Credit and Reimbursement Agreement


 


FORM OF REVOLVING FRONTING BANK AGREEMENT


 


               
    , 200  


 


Citicorp USA, Inc., as Agent

388 Greenwich Street, 21st Floor

New York, New York 10013


 


Attention:  Stuart Glen


 


Ladies and Gentlemen:


 


Reference is
hereby made to the Third Amended and Restated Credit and Reimbursement
Agreement dated as of March 17, 2004 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”) among The AES Corporation,
a Delaware corporation (the “Borrower”), the Subsidiary Guarantors party thereto, the
Banks party thereto, Citibank, N.A., as Collateral Agent and Citicorp USA,
Inc., as Agent.  The capitalized terms
defined in the Credit Agreement and not otherwise defined herein are used
herein as therein defined.


 


Section
1.  Obligations Under the Credit
Agreement.  The undersigned hereby
agrees, as of the date first above written, to be bound as a Revolving Fronting
Bank by all of the terms and conditions of the Credit Agreement to the same
extent as each of the other Revolving Fronting Banks thereunder and agrees to
issue letters of credit in an aggregate Available Amount not to exceed
$[               ]
at any time outstanding pursuant to and in accordance with Section 2.03 of the
Credit Agreement.  The undersigned
further agrees, as of the date first above written, that each reference in the
Credit Agreement to a “Revolving Fronting Bank” shall also mean and be a
reference to the undersigned, and each reference in any other Financing
Document to a “Lender Party”
shall also mean and be a reference to the undersigned in its capacity as
Revolving Fronting Bank.


 


Section
2.  Representations and Warranties.  The undersigned hereby represents and
warrants that it (i) is a Revolving Credit Loan Bank under the Credit Agreement
or (ii) meets the definition of a “Third Party Fronting Bank”, as defined in
the Credit Agreement.


 


Section
3.  Delivery by Telecopier.  Delivery of an executed counterpart of a
signature page to this Revolving Fronting Bank Agreement by telecopier shall be
effective as delivery of an original executed counterpart of this Revolving
Fronting Bank Agreement.


 


Section 4.  Non-Reliance.  The undersigned acknowledges
that it has, independently and without reliance on any Revolving Fronting Bank,
any other Bank Party and


 

















 


the Agent, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the business, affairs
and financial condition of the Borrower.


 


Section
5.  Governing Law; Jurisdiction;
Waiver of Jury Trial, Etc.  This
Revolving Fronting Bank Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.


 


 


	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NAME OF
  REVOLVING FRONTING BANK]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged
  on the date hereof by:

  	
   

  
	
   

  	
   

  
	
  CITICORP
  USA, INC., as Agent

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title: