Document:

EXHIBIT 10.1

 

AMENDMENT NUMBER TEN TO

LOAN AND SECURITY AGREEMENT

 

THIS AMENDMENT NUMBER TEN TO LOAN AND
SECURITY AGREEMENT (this “Amendment”), is effective as of
December 31, 2003, between WELLS FARGO FOOTHILL,
INC., a California corporation (“Foothill”), formerly known as
Foothill Capital Corporation, with a place of business located at 2450 Colorado
Avenue, Suite 3000 West, Santa Monica, California 90404, and IMAGE
ENTERTAINMENT, INC., a California corporation (“Borrower”), with its
chief executive office located at 9333 Oso Avenue, Chatsworth, California
91311, with reference to the following facts:

 

WHEREAS, Borrower
has requested that Foothill amend that certain Loan and Security Agreement
dated as of December 28, 1998 (as amended, restated, supplemented or
otherwise modified from time to time, the “Agreement”), between Foothill and
Borrower as set forth herein;

 

WHEREAS,
Borrower has informed Foothill that Borrower has failed to
comply with (a) the Tangible Net Worth financial covenant set forth in Section 6.12(a)
of the Agreement measured as of December 31, 2003 and (b) the EBITDA
financial covenant set forth in Section 6.12(b) of the Agreement
with respect to the fiscal period ending on December 31, 2003
(collectively, the “Designated Events of Default”);

 

WHEREAS,
Borrower has requested that Foothill (a) waive the Designated
Events of Default, and (b) consent to the amendment of the Agreement as set
forth herein; and

 

WHEREAS, subject to
the satisfaction of the conditions set forth herein, Foothill is willing to so
waive the Designated Events of Default and to so amend the Agreement in
accordance with the terms and conditions hereof.

 

NOW, THEREFORE, in
consideration of the above recitals and the mutual promises contained herein,
Foothill and Borrower hereby agree as follows:

 

SECTION 1.         DEFINED TERMS.

 

Capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed to
them in the Agreement.

 

SECTION 2.         AMENDMENTS TO
THE AGREEMENT.

 

(a)           Section 1
of the Agreement is hereby amended by adding the following definition in
alphabetical order:

 

“Tenth Amendment Fee”
has the meaning set forth in Section 2.10(i).

 

(b)           Section 2.10
of the Agreement is hereby amended by deleting the word “and” at the end of
clause (g), by deleting the period at the end of clause (h) and replacing it
with “, and”, and by adding the following new clause (i):

 

 

“(i)          Tenth
Amendment Fee.  An amendment
fee in the amount of $17,000 (the “Tenth Amendment Fee”), which
amendment fee shall be fully earned and non-refundable as of the date hereof,
and shall be charged to Borrower’s Loan Account on such date.”

 

(c)           Section 6.12
of the Agreement is hereby amended and restated in its entirety as follows:

 

“6.12       Financial
Covenants.

 

(a)           Tangible
Net Worth.  Borrower shall maintain
Tangible Net Worth, measured on a fiscal quarter-end basis, of (i) not less
than the amount indicated below with respect to the fiscal quarter-end dates
indicated below plus (ii) seventy percent (70%), on an aggregate
cumulative basis, of the net offering proceeds received by Borrower from the
primary issuance of its equity securities or from the issuance of rights,
options, warrants, or convertible or exchangeable securities containing the
right to subscribe for or purchase shares of Borrower’s equity securities:

 

	
  03/31/04

  	
   

  	
  $

  	
  19,262,000

  	
   

  
	
  06/30/04

  	
   

  	
  $

  	
  18,668,000

  	
   

  
	
  09/30/04

  	
   

  	
  $

  	
  17,826,000

  	
   

  
	
  12/31/04

  	
   

  	
  $

  	
  18,585,000

  	
   

  
	
  03/31/05

  	
   

  	
  $

  	
  18,590,000

  	
   

  
	
  06/30/05

  	
   

  	
  $

  	
  18,243,000

  	
   

  
	
  09/30/05

  	
   

  	
  $

  	
  17,502,000

  	
   

  

 

(b)           EBITDA.  Borrower shall maintain EBITDA, for each
fiscal period set forth below, of not less than the amount indicated below
opposite such fiscal period:

 

	
  for the immediately preceding three-month period ending 03/31/04

  	
   

  	
  $

  	
  1,105,000

  	
   

  
	
  for the immediately preceding three-month period ending 06/30/04

  	
   

  	
  $

  	
  219,000

  	
   

  
	
  for the immediately
  preceding three-month period ending 09/30/04

  	
   

  	
  $

  	
  858,000

  	
   

  
	
  for the immediately
  preceding three-month period ending 12/31/04

  	
   

  	
  $

  	
  1,370,000

  	
   

  
	
  for the immediately
  preceding three-month period ending 03/31/05

  	
   

  	
  $

  	
  1,587,000

  	
   

  
	
  for the immediately
  preceding three-month period ending 06/30/05

  	
   

  	
  $

  	
  403,000

  	
   

  
	
  for the immediately
  preceding three-month period ending 09/30/05

  	
   

  	
  $

  	
  911,000

  	
   

  

 

 

SECTION 3.         WAIVER.

 

Effective as of the date
hereof, Foothill hereby waives the Designated Events of Default.  

 

SECTION 4.         REPRESENTATIONS
AND WARRANTIES.  

 

Borrower hereby
represents and warrants to Foothill that (a) the execution, delivery, and
performance of this Amendment and of the Agreement, as amended by this
Amendment, are within its corporate powers, have been duly authorized by all
necessary corporate action, and are not in contravention of any law, rule, or
regulation, or any order, judgment, decree, writ, injunction, or award of any
arbitrator, court, or governmental authority, or of the terms of its charter or
bylaws, or of any contract or undertaking to which it is a party or by which
any of its properties may be bound or affected, and (b) this Amendment and the
Agreement, as amended by this Amendment, constitute Borrower’s legal, valid,
and binding obligation, enforceable against Borrower in accordance with its
terms.

 

SECTION 5.         CONDITIONS
PRECEDENT TO AMENDMENT.  

 

The satisfaction of each
of the following, unless waived or deferred by Foothill in its sole discretion,
shall constitute conditions precedent to the effectiveness of this Amendment:

 

(a)           The representations and
warranties in this Amendment, the Agreement as amended by this Amendment, and
the other Loan Documents shall be true and

 

 

correct in all respects on and as of the date hereof,
as though made on such date (except to the extent that such representations and
warranties relate solely to an earlier date);

 

(b)           No Event of Default or
event which with the giving of notice or passage of time would constitute an
Event of Default shall have occurred and be continuing on the date hereof, nor
shall result from the consummation of the transactions contemplated herein; 

 

(c)           No injunction, writ,
restraining order, or other order of any nature prohibiting, directly or
indirectly, the consummation of the transactions contemplated herein shall have
been issued and remain in force by any governmental authority against Borrower
or Foothill; 

 

(d)           All other documents,
agreements, instruments, and legal matters in connection with the transactions
contemplated by this Amendment shall have been delivered or executed or
recorded and shall be in form and substance satisfactory to Foothill and its
counsel; and

 

(e)           Foothill shall have
received the Tenth Amendment Fee in full in immediately available funds, which
Tenth Amendment Fee shall be paid by Borrower to Foothill by being charged to
Borrower’s Loan Account as of the date hereof.

 

SECTION 6.         FURTHER
ASSURANCES.  

 

Borrower shall execute
and deliver all agreements, documents, and instruments, in form and substance
satisfactory to Foothill, and take all actions as Foothill may reasonably
request from time to time fully to consummate the transactions contemplated
under this Amendment and the Agreement, as amended by this Amendment.

 

SECTION 7.         MISCELLANEOUS.

 

(a)           Upon the effectiveness
of this Amendment, each reference in the Agreement to “this Agreement”,
“hereunder”, “herein”, “hereof” or words of like import referring to the
Agreement shall mean and refer to the Agreement as amended by this Amendment.

 

(b)           Upon the effectiveness
of this Amendment, each reference in the Loan Documents to the “Loan
Agreement”, “thereunder”, “therein”, “thereof” or words of like import
referring to the Agreement shall mean and refer to the Agreement as amended by
this Amendment.

 

(c)           This Amendment shall be
governed by and construed in accordance with the laws of the State of
California.

 

(d)           This Amendment can only
be amended by a writing signed by both Foothill and Borrower.

 

 

(e)           This Amendment may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one
and the same Amendment.  Delivery of an
executed counterpart of this Amendment by telefacsimile shall be equally as
effective as delivery of an original executed counterpart of this
Amendment.  Any party delivering an
executed counterpart of this Amendment by telefacsimile also shall deliver an
original executed counterpart of this Amendment but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability,
and binding effect of this Amendment.

 

(f)            This Amendment
reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.

 

 

IN WITNESS WHEREOF, the
parties hereto have caused this Amendment to be duly executed as of the date
first written above.

 

 

	
   

  	
  IMAGE ENTERTAINMENT, INC.,

  a California corporation  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Jeff M. Framer 

  	
   

  
	
   

  	
  Title:

  	
   Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO FOOTHILL, INC.,

  a California corporation, formerly known as Foothill

  Capital Corporation  

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Trent Smart 

  	
   

  
	
   

  	
  Title:

  	
   Vice PresidentExhibit 4.1

 

 

THE AES CORPORATION

 

as Issuer

 

AND

 

WELLS FARGO BANK MINNESOTA, N.A.

 

as Trustee

 

 

TENTH SUPPLEMENTAL INDENTURE

 

Dated as of February 13, 2004

 

TO

 

SENIOR INDENTURE

 

Dated as of December 8, 1998

 

 

 

7.750% Senior
Notes due 2014

 

 

 

The TENTH
SUPPLEMENTAL INDENTURE, is dated as of this 13th day of February, 2004 (the
“Tenth Supplemental Indenture”), between THE AES CORPORATION, a corporation
duly organized and existing under the laws of the State of Delaware
(hereinafter sometimes referred to as the “Company”), and WELLS FARGO BANK
MINNESOTA, N.A. as successor trustee to BANK ONE, NATIONAL ASSOCIATION, a
national banking association, as trustee (hereinafter referred to as the
“Trustee”).

 

WHEREAS, the
Company entered into a Senior Indenture dated as of December 8, 1998 between
the Company and the Trustee to provide for the future issuance of its senior
debentures, notes or other evidences of indebtedness (collectively, the
“Securities”), said Securities to be issued from time to time in series as
might be determined by the Company pursuant to the Indenture and, in an
unlimited aggregate principal amount;

 

WHEREAS, the
Company and the Trustee have entered into a First Supplemental Indenture, a
Second Supplemental Indenture, a Third Supplemental Indenture, a Fourth
Supplemental Indenture, a Fifth Supplemental Indenture, a Sixth Supplemental
Indenture, a Seventh Supplemental Indenture, an Eighth Supplemental Indenture
and a Ninth Supplemental Indenture providing for the creation and issuance of various
series of Securities and/or amendments to the Indenture (the Indenture, as so
amended and supplemented by the forgoing supplemental indentures and this Tenth
Supplemental Indenture is hereinafter referred to as, the “Indenture”);

 

WHEREAS,
pursuant to the terms of the Indenture, the Company desires to provide for the
establishment of a new series of its Securities to be known as its 7.750%
Senior Notes due 2014 (said series being hereinafter referred to as the “Series
H Senior Notes”), the form and substance of such Series H Senior Notes and the
terms, provisions and conditions thereof to be set forth as provided in the
Indenture and this Tenth Supplemental Indenture;

 

WHEREAS, the
Company desires and has requested the Trustee to join with it in the execution
and delivery of this Tenth Supplemental Indenture, and all requirements
necessary to make this Tenth Supplemental Indenture a valid instrument, in
accordance with its terms, and to make the Series H Senior Notes, when executed
by the Company and authenticated and delivered by the Trustee, the valid
obligations of the Company; and

 

NOW,
THEREFORE, in consideration of the purchase and acceptance of the Series H
Senior Notes by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Series H Senior Notes
and the terms, provisions and conditions thereof, the Company covenants and
agrees with the Trustee as follows:

 

2

 

ARTICLE ONE

 

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

 

SECTION  1.1. 
TERMS DEFINED IN THE INDENTURE.

 

Each
capitalized term used but not defined in this Tenth Supplemental Indenture
shall have the meaning assigned to such term in the Indenture.

 

SECTION  1.2.  CERTAIN DEFINITIONS.

 

The following
definitions are hereby added to the definitions contained in Section 1.1 of the
Indenture, but only with respect to the Series H Senior Notes issued in
accordance with the provisions hereof:

 

“Attributable
Debt” means the present value (discounted at the rate of 7.750% per annum
compounded monthly) of the obligations for rental payments required to be paid
during the remaining term of any lease of more than 12 months.

 

“Consolidated
Net Assets” means the aggregate amount of assets (less reserves and other
deductible items) after deducting current liabilities, as shown on the
consolidated balance sheet of the Company and its Subsidiaries contained in the
latest annual report to the stockholders of the Company and prepared in
accordance with GAAP.

 

“DTC” shall
have the meaning provided in Section 2.1 hereof.

 

“Funded Debt”
means indebtedness for borrowed money having a maturity of, or by its terms
extendible or renewable for, a period of more than 12 months after the date of
the determination of the amount thereof.

 

“Principal
Property” means any building, structure or other facility (together with the
land on which it is erected and fixtures comprising a part thereof) used
primarily for manufacturing, processing, research, warehousing or distribution,
owned or leased by the Company and having a net book value in excess of 2% of
Consolidated Net Assets, other than any such building, structure or other
facility or portion thereof which is a pollution control facility financed by
state or local governmental obligations or which the principal executive
officer, president and principal financial officer of the Company determine in
good faith is not of material importance to the total business conducted or
assets owned by the Company and its Subsidiaries as an entirety.

 

3

 

ARTICLE TWO

 

THE SERIES H SENIOR NOTES

 

SECTION  2.1. 
FORM.

 

The Series H
Senior Notes shall be substantially in the form of Exhibit A hereto, which is a
part of this Tenth Supplemental Indenture, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
the Indenture and this Tenth Supplemental Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of any securities
exchange or as may, consistently herewith, be determined by the Officers of the
Company executing such Series H Senior Notes, as evidenced by their execution
of the Series H Senior Notes.

 

The Series H
Senior Notes will initially be issued as Registered Global Securities.

 

The Company
initially appoints The Depository Trust Company (“DTC”) and the Trustee to act
as Depositary and custodian, respectively, with respect to the Series H Senior
Notes.

 

The Company
initially appoints the Trustee to act as Paying Agent and Registrar with
respect to the Series H Senior Notes.

 

SECTION  2.2. 
DESIGNATION AND AMOUNT.

 

(a)           The Series H Senior Notes shall be
entitled the “7.750% Senior Notes due 2014” of the Company.

 

(b)           The Trustee shall
authenticate and deliver Series H Senior Notes for original issue on the date
hereof in an aggregate principal amount of $500,000,000.

 

(c)           The Company may,
subject to the terms of the Indenture and applicable law, issue additional
Series H Senior Notes under this Tenth Supplemental Indenture.  The Series H Senior Notes issued on February
13, 2004 and any additional Series H Senior Notes subsequently issued shall be
treated as a single class for all purposes of this Tenth Supplemental
Indenture.

 

SECTION  2.3. 
INTEREST.

 

Interest on
the Series H Senior Notes shall be payable in the amount, on the dates and in
the manner provided for in the form of the Series H Senior Note attached hereto
as Exhibit A.

 

SECTION  2.4. 
DENOMINATIONS.

 

The Series H
Senior Notes shall be Registered Securities in denominations of $1,000 or any
integral multiple thereof.

 

4

 

SECTION  2.5. 
PLACE OF PAYMENT.

 

The place of
payment for the Series H Senior Notes shall be the Borough of Manhattan, The
City of New York, or Minneapolis, Minnesota. 
So long as the Series H Senior Notes are in the form of Registered
Global Securities, the Company agrees that payments of interest on, and any
portion of the Principal of, the Series H Senior Notes shall be made by the
Paying Agent, upon receipt from the Company of immediately available funds,
directly to the Depositary (by Federal funds wire transfer).

 

ARTICLE THREE

 

OPTIONAL REDEMPTION OF 

THE SERIES H SENIOR NOTES

 

SECTION  3.1. 
OPTIONAL REDEMPTION.

 

The Series H
Senior Notes may be redeemed at the option of the Company, as a whole or from
time to time in part, at the times and at the Redemption Price specified in the
form of the Series H Senior Note attached hereto as Exhibit A.

 

ARTICLE FOUR

 

ADDITIONAL COVENANTS APPLICABLE

TO THE SERIES H SENIOR NOTES

 

SECTION  4.1. 
RESTRICTIONS ON SECURED DEBT.

 

If the Company
shall incur, issue, assume or guarantee any indebtedness for borrowed money
represented by notes, bonds, debentures or other similar evidences of
indebtedness, secured by a mortgage, pledge or other lien on any Principal
Property or any capital stock or indebtedness held directly by the Company of
any Subsidiary of the Company, the Company shall secure the Series H Senior
Notes equally and ratably with (or prior to) such indebtedness, so long as such
indebtedness shall be so secured, unless after giving effect thereto the
aggregate amount of all such indebtedness so secured, together with all
Attributable Debt in respect of sale and leaseback transactions involving
Principal Properties, would not exceed 15% of the Consolidated Net Assets of
the Company.

 

The foregoing
restriction shall not apply to, and there shall be excluded in computing
secured indebtedness for the purpose of such restriction, indebtedness secured
by (a) property of any Subsidiary of the Company, (b) liens on property of, or
on any shares of stock or debt of, any corporation existing at the time such
corporation becomes a Subsidiary, (c) liens in favor of the Company or any
Subsidiary, (d) liens in favor of U.S. or foreign governmental bodies to secure
partial, progress, advance or other payments, (e) liens on property, shares of
stock or debt existing at the time of acquisition thereof (including
acquisition through merger or consolidation), purchase money mortgages and
construction cost mortgages existing at or incurred within 180 days of the time
of acquisition thereof, (f) liens existing on the first date on which any
Series H Senior Note is authenticated by the Trustee, (g) liens under one or
more

 

5

 

credit facilities for
indebtedness in an aggregate principal amount not to exceed $900,000,000 at any
time outstanding, (h) liens incurred in connection with pollution control,
industrial revenue or similar financings, and (i) any extension, renewal or
replacement of any debt secured by any liens referred to in the foregoing clauses
(a) through (h), inclusive.

 

SECTION  4.2. 
RESTRICTIONS ON SALES AND LEASEBACKS.

 

The Company
shall not enter into any sale and leaseback transaction involving any Principal
Property, the acquisition or completion of construction and commencement of
full operation of which has occurred more than 180 days prior thereto, unless
(a) the Company could incur a lien on such property under the restrictions
described in Section 4.1 hereof in an amount equal to the Attributable Debt
with respect to the sale and leaseback transaction without equally and ratably
securing the Series H Senior Notes or (b) the Company, within 180 days after
the sale or transfer by the Company, applies to the retirement of its Funded
Debt an amount equal to the greater of (i) the net proceeds of the sale of the
Principal Property sold and leased pursuant to such arrangement or (ii) the
fair market value of the Principal Property so sold and leased as determined by
the board of directors of the Company; provided that the amount to be
applied to the retirement of Funded Debt of the Company shall be reduced by (A)
the principal amount of any Series H Senior Notes delivered within 180 days
after such sale or transfer to the Trustee for retirement and cancellation, and
(B) the principal amount of Funded Debt, other than Series H Senior Notes,
voluntarily retired by the Company within 180 days after such sale or transfer;
provided further that no retirement referred to in this clause (b) may be
effected by payment at maturity or pursuant to any mandatory sinking fund
payment or any mandatory prepayment provision.

 

ARTICLE FIVE

 

ADDITIONAL EVENTS OF DEFAULT APPLICABLE

TO THE SERIES H SENIOR NOTE

 

SECTION  5.1. 
ADDITIONAL EVENTS OF DEFAULT.

 

Pursuant to
Section 6.1 (f) of the Indenture, an “Event of Default” shall be deemed to
occur with respect to the Series H Senior Notes if an event of default, as
defined in any indenture or instrument evidencing or under which the Company
has as of the date of this Tenth Supplemental Indenture or shall thereafter
have outstanding any indebtedness, shall happen and be continuing and either
(a) such default results from the failure to pay the principal of such
indebtedness in excess  of $50
million at final maturity of such indebtedness or (b) as a result of such default
the maturity of such indebtedness shall have been accelerated so that the same
shall be or become due and payable prior to the date on which the same would
otherwise have become due and payable, and such acceleration shall not be
rescinded or annulled within 60 days and the principal amount of such
indebtedness, together with the principal amount of any other indebtedness of
the Company in default, or the maturity of which has been accelerated,
aggregates $50 million or more; provided that the Trustee shall not be
charged with knowledge of any such default unless written notice thereof shall
have been given to the Trustee by the Company, by the holder or an agent of the
holder of any such indebtedness, by the trustee then acting under any indenture
or other instrument under which such default shall have occurred, or

 

6

 

by the holders of not less than
25% in the aggregate principal amount of the Series H Senior Notes at the time
outstanding; and provided  further that if such default shall be
remedied or cured by the Company or waived by the holder of such indebtedness,
then the Event of Default described under this Tenth Supplemental Indenture
shall be deemed likewise to have been remedied, cured or waived without further
action on the part of the Trustee, any Holder of Series H Senior Notes or any
other person.

 

ARTICLE SIX

 

MISCELLANEOUS PROVISIONS

 

SECTION  6.1.  RATIFICATION.

 

The Indenture,
as supplemented by this Tenth Supplemental Indenture, is in all respects
ratified and confirmed.  This Tenth
Supplemental Indenture shall be deemed part of the Indenture in the manner and
to the extent provided herein and therein.

 

SECTION  6.2. 
COUNTERPARTS.

 

This Tenth
Supplemental Indenture may be executed in any number of counterparts each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument.

 

7

 

IN WITNESS
WHEREOF, the parties hereto have caused this Tenth Supplemental Indenture to be
duly executed and attested, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.

 

	
   

  	
  THE AES
  CORPORATION, as

  
	
   

  	
  the Company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name :

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO
  BANK MINNESOTA, N.A.,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name :

  	
   

  
	
   

  	
  Title:

  	
   

  

 

8

 

EXHIBIT A

 

[FORM OF FACE OF SERIES H SENIOR NOTE]

 

This Series H
Senior Note is a Registered Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary.  This Series H
Senior Note is exchangeable for Series H Senior Notes registered in the name of
a person other than the Depositary or its nominee only in the limited
circumstances described in the Indenture. 
Unless and until it is exchanged in whole or in part for Securities in
definitive registered form, this Security may not be transferred except as a
whole by the Depositary to the nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.

 

Unless this
Series H Senior Note is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any Series H
Senior Note issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.

 

A-1

 

	
  No. 1

  	
   

  	
  CUSIP NO.:

  	
  00130HBC8

  
	
   

  	
   

  	
  ISIN NO.:

  	
  US00130HBC88

  

 

 

$500,000,000

 

 

7.750% SENIOR NOTE DUE 2014

 

 

THE AES
CORPORATION promises to pay

to Cede & Co. or registered assigns the principal sum of

FIVE HUNDRED MILLION DOLLARS ($500,000,000) on

March 1, 2014.

 

Interest
Payment Dates: March 1 and September 1 of each year, commencing September 1,
2004

 

Record
Dates:  The fifteenth calendar day prior
to each Interest Payment Date.

 

 

	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Signature

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Signature

  

 

 

Dated:  February 13, 2004

 

Certificate of Authentication

 

This is one of
the 7.750% Senior Notes due 2014 referred to in the within-mentioned Indenture.

 

 

	
   

  	
  Wells Fargo
  Bank Minnesota, N.A.,

  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Signature

  

 

 

A-2

 

[REVERSE OF FORM OF SERIES H SENIOR NOTE]

 

THE AES CORPORATION

 

7.750% SENIOR NOTE DUE 2014

 

1.     Interest.  THE AES CORPORATION, a Delaware corporation
(the “Company,” which definition shall include any successor thereto in
accordance with the Indenture (as defined below), promises to pay, until the
principal hereof is paid or made available for payment, interest on the
principal amount set forth on the reverse side hereof at a rate of 7.750% per
annum.  Interest on the Series H
Senior Notes will accrue from and including the most recent date to which
interest has been paid or, if no interest has been paid, from February 13, 2004
through but excluding the date on which interest is paid.  Interest shall be payable in arrears on
March 1 and September 1 of each year (each an “Interest Payment Date”), commencing
September 1, 2004.  Interest will be
computed on the basis of a 360-day year of twelve 30-day months.

 

2.     Method of Payment.  The Company will pay interest on the Series
H Senior Notes (except defaulted interest) to the Persons who are registered
Holders of Series H Senior Notes at the close of business on the fifteenth
calendar day prior to each Interest Payment Date (each, a “Regular Record
Date”).  Holders must surrender Series H
Senior Notes to a Paying Agent to collect principal payments.  The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts.  At
the Company’s option, interest may be paid by check mailed to the registered
address of the Holder of this Series H Senior Note.

 

3.     Paying Agent and
Registrar.  Initially, Wells Fargo
Bank Minnesota, N.A. (the “Trustee”) will act as Paying Agent and
Registrar.  The Company may change any
Paying Agent, Registrar or co-Registrar without notice.

 

4.     Indenture.  The Company issued the Series H Senior Notes
under an Indenture dated as of December 8, 1998 between the Company and the
Trustee as supplemented by the Ninth Supplemental Indenture dated as of April
3, 2003 and the Tenth Supplemental Indenture dated as of February 13, 2004
between the Company and the Trustee (said Indenture, as so supplemented, the
“Indenture”).  This Series H Senior Note
is one of an issue of Securities of the Company issued under the Indenture.  The terms of the Series H Senior Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb) as
amended from time to time.  The Series H
Senior Notes are subject to all such terms, and Holders of the Series H Senior
Notes are referred to the Indenture and such Act for a statement of them.  Capitalized terms used herein and not
otherwise defined have the meanings set forth in the Indenture.  The Series H Senior Notes are general
unsecured and unsubordinated obligations of the Company ranking pari passu with
all of the Company’s unsecured and unsubordinated obligations.  The Company may, subject to the terms of the
Indenture and applicable law, issue additional Series H Senior Notes under the Tenth
Supplemental Indenture.  The Series H
Senior Notes issued on February 13, 2004 and any additional Series H Senior
Notes subsequently issued shall be treated as a single class for all

 

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purposes of the
Tenth Supplemental Indenture.  The
Indenture limits the ability of the Company to incur certain secured
indebtedness and to enter into certain sale and leaseback transactions.

 

5.     Optional Redemption.  The Series H Senior Notes are subject to
redemption upon not less than 30 nor more than 60 days notice mailed to each
holder of Series H Senior Notes to be redeemed at its address appearing in the
Security Register, at any time prior to maturity as a whole or in part, at the
election of the Company at a price (the “Redemption Price”) equal to the sum of
(i) 100% of the principal amount thereof plus accrued interest to the
redemption date plus (ii) the Make-Whole Amount, if any.

 

“Make-Whole
Amount” means the excess, if any, of (i) the aggregate present value as of the
date of such redemption of each dollar of principal being redeemed and the
amount of interest (exclusive of interest accrued to the redemption date) that
would have been payable in respect of such dollar if such prepayment had not
been made, determined by discounting, on a semiannual basis, such principal and
interest at the Reinvestment Rate (determined on the Business Day preceding the
date of such redemption) from the respective dates on which such principal and
interest would have been payable if such payment had not been made, over (ii)
the aggregate principal amount of the Series H Senior Notes being redeemed.

 

“Reinvestment
Rate” means 0.75% (three-quarters of one percent) plus the arithmetic mean of
the yields under the respective headings “This Week” and “Last Week” published
in the Statistical Release under the caption “Treasury Constant Maturities” for
the maturity (rounded to the nearest month) corresponding to the maturity of
the principal being prepaid.  If no
maturity exactly corresponds to such maturity, yields for the two published
maturities most closely corresponding to such maturity shall be calculated
pursuant to the immediately preceding sentence and the Reinvestment Rate shall
be interpolated or extrapolated from such yields on a straight-line
basis, rounding in each of such relevant periods to the nearest month.  For the purpose of calculating the
Reinvestment Rate, the most recent Statistical Release published prior to the
date of determination of the Make-Whole Amount shall be used.

 

“Statistical
Release” means the statistical release designated “H.15(519)” or any successor
publication which is published weekly by the Federal Reserve System and which
establishes yields on actively traded U.S. government securities adjusted to
constant maturities or, if such statistical release is not published at the
time of any determination under the Indenture, then such other reasonably
comparable index which shall be designated by the Company.

 

6.     Sinking Fund.  No sinking fund is provided for the Series H
Senior Notes.

 

7.     Denominations, Transfer,
Exchange.  The Series H Senior Notes
are in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000.  A Holder may
transfer or exchange Series H Senior Notes in accordance with the
Indenture.  The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay to it any taxes and fees required by law or permitted by
the Indenture.  The Registrar need not
transfer or exchange any Series H Senior Notes or portion of a

 

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Series E
Series Note selected for redemption, or transfer or exchange any Series E
Series Notes for a period of 15 days before selection of such Series E Series
Notes to be redeemed.

 

8.     Persons Deemed Owners.  The registered holder of a Series H Senior
Note may be treated as the owner of it for all purposes.

 

9.     Unclaimed Money.  If money for the payment of principal or
interest remains unclaimed for two years, the Trustee or Paying Agent will pay
the money back to the Company at its written request.  After that, Holders entitled to the money must look to the
Company for payment as general creditors unless an “abandoned property” law
designates another Person.

 

10.   Amendment, Supplement,
Waiver.  The Company and the Trustee
may, without the consent of the holders of any outstanding Series H Senior
Notes, amend, waive or supplement the Indenture or the Series H Senior Notes
for certain specified purposes, including, among other things, curing
ambiguities, defects or inconsistencies, maintaining the qualification of the
Indenture under the Trust Indenture Act of 1939 or making any other change that
does not adversely affect the rights of any Holder in any material
respect.  Other amendments and
modifications of the Indenture or the Series H Senior Notes may be made by the
Company and the Trustee with the consent of the Holders of not less than a
majority of the aggregate principal amount of the outstanding Securities of all
series affected, subject to certain exceptions requiring the consent of the
Holders of the particular Series H Senior Notes.

 

11.   Successor Corporation.  When a successor corporation assumes all the
obligations of its predecessor under the Series H Senior Notes and the
Indenture and the transaction complies with the terms of Article 5 of the
Indenture, the predecessor corporation, subject to certain exceptions, will be
released from those obligations.

 

12.   Defaults and Remedies.  Events of Default are set forth in the
Indenture.  Subject to certain
limitations in the Indenture, if an Event of Default (other than an Event of
Default specified in Section 6.1(d) or (e) of the Indenture with respect to the
Company) occurs and is continuing, then the holders of not less than 25% in
aggregate principal amount of the outstanding Series H Senior Notes may, or the
Trustee may, declare the principal of, plus accrued interest, if any, to be due
and payable immediately.  If an Event of
Default specified in Section 6.1(d) or (e) of the Indenture with respect to the
Company occurs and is continuing, the principal of and accrued interest on all
of the Series H Senior Notes shall ipso  facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.  Holders of
the Series H Senior Notes may not enforce the Indenture or the Series H Senior
Notes except as provided in the Indenture. 
The Trustee may require indemnity reasonably satisfactory to it before
it enforces the Indenture or the Series H Senior Notes.  Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Series H Senior Notes may
direct the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders of the
Series H Senior Notes notice of any continuing default (except a default in
payment of principal or interest or a failure to comply with Article 5 of the
Indenture) if it determines in good faith that withholding notice is in their
interests.  The Company must furnish an
annual compliance certificate to the Trustee.

 

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13.   Trustee Dealing with
Company.  The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not Trustee.

 

14.   No Recourse Against
Others.  A director, officer,
employee, stockholder or beneficiary, as such, of the Company shall not have
any liability for any obligations of the Company under the Series H Senior
Notes or the Indenture or for any claim based on, in respect of or by reason
of, such obligations or their creation. 
Each Holder of the Series H Senior Notes by accepting a Series H Senior
Note waives and releases all such liability. 
The waiver and release are part of the consideration for the issue of
the Series H Senior Notes.

 

15.   Defeasance.  The Indenture contains provisions (which
provisions apply to this Series H Senior Note) for defeasance at any time of
(a) the entire indebtedness of the Company in respect of this Series H Senior
Note and (b) certain restrictive covenants and Defaults and Events of Default,
in each case upon compliance by the Company with certain conditions set forth
therein.

 

16.   Authentication.  This Series H Senior Note shall not be valid
until the Trustee signs the certificate of authentication on the other side of
this Series H Senior Note.

 

17.   Abbreviations.  Customary abbreviations may be used in the
name of a Holder of Series H Senior Notes or an assignee, such as:  TEN COM (= tenants in common), TENANT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).

 

18.   GOVERNING LAW.  THE INDENTURE AND THIS SERIES H SENIOR NOTE
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 

The Company will furnish to any Holder of Series H Senior Notes upon
written request and without charge a copy of the Indenture.  Requests may be made to:

 

THE AES CORPORATION

1001 North 19th Street, Suite 2000

Arlington, Virginia  22209

Telephone:  (703) 522-1315

Telecopy:  (703) 528-4510

 

Attention: 
General Counsel

 

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ASSIGNMENT FORM

 

If you the
holder want to assign this Series H Senior Note, fill in the form below and have
your signature guaranteed:

 

	
  I or we
  assign and transfer this Series H Senior Note to

  	
   

  
	
   

  
	
  (Insert
  assignee’s social security or tax ID number)

  	
   

  
	
  (Print or
  type assignee’s name, address and zip code) and irrevocably appoint

  	
   

  
	
  agent to
  transfer this Series H Senior Note on the books of the Company.  The agent may substitute another to act
  for him.

  
	
   

  
				

 

 

	
  Date:

  	
   

  	
   

  	
  Your
  signature:

  	
   

  
	
   

  	
   

  	
  (Sign
  exactly as your name appears on the

  other side of this Series H Senior Note)

  
	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  
						

 

Signatures must be guaranteed by an “eligible guarantor institution”
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion Program
(“STAMP”) or such other “signature guarantee program” as may be determined by
the Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.

 

A-7

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