EXHIBIT 4.1

THE AES CORPORATION
as the Company

and

WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION

as Trustee

Senior Indenture

Dated as of December 13, 2002

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                                   ARTICLE 1
                   DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01.  Definitions....................................................1
Section 1.02.  Other Definitions.............................................19
Section 1.03.  Rules of Construction.........................................20

                                   ARTICLE 2
                                   THE NOTES

Section 2.01.  Forms Generally, Certain Issues Regarding Preconditions
               for Transfer and Payment......................................20
Section 2.02.  Execution and Authentication..................................21
Section 2.03.  Amount Unlimited..............................................21
Section 2.04.  Denomination and Date of Securities; Payment of Interest......22
Section 2.05.  Registrar and Paying Agent; Agents Generally..................22
Section 2.06.  Paying Agent to Hold Money in Trust...........................23
Section 2.07.  Restrictions on Transfer and Exchange.........................23
Section 2.08.  Registration, Transfer and Exchange...........................24
Section 2.09.  Replacement Notes.............................................27
Section 2.10.  Outstanding Notes.............................................27
Section 2.11.  Temporary Notes...............................................28
Section 2.12.  Cancellation..................................................28
Section 2.13.  CUSIP Numbers.................................................29
Section 2.14.  Defaulted Interest............................................29

                                   ARTICLE 3
                                   REDEMPTION

Section 3.01.  Optional Redemption...........................................29
Section 3.02.  Mandatory Redemption Upon Receipt of Net Cash Proceeds
               from Certain Transactions.....................................29
Section 3.03.  Additional Mandatory Redemption...............................30
Section 3.04.  Notice of Redemption; Partial Redemptions.....................31
Section 3.05.  Payment of Notes Called for Redemption........................32


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     (1) Note: The Table of Contents shall not for any purposes be deemed to be
a part of the Indenture.


                                       i

Section 3.06.  Exclusion of Certain Notes from Eligibility for Selection
               for Redemption................................................33

                                   ARTICLE 4
                                   COVENANTS

Section 4.01.  Payment of Notes..............................................33
Section 4.02.  Maintenance of Office or Agency...............................34
Section 4.03.  Noteholders' Lists............................................34
Section 4.04.  Certificate to Trustee........................................34
Section 4.05.  Reports by the Company........................................35
Section 4.06.  Limitation on Liens...........................................35
Section 4.07.  Equal and Ratable Liens.......................................36
Section 4.08.  Restriction on Subsidiary Guarantees..........................36
Section 4.09.  Limitation on Sale Leaseback Transactions.....................37
Section 4.10.  Transfer of Certain Net Cash Proceeds Received by
               Subsidiaries..................................................37

                                   ARTICLE 5
                             SUCCESSOR CORPORATION

Section 5.01.  When Company May Merge, Etc...................................38
Section 5.02.  Successor Substituted.........................................39

                                   ARTICLE 6
                              DEFAULT AND REMEDIES

Section 6.01.  Events of Default.............................................39
Section 6.02.  Acceleration..................................................40
Section 6.03.  Other Remedies................................................42
Section 6.04.  Waiver of Past Defaults.......................................42
Section 6.05.  Control by Majority...........................................42
Section 6.06.  Limitation on Suits...........................................42
Section 6.07.  Rights of Holders to Receive Payment..........................43
Section 6.08.  Collection Suit by Trustee....................................43
Section 6.09.  Trustee May File Proofs of Claim..............................43
Section 6.10.  Application of Proceeds.......................................44
Section 6.11.  Restoration of Rights and Remedies............................44
Section 6.12.  Undertaking for Costs.........................................44
Section 6.13.  Rights and Remedies Cumulative................................45
Section 6.14.  Delay or Omission Not Waiver..................................45


                                      ii

                                   ARTICLE 7
                                    TRUSTEE

Section 7.01.  General.......................................................45
Section 7.02.  Certain Rights of Trustee.....................................45
Section 7.03.  Individual Rights of Trustee..................................47
Section 7.04.  Trustee's Disclaimer..........................................47
Section 7.05.  Notice of Default.............................................47
Section 7.06.  Compensation and Indemnity....................................47
Section 7.07.  Replacement of Trustee........................................48
Section 7.08.  Successor Trustee by Merger, Etc..............................49
Section 7.09.  Money Held in Trust...........................................50

                                   ARTICLE 8
           SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS

Section 8.01.  Satisfaction and Discharge of Indenture.......................50
Section 8.02.  Application by Trustee of Funds Deposited for Payment
               of Notes......................................................51
Section 8.03.  Repayment of Moneys Held by Paying Agent......................51
Section 8.04.  Return of Moneys Held by Trustee and Paying Agent
               Unclaimed for Two Years.......................................51
Section 8.05.  Defeasance and Discharge of Indenture.........................51
Section 8.06.  Defeasance of Certain Obligations.............................53
Section 8.07.  Reinstatement.................................................54

                                   ARTICLE 9
                      AMENDMENTS, SUPPLEMENTS AND WAIVERS

Section 9.01.  Without Consent of Holders....................................54
Section 9.02.  With Consent of Holders.......................................55
Section 9.03.  Revocation and Effect of Consent..............................56
Section 9.04.  Notation on or Exchange of Notes..............................57
Section 9.05.  Trustee to Sign Amendments, Etc...............................57

                                   ARTICLE 10
                                 MISCELLANEOUS

Section 10.01.  Notices......................................................57
Section 10.02.  Certificate and Opinion as to Conditions Precedent...........59
Section 10.03.  Statements Required in Certificate or Opinion................59
Section 10.04.  Evidence of Ownership........................................59
Section 10.05.  Rules by Trustee, Paying Agent or Registrar..................59
Section 10.06.  Payment Date Other Than a Business Day.......................60
Section 10.07.  Governing Law................................................60


                                      iii

Section 10.08.  No Adverse Interpretation of Other Agreements................60
Section 10.09.  Successors...................................................60
Section 10.10.  Duplicate Originals..........................................60
Section 10.11.  Separability.................................................60
Section 10.12.  Table of Contents, Headings, Etc.............................60
Section 10.13.  Incorporators, Stockholders, Officers and Directors
                of Company Exempt from Individual Liability..................60
Section 10.14.  Judgment Currency............................................61

                                   ARTICLE 11
                             SECURITY ARRANGEMENTS

Section 11.01.  Security.....................................................61
Section 11.02.  Notice of Payment, Discharge or Defeasance...................63

INDENTURE, dated as of December 13, 2002, between The AES Corporation, a Delaware corporation, as the Company, and Wells Fargo Bank Minnesota, National Association, a national banking association, as Trustee.

RECITALS OF THE COMPANY

WHEREAS, the Company has duly authorized the execution and delivery of the Indenture to provide for the issuance from time to time of up to such Principal amount or amounts as may from time to time be authorized of the Company's 10% Senior Secured Notes Due 2005 (the "Notes") in accordance with the terms of this Indenture; and

WHEREAS, all things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done, and the Company has done all things necessary to make the Notes, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company as hereinafter provided;

NOW, THEREFORE THIS INDENTURE WITNESSETH

For and in consideration of the premises and the purchases of the Notes by the Holders thereof, the Company and the Trustee mutually covenant and agree for the equal and proportionate benefit of the respective Holders as follows:

ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01. Definitions.

"Additional Collateral Trust Agreement Collateral" means the "Additional Collateral" referred to in the Collateral Trust Agreement.

"Additional Notes" means any notes issued under the Indenture in addition to the Original Notes having the same terms in all respects as the Original Notes except that interest will accrue on the Additional Notes from the most recent date to which interest has been paid on the Notes (other than Additional Notes) or, if no interest has been paid, from the Issue Date.

"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 Company and permitted to be retained by the Company under the terms of this Indenture during such fiscal year less (iii) the aggregate amount of any Investments (other than Temporary Cash Investments) made in cash by the

Company during such fiscal year, less (iv) the aggregate principal amount of Debt repaid by the Company during such fiscal year, excluding (x) Debt in respect of revolving loans and letters of credit under the terms of the Senior Secured Credit Facilities (unless the corresponding revolving credit commitments are permanently reduced in connection with such repayment), (y) Debt prepaid with the Net Cash Proceeds of Asset Sales or Covered Capital Markets Transactions and (z) repayments of Debt financed by incurring other debt less (iv) the aggregate amount for such fiscal year of Corporate Charges plus, to the extent not included in Corporate Charges for such fiscal year, payments made by the Company of dividends and interest on the Tecons and the NY Sells Loan; provided that so long as any amounts or commitments are outstanding under the Senior Secured Credit Facilities, Adjusted Free Cash Flow shall have, at any time of determination, the meaning set forth at such time of determination in the Senior Secured Credit Facilities.

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

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

(B) corporate overhead expenses.

"AES Business" means a Power Supply Business or other business operated or managed (including on a joint basis with others), directly or indirectly, by the Company.

"Affiliate" means (i) any Person that directly, or indirectly through one or more intermediaries, controls the Company (a "Controlling Person"), or (ii) any Person (other than the Company or a Subsidiary) which is controlled by or is under common control with a Controlling Person or (iii) as to any Person (other than the Company 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 any Registrar, Paying Agent, transfer agent or Authenticating Agent.

"Agent Member" means a member of, or a participant in, the Depositary.

"Asset Sale" means any sale, lease or other disposition (including any such transaction effected by way of merger or consolidation or any Equity Issuance by the Company's Subsidiaries) by the Company or any of its Subsidiaries of any investment in any Subsidiary or of all the assets of a Subsidiary substantially in its entirety; provided that a disposition of such assets not excluded by the following paragraph 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.

The term "Asset Sale" does not include: (i) any disposition or issuance in connection with directors' qualifying shares or investments by foreign nationals mandated by applicable law; (ii) any sale, transfer, conveyance, lease or other disposition of assets governed by Article 5; (iii) any sale of shares of preferred stock of a Subsidiary; (iv) the grant of a security interest by any Person in any assets or shares of Capital Stock securing a borrowing by, or contractual performance obligation of, such Person or any Subsidiary of such Person; (v) 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; (vi) dispositions of contract rights, development rights and resource data made in connection with the initial development of a Power Supply Business, made prior to the commencement of commercial operation of such Power Supply Business; (vii) transactions made in order to enhance the repatriation of cash proceeds in connection with any sale or other disposition in respect of the Capital Stock and/or property of any Subsidiary where such Subsidiary is organized under the laws of any jurisdiction other than the United States or any state thereof or any Subsidiary of the type described in Section 936 of the Internal Revenue Code of 1986, as amended, to the extent that the proceeds of such sale or other disposition are received by a Person subject in respect of such proceeds to the tax laws of a jurisdiction other than the United States or any state thereof or in order to increase the after-tax proceeds thereof available for immediate distribution; (viii) 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; (ix) (1) a disposition resulting from the bona fide exercise by governmental authority of its claimed or actual power of eminent domain; (2) a realization upon a security interest; (3) any cash payments not otherwise prohibited under this Indenture; (4) any sale, transfer, conveyance, lease or other disposition of an asset 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; (5) any disposition of any Equity Interest in a Power Supply Business pursuant to the terms of a joint venture agreement, shareholders agreement, supply agreement or similar arrangement that requires one shareholder to transfer its interest to another Person upon terms and in circumstances customary for the industry; (6) any disposition of assets subject to a lien transferred to the lien holder or its designee in satisfaction or settlement of the lien holder's claim; (7) sales of inventory in the ordinary course of its business and the granting of any option or other right to purchase, lease or otherwise acquire inventory in the ordinary course of its business; or (8) sales, transfers or other dispositions of assets among the Company and its Subsidiaries and Affiliates or among the Company's Subsidiaries and Affiliates.

"Attributable Debt" means the present value (discounted at the rate of 7.375% 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.

"Banc of America Securities Option Agreement" means the option agreement dated December 12, 2002 between Banc of America Securities LLC and the Company.

"Board of Directors" means either the Board of Directors of the Company or any committee of such Board duly authorized to act hereunder.

"Board Resolution" means one or more resolutions of the Board of Directors, certified by the secretary or an assistant secretary to have been duly adopted and to be in full force and effect on the date of certification, and delivered to the Trustee.

"Business Day" means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law or regulation to close in the City of New York.

"BVI Cayman Pledge Agreement" means the Charge and Assignment over Shares dated December 12, 2002 between AES International Holdings II, Ltd., as Chargor, Wilmington Trust Company, as Corporate Trustee and Bruce L. Bisson, as Individual Trustee.

"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 Company 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 Markets Debt" means any Debt that is a security (other than syndicated commercial loans) that is eligible for resale in the United States pursuant to Rule 144A under the Securities Act or outside the United States pursuant to Regulation S of the Securities Act or a security (other than syndicated commercial loans) that is sold or subject to resale pursuant to a registration statement under the Securities Act.

"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.

"Certificated Note" means a Registered Note in individual form without interest coupons.

"Clearstream" means Clearstream Banking SA.

"Collateral" means the Security Agreement Collateral, the Additional Collateral Trust Agreement Collateral and the BVI Collateral.

"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 (as defined in the Collateral Trust Agreement) for the benefit of the Secured Holders.

"Collateral Trust Agreement" means the agreement dated December 12, 2002 among the Grantors referred to therein, as Grantors and the Collateral Trustees.

"Collateral Trustees" means Wilmington Trust Company, as Corporate Trustee and Bruce L. Bisson, as Individual Trustee under the Collateral Trust Agreement.

"Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act.

"Company" means the party named as such in the first paragraph of this Indenture until a successor replaces it pursuant to Article 5 of this Indenture and thereafter means the successor.

"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.

"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.

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

(A) interest expense for such period;

(B) rental expense for such period; and

(C) dividends paid on the Company's Redeemable Stock during such period.

"Corporate Trust Office" means the office of the Trustee at which the corporate trust business of the Trustee shall, at any particular time, be principally administered, which office is, at the date of this Indenture, located at Sixth Street and Marquette Avenue, Minneapolis, Minnesota.

"Covered Asset Sale" means any Asset Sale other than (a) any Asset Sale of any of the Capital Stock or assets of any of the Company's Subsidiaries that guarantee the revolving credit facility and/or tranche A term loan facility under the Senior Secured Credit Facilities (the "Revolving Credit Loan/Tranche A Loan Guarantors"), to the extent that the Net Cash Proceeds of such Asset Sale are applied as set forth in the Senior Secured Credit Facilities, to repay amounts under the Senior Secured Credit Facilities that are guaranteed by the Revolving Credit Loan/Tranche A Loan Guarantors or (b) any Asset Sale of any of the Capital Stock or assets of the Company's Subsidiary that guarantees the tranche "C" term loan facility under the Senior Secured Credit Facilities (the "Tranche C Term Loan Guarantor"), to the extent that the Net Cash Proceeds of such Asset Sale are applied as set forth in the Senior Secured Credit Facilities, to repay amounts under the Senior Secured Credit Facilities that are guaranteed by the Tranche C Term Loan Guarantor; provided that, for the avoidance of doubt, to the extent that the Net Cash Proceeds referred to in clauses (a) and (b) are not applied as set forth therein, such Net Cash Proceeds shall be deemed to be, for all purposes under this Indenture, Net Cash Proceeds from a Covered Asset Sale;

provided further that so long as any amounts or commitments are outstanding under the Senior Secured Credit Facilities, Covered Asset Sale shall have the meaning set forth in the Senior Secured Credit Facilities.

"Covered Capital Markets Transaction" means (i) an Equity Issuance by the Company; (ii) the incurrence of Capital Markets Debt by the Company; and (iii) the incurrence of Capital Markets Debt by a Subsidiary for the purpose of transferring the Net Cash Proceeds thereof to the Company.

"Creditors' Portion" means, in respect of the Net Cash Proceeds of any Covered Asset Sale, the following:

(i) with respect to the first $600,000,000 of Net Cash Proceeds of Covered Asset Sales received after the Original Issue Date, 50% of such Net Cash Proceeds;

(ii) with respect to the next $400,000,000 of Net Cash Proceeds of Covered Asset Sales received after the Original Issue Date (after giving effect to the Net Cash Proceeds of Covered Asset Sales described in clause (i)), 80% of such Net Cash Proceeds of Covered Asset Sales; and

(iii) with respect to all other Net Cash Proceeds of Covered Asset Sales received after the Original Issue Date (after giving effect to the Net Cash Proceeds of Covered Asset Sales described in clauses (i) and
(ii)), 60% of such Net Cash Proceeds of Covered Asset Sales.

provided that so long as any amounts or commitments are outstanding under the Senior Secured Credit Facilities, Creditors' Portion shall have, at any time of determination, the meaning set forth at such time of determination in the Senior Secured Credit Facilities.

"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 GAAP; (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 under the Senior Secured Credit Facilities 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 any of the revolving letters of credit or other letters of credit issued under the Senior Secured Credit Facilities, which by their terms require that any drawing under such letters of credit be applied only to reimburse such issuer for amounts paid by such issuer under such letter of credit. The obligations of the Company under any Capital Commitment or under any agreement, in the form of indemnity or contingent equity contribution agreement or otherwise, pursuant to which the Company 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 Event of Default as defined in Section 6.01 and any event that is, or after notice or passage of time or both would be, an Event of Default.

"Depositary" means the depositary of each Global Note, which initially will be DTC or, as to an Offshore Global Note, a common depositary for Euroclear and Clearstream unless and until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Depositary" shall mean or include each Person who is then a Depositary hereunder.

"DTC" means The Depository Trust Company, a New York corporation.

"DTC Legend" means the legend set forth in Exhibit C.

"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 Issuance" 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 option).

"Euroclear" means Euroclear Bank S.A./N.V., and its successors or assigns, as operator of the Euroclear system.

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

"Excess Asset Sale Proceeds" means the product of (a) the Creditors' Portion of all Net Cash Proceeds of Covered Asset Sales received by the Company in excess of the first $600 million of Net Cash Proceeds of Covered Asset Sales received by the Company, multiplied by (b) a fraction, the numerator of which is the total aggregate Principal amount of Notes outstanding on such date, and the denominator of which is the sum of (x) the aggregate Principal amount of Notes outstanding on such date, plus (y) the aggregate Senior Secured Lenders' Exposure on such date; provided that, if on the date or dates on which the first $600 million of Net Cash Proceeds of Covered Asset Sales are received, the Senior Secured Credit Facilities have been repaid in full and all commitments thereunder have been terminated, then the phrase "in excess of the first $600 million of Net Cash Proceeds of Covered Asset Sales received by the Company" shall immediately and automatically be deleted from clause (a) of this definition.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Final Maturity Date" means December 12, 2005; provided, however, that if, prior to July 15, 2005, the Company's 4.50% Junior Subordinated Convertible Debentures have not been refinanced to mature on a date after December 12, 2005, then Final Maturity Date means July 15, 2005; provided further that if the Final Maturity Date occurs on a day that is not a Euro-Dollar Business Day, the Final Maturity 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 Final Maturity Date shall be the next preceding Euro-Dollar Business Day.

"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 determination of the amount thereof.

"GAAP" means generally accepted accounting principles as in effect from time to time, applied on a basis consistent (except for changes concurred in by the

Company's independent public accountants) with the most recent audited consolidated financial statements of the Company and its Consolidated Subsidiaries delivered to the Trustee; provided that, if the Company notifies the Trustee that the Company wishes to amend any covenant in Article 3 or 4 to eliminate the effect of any change in generally accepted accounting principles on the operation of such covenant, then the Company'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 Company and the required Noteholders.

"Global Note" means a Registered Note in global form without interest coupons.

"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 Company to provide capital to an AES Business under a Capital Commitment. The term "Guarantee" used as a verb has a corresponding meaning.

"Holder" or "Noteholder" means the registered holder of any Note.

"Indenture" means this Indenture as originally executed and delivered or as it may be amended or supplemented from time to time by one or more indentures supplemental to this Indenture entered into pursuant to the applicable provisions of this Indenture.

"Interest Payment Date" means each June 15 and December 15 of each year, commencing with June 15, 2003.

"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).

"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 Indenture, the Company 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.

"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 semi-annual 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 Notes being redeemed.

"Material Subsidiary" of any Person means, as of any date, any Subsidiary of which such Person's proportionate share of such Subsidiary's total assets (after intercompany eliminations) exceeds 15 percent of the total assets of such Person on a consolidated basis.

"Minimum Liquidity Level" means as of the end of any fiscal year, an amount equal to (i) the aggregate amount of cash and Temporary Cash Investments of the Company on such date and (ii) the aggregate amount of the unused revolving credit loan commitments available to be drawn under the Senior Secured Credit Facilities on such date.

"Net Cash Proceeds" means (a) with respect to any Asset Sale, cash payments received (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received (including any cash received upon sale or disposition of such note or receivable), excluding any other consideration received in the form of assumption by the acquiring Person of Debt or other obligations relating to the property disposed of in such Asset Sale or received in any other noncash form) therefrom, in each case, net of all legal, title and recording tax expenses, commissions and other 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 required to be accrued as a liability under GAAP (i) as a consequence of such Asset Sale, (ii) as a result of the repayment of any Debt in any jurisdiction other than the jurisdiction where the property

disposed of was located or (iii) as a result of any repatriation to the United States of any proceeds of such Asset Sale, and in each case net of a reasonable reserve for the after tax-cost of any indemnification payments (fixed and contingent) attributable to seller's indemnities to the purchaser undertaken by the Company 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 during the term of the Notes), and net of all payments made on any debt which is secured by such property, in accordance with the terms of any lien upon or with respect to such property or which must by its terms or by applicable law be repaid out of the proceeds from such Asset Sale, and net of all distributions and other payments made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Sale; provided that, so long as any amounts or commitments are outstanding under the Senior Secured Credit Facilities, the Net Cash Proceeds with respect to any Asset Sale shall mean the greater of (x) the amount determined pursuant to the foregoing definition and (y) the amount determined pursuant to the definition of Net Cash Proceeds set forth at such time of determination in the Senior Secured Credit Facilities, and

(b) with respect to any Covered Capital Markets Transaction, the aggregate amount of cash received from time to time on or after the Original Issue Date (whether as initial consideration or through payment or disposition of deferred consideration) by the Company and its Subsidiaries from such Covered Capital Markets 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 Capital Markets 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, is required to be repaid with all or a portion of the proceeds of such capital markets transaction, and (iii) any portion of the proceeds of such Covered Capital Markets Transaction required to prepay or collateralize interest, dividends or fees payable in respect of such Covered Capital Markets Transaction;

provided that, with respect to both clause (a) and (b) above, for purposes of determining Net Cash Proceeds received by a Subsidiary required to be applied pursuant to Section 3.02 of this Indenture, only that portion of such Net Cash Proceeds received by the Company from such Subsidiary in accordance with
Section 4.10 shall be included.

"Notes" means any of the notes, as defined in the first paragraph of the recitals hereof, that are authenticated and delivered under this Indenture.

"Noteholders' Ratable Share" means, in connection with the application of Adjusted Free Cash Flow pursuant to 3.02(b), a percentage equal to a fraction, the numerator of which is the aggregate Principal amount of Notes outstanding on

such date, and the denominator of which is the sum of (x) the aggregate Principal amount of Notes outstanding on such date, plus (y) the aggregate Senior Secured Lenders' Exposure on such date.

"NY SELLS Loan" means the $300 million secured equity-linked loan due in 2004 issued by the Company's Consolidated Subsidiary, AES New York Funding LLC.

"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(f) or (g) of this Indenture. Without limiting the generality of the foregoing, the Obligations of the Company under the Indenture include (a) the obligation to pay principal, interest, charges, expenses, fees, attorneys' fees and disbursements, indemnities and other amounts payable by the Company under the Indenture and (b) the obligation of the Company to reimburse any amount in respect of any of the foregoing that the Trustee, in its sole discretion, may elect to pay or advance on behalf of the Company.

"Officer" means, with respect to the Company, the chairman of the Board of Directors, the president or chief executive officer, any vice president, the chief financial officer, the treasurer or any assistant treasurer, or the secretary or any assistant secretary.

"Officers' Certificate" means a certificate signed in the name of the Company (i) by the chairman of the board of directors, the president or chief executive officer or a vice president and (ii) by the chief financial officer, the treasurer or any assistant treasurer, or the secretary or any assistant secretary, complying with Section 10.03 and delivered to the Trustee. Each such certificate shall include (except as otherwise expressly provided in this Indenture) the statements provided in Section 10.03.

"Offshore Global Note" means a Global Note representing Notes issued and sold pursuant to Regulation S.

"Opinion of Counsel" means a written opinion signed by legal counsel, who may be an employee of or counsel to the Company, satisfactory to the Trustee and complying with Section 10.03. Each such opinion shall include the statements provided in Section 10.03, if and to the extent required thereby.

"Ordinary Course Cash Needs" means for any Subsidiary, the cash working capital and other needs of such Subsidiary and its Subsidiaries in the ordinary course of business (net of other sources of funds available or expected to be available to it from any source other than from the Company and its Subsidiaries), determined in good faith by the Company consistent in all material respects with past practice (subject to appropriate adjustment to the extent past practice has been modified to reflect changes in the nature of the business and operations of the Subsidiaries), including reasonably anticipated needs for repaying Debt and other obligations and making investments in its business not inconsistent in any material respect with this Indenture, provided that in determining the ordinary course needs of any Subsidiary, the Company may take into account its ordinary course of business cash management practices whereby amounts that would otherwise constitute cash balances of one or more Subsidiaries are managed by being concentrated in a single Subsidiary.

"Original Issue Date" means the date on which the Original Notes are first issued under the Indenture.

"Original Notes" means the Notes issued on the Original Issue Date and any Notes issued in replacement thereof.

"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 Company from a Person during such period:

(a) dividends paid to the Company by the Company's Subsidiaries during such period;

(b) consulting and management fees paid to the Company for such period;

(c) tax sharing payments made to the Company during such period;

(d) interest and other distributions paid during such period with respect to cash and other Temporary Cash Investments other than amounts on deposit to secure contingent exposure under letters of credit issued under the Senior Secured Credit Facilities; and

(e) other cash payments made to the Company by the Company's Subsidiaries other than (i) returns of invested capital; (ii) payments of the principal of Debt of any such Subsidiary to the Company and (iii) payments in an amount equal to the aggregate amount released from debt service reserve accounts upon the issuance of letters of credit for the benefit of the beneficiaries of such accounts;

provided that Net Cash Proceeds from Covered Asset Sales and Covered Capital Markets Transactions received by the Company shall not be included in Parent Operating Cash Flow for any period.

"Person" means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

"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.

"Principal" of a Note means the principal amount of, and, unless the context indicates otherwise, includes any premium payable on, the Note.

"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.

"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 Final Maturity 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 Final Maturity 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 Final Maturity 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 Final Maturity 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 Indenture.

"Registered Note" means any Note registered on the Note Register (as defined in Section 2.05).

"Regular Record Date" for the interest payable on any Interest Payment Date means the fifteenth calendar day preceding such Interest Payment Date.

"Regulation S" means Regulation S under the Securities Act.

"Regulation S Certificate" means a certificate substantially in the form of Exhibit D hereto.

"Reinvestment Rate" means 1.00 (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 date on which the Notes are first redeemable at par. 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.

"Responsible Officer" means, when used with respect to the Trustee, any senior trust officer, any vice president, any trust officer, any assistant trust officer, or any other officer or assistant officer of the Trustee customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of his knowledge of and familiarity with the particular subject.

"Restricted Legend" means the legend set forth in Exhibit B hereto.

"Restricted Period" means the relevant 40 day distribution compliance period as defined in Regulation S.

"Rule 144A" means Rule 144A under the Securities Act.

"Rule 144A Certificate" means a written certification addressed to the Company and the Trustee to the effect that the Person making such certification
(x) is acquiring such Note (or beneficial interest) for its own account or one or more accounts with respect to which it exercises sole investment discretion and that it and each such account is a qualified institutional buyer within the meaning

of Rule 144A, (y) is aware that the transfer to it or exchange, as applicable, is being made in reliance upon the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A and (z) acknowledges that it has received such information regarding the Company as it has requested pursuant to Rule 144A(d)(4) or has determined not to request such information.

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

"Securities Act" means the Securities Act of 1933, as amended.

"Security Agreement Collateral" means the "Collateral" referred to in the Security Agreement.

"Security Agreement" means the security agreement dated December12, 2002 by the Company, the other Persons listed on the signature page thereof and the Additional Grantors (as defined therein), as Grantors, to Wilmington Trust Company, as Corporate Trustee and Bruce L. Bisson, as Individual Trustee, under the Collateral Trust Agreement.

"Senior Secured Credit Facilities" means the Amended and Restated Credit and Reimbursement Agreement dated as of December 12, 2002 between the Company, as Borrower, the Subsidiary Guarantors (as defined therein), as Subsidiary Guarantors, Citicorp USA, Inc., as Administrative Agent and Collateral Agent, Salomon Smith Barney, Inc., as Lead Arranger and Book Runner, Bank of America, N.A., as Lead Arranger and Book Runner and as Syndication Agent, Union Bank of California, N.A., as Lead Arranger and Book Runner and as Syndication Agent, the Banks listed therein, the Revolving Banks (as defined therein) and the Drax LOC Fronting Banks (as defined therein) listed therein and any related notes, guarantees, letters of credit, collateral documents, rate protection or hedging arrangement, instruments and agreements executed in connection therewith, and in each case, as amended, modified, renewed, refunded, replaced or refinanced from time to time, including any agreement (i) extending or shortening the maturity of any indebtedness incurred thereunder or contemplated thereby; (ii) adding or deleting borrowers or guarantors thereunder; or (iii) otherwise altering the terms and conditions thereof.

"Senior Secured Credit Facility Obligations" means all Obligations of the Company and its Subsidiaries outstanding under the Senior Secured Credit Facilities, including, without limitation, interest accruing subsequent to the filing of, or which would have accrued but for the filing of, a petition for bankruptcy, whether or not such interest is an allowable claim in such bankruptcy proceeding.

"Senior Secured Lenders' Exposure" means on any date the sum of (i) the aggregate principal amount of the loans outstanding under the Senior Secured

Credit Facilities, plus (ii) the aggregate amount of unused commitments under the Senior Secured Credit Facilities on such date, which amounts include without limitation the aggregate amount of (x) available amounts and (y) drawn but unpaid amounts, with respect to the letters of credit to be issued under the Senior Secured Credit Facilities.

"Specified Accredited Investors" means Paul T. Hanrahan, an executive officer of the Company, and the Persimmon Trust, a charitable trust established by Roger W. Sant, a director of the Company, each of which has certified that he or it is an accredited investor as defined in Rule 501 under the Securities Act.

"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.

"Subsidiary" means, with respect to any Person, any corporation, association or other business entity of which a majority of the Capital Stock 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.

"Tax Legend" means the legend set forth in Exhibit E hereto.

"Tecons" means Term Convertible Preferred Securities issued by the Company's wholly owned special purpose business trusts.

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

"Trustee" means the party named as such in the first paragraph of this Indenture until a successor replaces it in accordance with the provisions of Article 7 and thereafter means such successor.

"U.S. Global Note" means a Global Note that bears the Restricted Legend representing Notes issued and sold pursuant to Rule 144A.

"U.S. Government Obligations" means securities that are (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (ii) obligations of an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Obligation or a specific payment of interest on or principal of any such U.S. Government Obligation held by such custodian for the account of the holder of a depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of interest on or principal of the U.S. Government Obligation evidenced by such depository receipt.

Term                             Section
----                             -------
Authenticating Agent             2.02
Event of Default                 6.01
Judgment Currency                10.14
Note Register                    2.05
Paying Agent                     2.05
Registrar                        2.05
Required Currency                10.14
special record date              2.14

Section 1.03. Rules of Construction. Unless the context otherwise requires:

(i) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(ii) words in the singular include the plural, and words in the plural include the singular;

(iii) "herein," "hereof" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision;

(iv) all references to Sections or Articles refer to Sections or Articles of this Indenture unless otherwise indicated; and

(v) use of masculine, feminine or neuter pronouns should not be deemed a limitation, and the use of any such pronouns should be construed to include, where appropriate, the other pronouns.

ARTICLE 2
THE NOTES

Section 2.01. Forms Generally, Certain Issues Regarding Preconditions for Transfer and Payment. (a) Each Note and the related Trustee's certificate of authentication will be substantially in the form attached as Exhibit A. The terms and provisions contained in the form of the Notes annexed as Exhibit A constitute, and are hereby expressly made, a part of the Indenture. The Notes may have notations, legends or endorsements required by law, rules of or agreements with national securities exchanges to which the Company is subject, or usage.

(b) Each Note will bear the Tax Legend and except as otherwise provided in paragraph (c) each Note will bear the Restricted Legend.

(c) If the Company determines (upon the advice of counsel and such other certifications and evidence as the Company may reasonably require) that any Note is eligible for resale pursuant to Rule 144(k) under the Securities Act (or a successor provision) and that the Restricted Legend is no longer necessary or appropriate in order to ensure that subsequent transfers of the Note (or a beneficial interest therein) are effected in compliance with the Securities Act, the Company may instruct the Trustee to cancel the Note and issue to the Holder

thereof (or to its transferee) a new Note of like tenor and amount, registered in the name of the Holder thereof (or its transferee), that does not bear the Restricted Legend, and the Trustee will comply with such instruction.

(d) By its acceptance of any Note bearing the Restricted Legend (or any beneficial interest in such a Note), each Holder thereof and each owner of a beneficial interest therein acknowledges the restrictions on transfer of such Note (and any such beneficial interest) set forth in the Indenture and in the Restricted Legend and agrees that it will transfer such Note (and any such beneficial interest) only in accordance with the Indenture and such legend.

Section 2.02. Execution and Authentication. Two Officers shall execute the Notes for the Company by facsimile or manual signature in the name and on behalf of the Company. If an Officer whose signature is on a Note no longer holds that office at the time the Note is authenticated, the Note shall nevertheless be valid.

The Trustee, at the expense of the Company, may appoint an authenticating agent (the "Authenticating Agent") to authenticate Notes. The Authenticating Agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such Authenticating Agent.

A Note shall not be valid until the Trustee or Authenticating Agent manually signs the certificate of authentication on the Note. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture. In authenticating the Notes, the Trustee shall be entitled to receive prior to the first authentication of any Notes and (subject to Article
7) shall be fully protected in relying upon, unless and until such documents have been superseded or revoked:

(a) any Board Resolution by or pursuant to which the form and terms of the Notes were established;

(b) an Officers' Certificate setting forth the form and terms of the Notes, stating that the form and terms of the Notes have been, or will be when established in accordance with such procedures as shall be referred to therein, established in compliance with this Indenture; and

(c) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee.

Section 2.03. Amount Unlimited. The aggregate principal amount of Notes which may be authenticated and delivered under this Indenture is unlimited. The Company may issue Additional Notes under the Indenture from time to time.

Section 2.04. Denomination and Date of Securities; Payment of Interest. The Notes shall be issuable in denominations of $1,000 and any integral multiple thereof. If as a result of the exchange or redemption in part of any Notes issued hereunder any Holder is entitled to receive Notes in an aggregate principal amount that is not an integral multiple of $1,000, the principal amount of such Holder's notes shall be reduced to the nearest $1,000 and such Holder shall receive a substitute cash payment equal to the principal amount by which that Holder's Notes are reduced. The Notes shall be numbered, lettered or otherwise distinguished in such manner or in accordance with such plan as the Officers of the Company executing the same may determine, as evidenced by their execution thereof.

Each Note shall be dated the date of its authentication. The Notes shall bear interest from the date of the Note, and such interest and shall be payable on the Interest Payment Date.

The person in whose name any Note is registered at the close of business on any Regular Record Date with respect to any Interest Payment Date shall be entitled to receive the interest, if any, payable on such Interest Payment Date notwithstanding any transfer or exchange of such Note subsequent to the Regular Record Date and prior to such Interest Payment Date, except if and to the extent the Company shall default in the payment of the interest due on such Interest Payment Date for such series, in which case the provisions of Section 2.14 shall apply.

Section 2.05. Registrar and Paying Agent; Agents Generally. The Company shall maintain an office or agency where Notes may be presented for registration, registration of transfer or for exchange (the "Registrar") and an office or agency where Notes may be presented for payment (the "Paying Agent"), which shall be in the Borough of Manhattan, The City of New York. The Company shall cause the Registrar to keep a register of the Notes and of their registration, transfer and exchange (the "Note Register"). The Company may have one or more additional Paying Agents or transfer agents with respect to the Notes.

The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Company shall give prompt written notice to the Trustee of the name and address of any Agent and any change in the name or address of an Agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such. The Company may remove any Agent upon written notice to such Agent and the Trustee; provided that no such removal shall become effective until (i) the acceptance of an appointment by a successor Agent to such Agent as evidenced by an appropriate agency agreement entered into by the Company and such successor Agent and

delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as such Agent until the appointment of a successor Agent in accordance with clause (i) of this proviso. The Company or any Affiliate of the Company may act as Paying Agent or Registrar; provided that neither the Company nor an Affiliate of the Company shall act as Paying Agent in connection with the defeasance of the Notes or the discharge of this Indenture under Article 8.

The Company initially appoints the Trustee as Registrar, Paying Agent and Authenticating Agent. If, at any time, the Trustee is not the Registrar, the Registrar shall make available to the Trustee ten days prior to each interest payment date and at such other times as the Trustee may reasonably request the names and addresses of the Holders as they appear in the Note Register.

Section 2.06. Paying Agent to Hold Money in Trust. Not later than 10:00
a.m. New York City time on each due date of any Principal or interest on any Notes, the Company shall deposit with the Paying Agent money in immediately available funds sufficient to pay such Principal or interest. The Company shall require each Paying Agent other than the Trustee to agree in writing that such Paying Agent shall hold in trust for the benefit of the Holders of such Notes or the Trustee all money held by the Paying Agent for the payment of Principal of and interest on such Notes and shall promptly notify the Trustee of any default by the Company in making any such payment. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and account for any funds disbursed, and the Trustee may at any time during the continuance of any payment default, upon written request to a Paying Agent, require such Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed. Upon doing so, the Paying Agent shall have no further liability for the money so paid over to the Trustee. If the Company or any Affiliate of the Company acts as Paying Agent, it will, on or before each due date of any Principal of or interest on the Notes, segregate and hold in a separate trust fund for the benefit of the Holders thereof a sum of money sufficient to pay such Principal or interest so becoming due until such sum of money shall be paid to such Holders or otherwise disposed of as provided in this Indenture, and will promptly notify the Trustee in writing of its action or failure to act as required by this Section.

Section 2.07. Restrictions on Transfer and Exchange. (a) The transfer or exchange of any Note (or a beneficial interest therein) may only be made in accordance with this Section, Section 2.08 and in the case of a Global Note (or a beneficial interest therein), the applicable rules and procedures of the Depositary. The Trustee shall refuse to register any requested transfer or exchange that does not comply with the preceding sentence.

(b) The transfer or exchange of any Note (or a beneficial interest therein) that bears the Restricted Legend may only be made in compliance with the provisions of the Restricted Legend.

(c) The transfer or exchange of a beneficial interest in an Offshore Global Note or a Certificated Note for a beneficial interest in a U.S. Global Note may only be made upon receipt by the Trustee of a duly completed Rule 144A Certificate.

(d) The transfer or exchange of a beneficial interest in a U.S. Global Note or a Certificated Note for a beneficial interest in an Offshore Global Note may only be made upon receipt by the Trustee of a duly completed Regulation S Certificate.

(e) During the Restricted Period, beneficial interests in an Offshore Global Note may be held through the Depositary only through Euroclear and Clearstream, and their respective direct and indirect participants.

(f) The Trustee will retain copies of all certificates, opinions and other documents received in connection with the transfer or exchange of a Note (or a beneficial interest therein), and the Company will have the right to inspect and make copies thereof at any reasonable time upon written notice to the Trustee.

Section 2.08. Registration, Transfer and Exchange. (a) Registered Global Form Only. The Notes will be issued in registered form only, without coupons, and the Company shall cause the Trustee to maintain a register (the "Register") of the Notes, for registering the record ownership of the Notes by the Holders and transfers and exchanges of the Notes. The Notes will be issued in global form only except for Notes to be issued (i) under the circumstances described in clause (b)(iv) of this Section and (ii) the Notes to be issued to the Specified Accredited Investors, which shall be issued as Certificated Notes.

(b) Global Notes. (i) Each Global Note will be registered in the name of the Depositary or its nominee and, so long as DTC is serving as the Depositary thereof, will bear the DTC Legend.

(ii) Each Global Note will be delivered to the Trustee as custodian for the Depositary. Transfers of a Global Note (but not a beneficial interest therein) will be limited to transfers thereof in whole, but not in part, to the Depositary, its successors or their respective nominees, except (A) as set forth in paragraph (b)(iv) of this Section and (B) transfers of portions thereof in the form of Certificated Notes may be made upon request of an Agent Member (for itself or on behalf of a beneficial owner) by written notice given to the Trustee by or on behalf of

the Depositary in accordance with customary procedures of the Depositary and in the compliance with this Section and Section 2.06.

(iii) Agent Members will have no rights under the Indenture with respect to any Global Note held on their behalf by the Depositary, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and Holder of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, the Depositary or its nominee may grant proxies and otherwise authorize any person (including any Agent Member and any Person that holds a beneficial interest in a Global Note through an Agent Member) to take any action which a Holder is entitled to take under the Indenture or the Notes, and nothing herein will impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a holder of any security.

(iv) If (x) the Depositary (1) notifies the Company that it is unwilling or unable to continue as Depositary for a Global Note and a successor depositary is not appointed by the Company within 90 days of the notice or (2) has ceased to be a clearing agency registered under the Exchange Act, (y) an Event of Default has occurred and is continuing and the Trustee has received a request from the Depositary, or (z) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of Certificated Notes, the Trustee will promptly exchange each beneficial interest in the Global Note for one or more Certificated Notes in authorized denominations having an equal aggregate principal amount registered in the name of the owner of such beneficial interest, as identified to the Trustee by the Depositary, and thereupon the Global Note will be deemed canceled. Each Certificated Note issued in exchange therefor will bear the Restricted Legend.

(c) Certificated Notes. Each Certificated Note will be registered in the name of the Holder thereof.

(d) Transfers and Exchanges Generally. A Holder may transfer a Note (or a beneficial interest therein) to another Person or exchange a Note (or a beneficial interest therein) for another Note or Notes of any authorized denomination by presenting to the Trustee a written request therefor stating the name of the proposed transferee or requesting such an exchange, accompanied by any certification, opinion or other document required by Section 2.07. The Trustee will promptly register any such transfer or exchange that meets the requirements of this Section by noting the same in the register maintained by the Trustee for the purpose; provided that (x) no transfer or exchange will be effective until the transfer or exchange is registered in such register and (y) the Trustee will not be required (i) to issue, register the transfer of or exchange any Note for a

period of 15 days before a selection of Notes to be redeemed, (ii) to register the transfer of or exchange any Note so selected for redemption in whole or in part, except, in the case of a partial redemption, that portion of any such Note not being redeemed, or (iii) if a redemption is to occur after a Regular Record Date but on or before the corresponding Interest Payment Date, to register the transfer of or exchange any Note on or after such Regular Record Date and before the date of redemption. Prior to the registration of any transfer, the Company, the Trustee and their agents will treat the person in whose name the Note is registered as the owner and Holder thereof for all purposes (whether or not the Note is overdue), and will not be affected by notice to the contrary.

From time to time the Company will execute and the Trustee will authenticate replacement or substitute Notes as necessary in order to permit the registration of a transfer or exchange in accordance with this Section.

No service charge will be imposed in connection with any transfer or exchange of any Note, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer tax or other similar governmental charge payable upon exchange pursuant to paragraph (b)(iv) of this Section).

(e) Procedures to Be Followed by the Trustee. (i) Global Note to Global Note. If a beneficial interest in a Global Note is transferred or exchanged for a beneficial interest in another Global Note, the Trustee will (x) record a decrease in the principal amount of the Global Note being transferred or exchanged equal to the principal amount of such transfer or exchange and (y) record a like increase in the principal amount of the other Global Note. Any beneficial interest in one Global Note that is transferred to a Person who takes delivery in the form of an interest in another Global Note, or exchanged for an interest in another Global Note, will, upon transfer or exchange, cease to be an interest in such Global Note and become an interest in the other Global Note and, accordingly, will thereafter be subject to all transfer and exchange restrictions, if any, and other procedures applicable to beneficial interests in such other Global Note for as long as it remains such an interest.

(ii) Certificated Note to Global Note. If a Certificated Note is transferred or exchanged for a beneficial interest in a Global Note, the Trustee will (x) cancel such Certificated Note, (y) record an increase in the principal amount of such Global Note equal to the principal amount of such transfer or exchange and (z) in the event that such transfer or exchange involves less than the entire principal amount of the canceled Certificated Note, deliver to the Holder thereof one or more new Certificated Notes in authorized denominations having an aggregate principal amount equal to the untransferred or unexchanged portion of the canceled Certificated Note, registered in the name of the Holder thereof.

(iii) Certificated Note to Certificated Note. If a Certificated Note is transferred or exchanged for another Certificated Note, the Trustee will (x) cancel the Certificated Note being transferred or exchanged, (y) deliver one or more new Certificated Notes in authorized denominations having an aggregate principal amount equal to the principal amount of such transfer or exchange to the transferee (in the case of a transfer) or the Holder of the canceled Certificated Note (in the case of an exchange), registered in the name of such transferee or Holder, as applicable, and
(z) if such transfer or exchange involves less than the entire principal amount of the canceled Certificated Note, will deliver to the Holder thereof one or more new Certificated Notes in authorized denominations having an aggregate principal amount equal to the untransferred or unexchanged portion of the canceled Certificated Note, registered in the name of the Holder thereof.

Section 2.09. Replacement Notes. If a defaced or mutilated Note is surrendered to the Trustee or if a Holder claims that its Note has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Note of such tenor and principal amount bearing a number not contemporaneously outstanding. If required by the Trustee or the Company, an indemnity bond must be furnished that is sufficient in the judgment of both the Trustee and the Company to protect the Company, the Trustee and any Agent from any loss that any of them may suffer if a Note is replaced. The Company may charge such Holder for its expenses and the expenses of the Trustee (including without limitation attorneys' fees and expenses) in replacing a Note. In case any such mutilated, defaced, lost, destroyed or wrongfully taken Note has become or is about to become due and payable, the Company in its discretion may pay such Note instead of issuing a new Note in replacement thereof.

Every replacement Note is an additional obligation of the Company and shall be entitled to the benefits of this Indenture.

To the extent permitted by law, the foregoing provisions of this Section are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or wrongfully taken Notes.

Section 2.10. Outstanding Notes. Notes outstanding at any time are all Notes that have been authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation and those described in this Section as not outstanding.

If a Note is replaced pursuant to Section 2.09, it ceases to be outstanding unless and until the Trustee and the Company receive proof satisfactory to them that the replaced Note is held by a holder in due course.

If the Paying Agent (other than the Company or an Affiliate of the Company) holds on the maturity date or any redemption date or date for repurchase of the Notes money sufficient to pay Notes payable or to be redeemed or repurchased on that date, then on and after that date such Notes cease to be outstanding and interest on them shall cease to accrue.

A Note does not cease to be outstanding because the Company or one of its Affiliates holds such Note, provided, however, that, in determining whether the Holders of the requisite principal amount of the outstanding Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Notes owned by the Company or any Affiliate of the Company shall be disregarded and deemed not to be outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes as to which a Responsible Officer of the Trustee has received written notice to be so owned shall be so disregarded. Any Notes so owned which are pledged by the Company, or by any Affiliate of the Company, as security for loans or other obligations, otherwise than to another such Affiliate of the Company, shall be deemed to be outstanding, if the pledgee is entitled pursuant to the terms of its pledge agreement and is free to exercise in its or his discretion the right to vote such Notes, uncontrolled by the Company or by any such Affiliate.

Section 2.11. Temporary Notes. Until definitive Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of definitive Notes but may have insertions, substitutions, omissions and other variations determined to be appropriate by the Officers executing the temporary Notes, as evidenced by their execution of such temporary Notes. If temporary Notes are issued, the Company will cause definitive Notes to be prepared without unreasonable delay. After the preparation of definitive Notes, the temporary Notes shall be exchangeable for definitive Notes of such tenor upon surrender of such temporary Notes at the office or agency of the Company designated for such purpose pursuant to Section 4.02, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Notes the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Notes of such tenor and authorized denominations. Until so exchanged, the temporary Notes shall be entitled to the same benefits under this Indenture as definitive Notes.

Section 2.12. Cancellation. The Company at any time may deliver to the Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee for cancellation any Notes previously authenticated hereunder which the Company has not issued and sold. The Registrar, any transfer agent and the Paying Agent shall forward to the Trustee any Notes

surrendered to them for transfer, exchange or payment. The Trustee shall retain, cancel and destroy all Notes surrendered for transfer, exchange, payment or cancellation and shall deliver a certificate of destruction to the Company. The Company may not issue new Notes to replace Notes it has paid in full or delivered to the Trustee for cancellation.

Section 2.13. CUSIP Numbers. The Company in issuing the Notes may use "CUSIP" and "CINS" numbers, and the Trustee shall use CUSIP numbers or CINS numbers, as the case may be, in notices of redemption or exchange as a convenience to Holders and no representation shall be made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption or exchange.

Section 2.14. Defaulted Interest. If the Company defaults in a payment of interest on the Notes, it shall pay, or shall deposit with the Paying Agent money in immediately available funds sufficient to pay, the defaulted interest plus (to the extent lawful) any interest payable on the defaulted interest to the Persons who are Holders on a subsequent special record date, which shall mean the 15th day next preceding the date fixed by the Company for the payment of defaulted interest, whether or not such day is a Business Day. At least 15 days before such special record date, the Company shall mail to each Holder and to the Trustee a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.

ARTICLE 3
REDEMPTION

Section 3.01. Optional Redemption. At any time and from time to time, the Company may redeem the Notes in whole or in part at a redemption price equal to
(a) the sum of (i) 100% of the Principal amount thereof plus accrued and unpaid interest to the redemption date plus (ii) a Make-Whole Amount, if any, if redeemed on or prior to December 15, 2004; or (b) 100% of the Principal amount thereof plus accrued and unpaid interest to the redemption date, if redeemed after December 15, 2004; provided that if the date fixed for redemption is June 15 or December 15, then the interest payable on such date shall be paid to the holder of record on the next preceding June 15 or December 15.

Section 3.02. Mandatory Redemption Upon Receipt of Net Cash Proceeds from Certain Transactions. (a) Within 90 days of the Company's receipt of any Excess Asset Sale Proceeds, the Company will use such Excess Asset Sale Proceeds to redeem the Notes at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest to the date of the redemption; provided that the Company shall not be obligated to redeem any Notes pursuant to this Section 3.02(a) unless the Excess Asset Sale Proceeds exceeds $10 million

and upon completion of any redemption pursuant to this Section 3.02(a), the Excess Asset Sale Proceeds under this Indenture will be reset to zero.

(b) Within 90 days after the end of each fiscal year, so long as the Minimum Liquidity Level on the last day of such fiscal year is greater than $400 million, the Company will redeem, at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest to the date of the redemption, an aggregate principal amount of outstanding Notes equal to the lesser of the Noteholders' Ratable Share of (A) 75% of Adjusted Free Cash Flow for such fiscal year and (B) the maximum amount of Adjusted Free Cash Flow for such fiscal year so that the Minimum Liquidity Level on the last day of such fiscal year after giving effect to any mandatory redemption required to be made pursuant to this Section 3.02(b) and any prepayment made to the lenders under the Senior Secured Credit Facilities with a portion of the Company's Adjusted Free Cash Flow would not be less than $400 million; provided that the Company shall not be obligated to redeem the Notes pursuant to this Section 3.02(b) unless the Adjusted Free Cash Flow for such fiscal year (together with any carryover amount described in the next sentence) exceeds $10 million. To the extent that the Company is not required to redeem any Notes as a result of the immediately preceding proviso, such amount of Notes that otherwise would have been redeemed shall be carried forward and on the next date on which the Company is required to redeem any Notes pursuant to this Section 3.02(b), the amount of Notes required to be redeemed by the Company shall be increased by such amount.

(c) Within 90 days after the Company's receipt of any Net Cash Proceeds of a Covered Capital Markets Transaction, the Company will use 50% of such Net Cash Proceeds to redeem the Notes at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest to the date of the redemption; provided that the Company shall not be required to redeem the Notes as set forth in this Section 3.02(c) (i) unless on the date that the Covered Capital Markets Transaction is consummated, the amount outstanding under the Senior Secured Credit Facilities is zero and all commitments to extend credit thereunder have been terminated and (ii) unless the Net Cash Proceeds from all Covered Capital Markets Transactions subject to this Section 3.02(c) exceed $10 million. Upon completion of any redemption of the Notes pursuant to this
Section 3.02(c), the Net Cash Proceeds from Covered Capital Markets Transactions under this Indenture will be reset to zero.

Section 3.03. Additional Mandatory Redemption. On November 25, 2004, the Company shall redeem, at a price equal to 100% of the principal amount of such Notes to be redeemed plus accrued and unpaid interest to the redemption date, Notes with an aggregate principal amount equal to (i) 40% of the aggregate principal amount of the Notes issued on the Original Issue Date less (ii) the

aggregate principal amount of Notes redeemed on or prior to November 25, 2004 pursuant to Sections 3.01 and 3.02 of this Indenture.

Section 3.04. Notice of Redemption; Partial Redemptions. Notice of redemption to the Holders of the Notes to be redeemed as a whole or in part shall be given by mailing notice of such redemption by first class mail, postage prepaid, at least 30 days and not more than 60 days prior to the date fixed for redemption to such Holders of the Notes at their last addresses as they shall appear upon the Note Register. Any notice which is mailed or published in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the Holder receives the notice. Failure to give notice by mail, or any defect in the notice to the Holder of any Note designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Note.

The notice of redemption to each such Holder shall specify the principal amount of each Note held by such Holder to be redeemed, the CUSIP numbers of the Notes to be redeemed, the date fixed for redemption, the redemption price, the place or places of payment, that payment will be made upon presentation and surrender of such Notes, that interest accrued to the date fixed for redemption will be paid as specified in such notice and that on and after said date interest thereon or on the portions thereof to be redeemed will cease to accrue. In case any Note is to be redeemed in part only, the notice of redemption shall state the portion of the principal amount thereof to be redeemed and shall state that on and after the date fixed for redemption, upon surrender of such Note, a new Note or Notes and tenor in principal amount equal to the unredeemed portion thereof will be issued.

The notice of redemption of Notes to be redeemed at the option of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company.

On or before 10:00 a.m. New York City time on the redemption date specified in the notice of redemption given as provided in this Section, the Company will deposit with the Trustee or with one or more Paying Agents (or, if the Company is acting as its own Paying Agent, set aside, segregate and hold in trust as provided in Section 2.06) an amount of money sufficient to redeem on the redemption date all the Notes so called for redemption at the appropriate redemption price, together with accrued interest to the date fixed for redemption. If all of the outstanding Notes are to be redeemed, the Company will deliver to the Trustee at least 10 days prior to the last date on which notice of redemption may be given to Holders pursuant to the first paragraph of this Section 3.04 (or such shorter period as shall be acceptable to the Trustee) an Officers' Certificate stating that all such Notes are to be redeemed. If less than all the outstanding Notes are to be redeemed, the Company will deliver to the Trustee at least 15 days prior to the last date on which notice of redemption may be given to Holders pursuant to

the first paragraph of this Section 3.04 (or such shorter period as shall be acceptable to the Trustee) an Officers' Certificate stating the aggregate principal amount of such Notes to be redeemed. In case of a redemption at the election of the Company prior to the expiration of any restriction on such redemption, the Company shall deliver to the Trustee, prior to the giving of any notice of redemption to Holders pursuant to this Section, an Officers' Certificate stating that such redemption is not prohibited by such restriction.

If less than all the Notes are to be redeemed, the Trustee shall select, pro rata, by lot or in such manner as it shall deem appropriate and fair, Notes to be redeemed in whole or in part. Notes may be redeemed in part in multiples equal to the minimum authorized denomination for Notes or any multiple thereof. The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Notes selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Notes shall relate, in the case of any Note redeemed or to be redeemed only in part, to the portion of the principal amount of such Note which has been or is to be redeemed.

Section 3.05. Payment of Notes Called for Redemption. If notice of redemption has been given as above provided, the Notes or portions of Notes specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest accrued to the date fixed for redemption, and on and after such date (unless the Company shall default in the payment of such Notes at the redemption price, together with interest accrued to such date) interest on the Notes or portions of Notes so called for redemption shall cease to accrue, and, except as provided in Section 7.09 and Section 8.02, such Notes shall cease from and after the date fixed for redemption to be entitled to any benefit under this Indenture, and the Holders thereof shall have no right in respect of such Notes except the right to receive the redemption price thereof and unpaid interest to the date fixed for redemption. On presentation and surrender of such Notes at a place of payment specified in said notice, said Notes or the specified portions thereof shall be paid and redeemed by the Company at the applicable redemption price, together with interest accrued thereon to the date fixed for redemption; provided that payment of interest becoming due on or prior to the date fixed for redemption, shall be payable to the Holders of such Notes registered as such on the relevant record date subject to the terms and provisions of Section 2.01 and Section 2.14 hereof.

If any Note called for redemption shall not be so paid upon surrender thereof for redemption, the principal shall, until paid or duly provided for, bear interest from the date fixed for redemption at the rate of interest or Yield to Maturity (in the case of an Original Issue Discount Note) borne by such Note.

Upon presentation of any Note redeemed in part only, the Company shall execute and the Trustee shall authenticate and deliver to or on the order of the Holder thereof, at the expense of the Company, a new Note or Notes of such tenor, of authorized denominations, in principal amount equal to the unredeemed portion of the Note so presented.

Section 3.06. Exclusion of Certain Notes from Eligibility for Selection for Redemption. Notes shall be excluded from eligibility for selection for redemption if they are identified by registration and certificate number in a written statement signed by an authorized officer of the Company and delivered to the Trustee at least 40 days prior to the last date on which notice of redemption may be given as being owned of record and beneficially by, and not pledged or hypothecated by, either (a) the Company or (b) an entity specifically identified in such written statement as directly or indirectly controlling or controlled by or under direct or indirect common control with the Company.

ARTICLE 4
COVENANTS

Section 4.01. Payment of Notes. The Company shall pay the Principal of and interest on the Notes on the dates and in the manner provided in the Notes and this Indenture. The interest on the Notes shall be payable only to the Holders thereof and at the option of the Company may be paid by mailing checks for such interest payable to or upon the written order of such Holders at their last addresses as they appear on the Note Register of the Company.

Notwithstanding any provisions of this Indenture and the Notes to the contrary, if the Company and a Holder of any Note so agree, payments of interest on, and any portion of the Principal of, such Holder's Note (other than interest payable at maturity or on any redemption or repayment date or the final payment of Principal on such Note) shall be made by the Paying Agent, upon receipt from the Company of immediately available funds by 11:00 A.M., New York City time (or such other time as may be agreed to between the Company and the Paying Agent), directly to the Holder of such Note (by Federal funds wire transfer or otherwise) if the Holder has delivered written instructions to the Trustee 15 days prior to such payment date requesting that such payment will be so made and designating the bank account to which such payments shall be so made and in the case of payments of Principal, surrenders the same to the Trustee in exchange for a Note or Notes aggregating the same principal amount as the unredeemed principal amount of the Notes surrendered. The Trustee shall be entitled to rely on the last instruction delivered by the Holder pursuant to this Section 4.01 unless a new instruction is delivered 15 days prior to a payment date. The Company will indemnify and hold each of the Trustee and any Paying Agent harmless against any loss, liability or expense (including attorneys' fees) resulting from any act or

omission to act on the part of the Company or any such Holder in connection with any such agreement or from making any payment in accordance with any such agreement.

The Company shall pay interest on overdue Principal, and interest on overdue installments of interest, to the extent lawful, at the rate per annum specified in the Notes.

Section 4.02. Maintenance of Office or Agency. The Company will maintain in the Borough of Manhattan, The City of New York, an office or agency where Notes may be surrendered for registration of transfer or exchange or for presentation for payment and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company hereby initially designates the Corporate Trust Office of the Trustee's Agent, located in the Borough of Manhattan, The City of New York, as such office or agency of the Company. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the address of the Trustee set forth in Section 10.01.

The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

Section 4.03. Noteholders' Lists. The Company will furnish or cause to be furnished to the Trustee a list in such form as the Trustee may reasonably require of the names and addresses of the holders of the Notes (a) semi-annually not more than 15 days after each Regular Record Date, as hereinabove specified, as of such record date and (b) at such other times as the Trustee may request in writing, within thirty days after receipt by the Company of any such request as of a date not more than 15 days prior to the time such information is furnished.

Section 4.04. Certificate to Trustee. The Company will furnish to the Trustee annually, on or before a date not more than four months after the end of its fiscal year (which, on the date hereof, is a calendar year), a brief certificate (which need not contain the statements required by Section 10.03) from its principal executive, financial or accounting officers to his or her knowledge of the compliance of the Company with all conditions and covenants under this

Indenture (such compliance to be determined without regard to any period of grace or requirement of notice provided under this Indenture).

Section 4.05. Reports by the Company. (a) The Company covenants to file with the Trustee, within 15 days after the Company has filed the same with the Commission, copies of the annual reports and of the information, documents, and other reports which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act.

(b) The Company covenants to provide the Trustee, within 50 days of the effective date of the amendment or waiver, a copy of any amendment or waiver under the Senior Secured Credit Facilities that amends or waives the definitions of "Covered Asset Sale", "Creditors' Portion" or Adjusted Free Cash Flow" set forth therein.

Section 4.06. Limitation on Liens. (a) 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, the Company shall secure the 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. This restriction will not apply to, and there shall be excluded in computing secured indebtedness for the purpose of such restriction, indebtedness secured by (i) property of any Subsidiary, (ii) liens on property of, or on any shares of stock or Debt of, any corporation existing at the time such corporation becomes a Subsidiary, (iii) liens in favor of the Company or any Subsidiary, (iv) liens in favor of U.S. or foreign governmental bodies to secure partial, progress, advance or other payments, (v) 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, (vi) liens existing on the first date on which any Notes are authenticated by the Trustee, (vii) liens under one or more credit facilities for indebtedness in an aggregate principal amount not to exceed $900 million at any time outstanding, (viii) liens incurred in connection with pollution control, industrial revenue or similar financings, and (ix) any extension, renewal or replacement of any Debt secured by any liens referred to in the foregoing clauses (i) through (viii), inclusive.

(b) Without the consent of holders of a majority in principal amount of the Notes outstanding, the Company shall not pledge the Collateral as security for any indebtedness, other than (i) all Debt outstanding under the Senior Secured

Credit Facilities pursuant to the Collateral Documents as amended from time to time (except that the amount of such Debt may not exceed the original loans and commitments secured thereunder less permanent repayments and commitment reductions and any prepayment or repayments of obligations may not be reborrowed and the commitments shall be reduced accordingly), (ii) up to $225 million aggregate principal amount (or accreted value, if applicable) of other senior secured Debt, (iii) obligations under interest rate and foreign currency hedging agreements, and cash management services arrangements provided to the Company by lenders under the Senior Secured Credit Facilities, (iv) obligations under the Banc of America Securities Option Agreement, (v) obligations under the Notes, in aggregate principal amount not to exceed $305 million, (vi) such other obligations as are permitted to be so secured by the Senior Secured Credit Facilities, (vii) up to $60 million of other corporate obligations that by their terms are entitled to be secured on a pari passu basis, and (viii) obligations the proceeds of which are used to refinance any of the foregoing; provided that for purposes of determining compliance with this Section 4.06(b), in the event that an obligation meets the criteria of more than one of the categories described in clauses (i) through (viii) above, the Company shall, in its sole discretion, classify such item of indebtedness in any manner that complies with this covenant and such obligation will be treated as having been incurred pursuant only to one of such clauses. In addition, the Company may, at any time, change the classification of an obligation (or any portion thereof) to any other clause provided that the Company would be permitted to incur such obligation (or such portion thereof) pursuant to such other clause at such time of reclassification.

Section 4.07. Equal and Ratable Liens. (a) To the extent the Company or any Subsidiary of the Company grants a Lien upon any of its property or assets to secure the Senior Secured Credit Facilities, the Company or such Subsidiary, as the case may be, shall, contemporaneously with the granting of such Lien, secure the Company's Obligations under the Indenture equally and ratably with the Senior Secured Credit Facility Obligations secured by such Lien.

(b) Notwithstanding the foregoing, from and after the date when all Liens granted in favor of the holders of the Senior Secured Credit Facility Obligations are released (and are not concurrently replaced with any new Liens on any asset of the Company or any of its Subsidiaries securing Senior Secured Credit Facility Obligations), the provisions of this Section will no longer apply. The provisions of Section 4.06 will, however, continue to apply.

Section 4.08. Restriction on Subsidiary Guarantees. (a) If any of the Company's Subsidiaries shall Guarantee any indebtedness under the Senior Secured Credit Facilities, then such Subsidiary shall, contemporaneously with the granting of such Guarantee, Guarantee the Company's Obligations under the Indenture equally and ratably with (or prior to) the Senior Secured Credit Facilities so Guaranteed, so long as the Senior Secured Credit Facilities shall be

so Guaranteed; provided that this restriction shall not apply to any Guarantees of the Senior Secured Credit Facilities existing on the Original Issue Date.

(b) Notwithstanding the foregoing, from and after the date when all Guarantees granted in favor of the holders of the Senior Secured Credit Facility Obligations pursuant to clause (a) of this Section 4.08 are released (and are not concurrently replaced with any new Guarantees), the provisions of this Section will no longer apply.

Section 4.09. Limitation on Sale Leaseback Transactions. The Company will 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 4.06 hereof in an amount equal to the Attributable Debt with respect to the sale and leaseback transaction without equally and ratably securing the 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; 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 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 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.

Section 4.10. Transfer of Certain Net Cash Proceeds Received by Subsidiaries. The Company will cause its Subsidiaries to transfer to it, by way of dividend, reduction of capital, or repayment of intercompany loans, the Creditors' Portion of the Net Cash Proceeds of any Covered Asset Sale and the Creditors' Portion of the Net Cash Proceeds from any Covered Capital Markets Transactions within 60 days of such Subsidiary's receipt thereof, but only to the extent that, after giving effect to such Covered Asset Sale or Covered Capital Markets Transaction, the cash balances of such Subsidiary exceed its Ordinary Course Cash Needs, and such transfer shall not be required to be made if (1) it cannot be made in a tax efficient manner or (2) such transfer would violate any applicable contracts or would violate applicable law or if applicable law would require minority shareholder approval, a valuation or a discretionary order or would, in the Company'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 4.10 and making loans, Investments and other advances to Subsidiaries, the Company may cause Net Cash Proceeds to be transferred among Subsidiaries, rather than transferred to the Company, in lieu of loans, Investments or other advances the Company would otherwise be permitted to make and would make. Notwithstanding the foregoing, (a) in the case of any Net Cash Proceeds that would otherwise be required to be transferred to the Company pursuant to this covenant, the Company need not make such transfer if the Company nonetheless makes the related mandatory redemption of the Notes that would otherwise be required pursuant to Section 3.02 using funds not otherwise required to be used for the mandatory redemption of the Notes and (b) if the Net Cash Proceeds of any Covered Asset Sale or Covered Capital Markets Transaction received by a Subsidiary are less than $10 million, the Company shall not be required to cause such Net Cash Proceeds effectively to be transferred directly or indirectly to it and applied to redeem the Notes until the aggregate Net Cash Proceeds not so applied equals or exceeds $10 million.

ARTICLE 5
SUCCESSOR CORPORATION

Section 5.01. When Company May Merge, Etc. The Company shall not consolidate with, merge with or into, or sell, convey, transfer, lease or otherwise dispose of all or substantially all of its property and assets (as an entirety or substantially as an entirety in one transaction or a series of related transactions) to, any Person (other than a consolidation with or merger with or into a Subsidiary or a sale, conveyance, transfer, lease or other disposition to a Subsidiary) or permit any Person to merge with or into the Company unless either (x) the Company shall be the continuing Person or (y) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or to which properties and assets of the Company shall be a solvent corporation organized and validly existing under the laws of the United States of America or any state thereof or the District of Columbia and shall expressly assume, by a supplemental indenture, executed and delivered to the Trustee, all of the obligations of the Company on all of the Notes issued under this Indenture and the Company shall have delivered to the Trustee (a) an Opinion of Counsel stating that such consolidation, merger or transfer and such supplemental indenture complies with this provision and that all conditions precedent provided for herein relating to such transaction have been complied with and that such supplemental indenture constitutes the legal, valid and binding obligation of the Company or such successor enforceable against such entity in accordance with its terms, subject to customary exceptions and (b) an Officers' Certificate to the effect that immediately after giving effect to such transaction, no Event of Default or Default shall have occurred and be continuing.

Section 5.02. Successor Substituted. Upon any consolidation or merger, or any sale, conveyance, transfer, lease or other disposition of all or substantially all of the property and assets of the Company in accordance with
Section 5.01 of this Indenture, the successor Person formed by such consolidation or into which the Company is merged or to which such sale, conveyance, transfer, lease or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein.

ARTICLE 6
DEFAULT AND REMEDIES

Section 6.01. Events of Default. An "Event of Default" shall occur with respect to the Notes if:

(a) the Company defaults in the payment of the Principal of the Notes when the same becomes due and payable at maturity, upon acceleration, redemption or mandatory repurchase, or otherwise;

(b) the Company defaults in the payment of interest on the Notes when the same becomes due and payable, and such default continues for a period of 30 days;

(c) the Company defaults in the performance of or breaches any other covenant or agreement of the Company in this Indenture with respect to the Notes or in the Notes and such default or breach continues for a period of 60 consecutive days after written notice to the Company by the Trustee or to the Company and the Trustee by the Holders of 25% or more in aggregate principal amount of the Notes affected thereby;

(d) an event of default, as defined in any indenture or instrument evidencing or under which the Company has at the date of the Indenture or shall thereafter have outstanding any indebtedness, shall happen and be continuing and, in the case of indebtedness other than indebtedness under the Senior Secured Credit Facilities, either (i) 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 (ii) 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 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 by the Holders of not less than 25% in the aggregate principal amount of the 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 under the Indenture by reason thereof shall be deemed likewise to have been remedied, cured or waived without further action on the part of the Trustee, any Holder or any other person;

(e) any of the Collateral Documents ceases to be in full force and effect, or any of the Collateral Documents ceases to give the Holders any of the liens purported to be created thereby, or any of the Collateral Documents is declared null and void or the Company denies in writing that it has any further liability under any Collateral Document or gives written notice to such effect (in each case other than in accordance with the terms of the Indenture or the terms of the Collateral Documents); provided that if a failure of the sort described in this clause (e) is susceptible of cure, no Event of Default shall arise under this clause (e) with respect thereto until 30 days after notice of such failure shall have been given to the Company by the Trustee or Holders of at least 25% in principal amount of the then outstanding Notes;

(f) a court having jurisdiction in the premises shall enter a decree or order for (i) relief in respect of the Company or any of its Material Subsidiaries in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, (ii) appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, or similar official of the Company or any of its Material Subsidiaries or for all or substantially all of the property and assets of the Company or any of its Material Subsidiaries or (iii) the winding up or liquidation of the affairs of the Company or any of its Material Subsidiaries, and, in each case, such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or

(g) the Company or any of its Material Subsidiaries (i) commences a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law, (ii) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Company or any of its Material Subsidiaries or for all or substantially all of the property and assets of the Company or any of its Material Subsidiaries or (iii) effects any general assignment for the benefit of creditors.

Section 6.02. Acceleration. (a) If an Event of Default (other than as described in clauses (f) or (g) of Section 6.01 with respect to the Company) with respect to the Notes then outstanding occurs and is continuing, then, and in each

and every such case, either the Trustee or the Holders of not less than 25% in aggregate principal amount of the Notes then outstanding hereunder by notice in writing to the Company (and to the Trustee if given by Noteholders), may, and the Trustee at the request of such Holders shall, declare the entire Principal of all Notes, and the interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable; provided that if an Event of Default has occurred and is continuing as a result of a default described in clause (d) of Section 6.01 arising under the Senior Secured Credit Facilities (other than a payment default or a default as a result of which the maturity of the Senior Secured Credit Facility shall have been accelerated so that it shall be or become due and payable prior to the date on which the same would otherwise have become due and payable), such acceleration may not occur until 20 Business Days after the occurrence of such default unless such default under the Senior Secured Credit Facility results from a bankruptcy or insolvency related event involving a Subsidiary of the Company or the acceleration of other indebtedness arising from such bankruptcy or insolvency related event, in which case such acceleration may not occur until 60 days after the occurrence of such default.

(b) If an Event of Default described in clause (f) or (g) of Section 6.01 occurs and is continuing with respect to the Company, then the Principal of all the Notes then outstanding and interest accrued thereon, if any, shall ipso facto be and become immediately due and payable, without any declaration or other action by any Holder or the Trustee.

The foregoing provisions, however, are subject to the condition that if, at any time after the Principal of the Notes shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the Company shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all the Notes and the Principal of any and all Notes which shall have become due otherwise than by acceleration (with interest upon such principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest, at the same rate as the rate of interest specified in the Notes to the date of such payment or deposit) and such amount as shall be sufficient to cover all amounts owing the Trustee under Section 7.06, and if any and all Events of Default under the Indenture, other than the non-payment of the principal of Notes which shall have become due by acceleration, shall have been cured, waived or otherwise remedied as provided herein, then and in every such case the Holders of a majority in aggregate Principal amount of all the then outstanding Notes that have been accelerated, by written notice to the Company and to the Trustee, may waive all defaults with respect to the Notes and rescind and annul such declaration and its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impair any right consequent thereon.

Section 6.03. Other Remedies. If a payment default or an Event of Default with respect to the Notes occurs and is continuing, the Trustee may pursue, in its own name or as trustee of an express trust, any available remedy by proceeding at law or in equity to collect the payment of Principal of and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding.

Section 6.04. Waiver of Past Defaults. Subject to Section 6.02, Section 6.07 and Section 9.02, the Holders of at least a majority in Principal amount of the outstanding Notes affected, by notice to the Trustee, may waive an existing Default or Event of Default with respect to the Notes and its consequences, except a Default in the payment of Principal of or interest on any Note as specified in clauses (a) or (b) of Section 6.01 or in respect of a covenant or provision of this Indenture which cannot be modified or amended without the consent of the Holder of each outstanding Note affected. Upon any such waiver, such Default shall cease to exist, and any Event of Default with respect to the Notes arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.

Section 6.05. Control by Majority. Subject to Section 7.01 and Section 7.02(e), the Holders of at least a majority in aggregate Principal amount of the outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to the Notes by this Indenture; provided, that the Trustee may refuse to follow any direction that conflicts with law or this Indenture, that may involve the Trustee in personal liability or that the Trustee determines in good faith may be unduly prejudicial to the rights of Holders not joining in the giving of such direction; and provided further, that the Trustee may take any other action it deems proper that is not inconsistent with any directions received from Holders of Notes pursuant to this Section 6.05.

Section 6.06. Limitation on Suits. No Holder of any Note may institute any proceeding, judicial or otherwise, with respect to this Indenture or the Notes, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

(i) such Holder has previously given to the Trustee written notice of a continuing Event of Default with respect to the Notes;

(ii) the Holders of at least 25% in aggregate Principal amount of outstanding Notes shall have made written request to the Trustee to pursue the remedy;

(iii) such Holder or Holders have offered and, if requested, provided to the Trustee indemnity reasonably satisfactory to the Trustee against any costs, liabilities or expenses to be incurred in compliance with such request;

(iv) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

(v) during such 60-day period, the Holders of a majority in aggregate Principal amount of the outstanding Notes have not given the Trustee a direction that is inconsistent with such written request.

A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over such other Holder.

Section 6.07. Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of Principal of or interest, if any, on such Holder's Note on or after the respective due dates expressed on such Note, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

Section 6.08. Collection Suit by Trustee. If an Event of Default with respect to the Notes in payment of Principal or interest specified in clause
(a) or (b) of Section 6.01 occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of Principal of, and accrued interest remaining unpaid on, together with interest on overdue Principal of, and, to the extent that payment of such interest is lawful, interest on overdue installments of interest on, the Notes, in each case at the rate specified in such Notes, and such further amount as shall be sufficient to cover all amounts owing the Trustee under
Section 7.06.

Section 6.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for amounts due the Trustee under Section 7.06) and the Holders allowed in any judicial proceedings relative to the Company (or any other obligor on the Notes), its creditors or its property and shall be entitled and empowered to collect and receive any moneys, securities or other property payable or deliverable upon conversion or exchange of the Notes or upon any such claims and to distribute the

same, and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it under Section 7.06. Nothing herein contained shall be deemed to empower the Trustee to authorize or consent to, or accept or adopt on behalf of any Holder, any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding

Section 6.10. Application of Proceeds. Any moneys or properties collected by the Trustee pursuant to this Article in respect of the Notes shall be applied in the following order at the date or dates fixed by the Trustee:

FIRST: To the payment of all amounts due the Trustee under Section 7.06;

SECOND: to Holders for amounts then due and unpaid for principal of and interest on the Notes, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal and interest; and

THIRD: To the payment of the remainder, if any, to the Company or any other person lawfully entitled thereto.

Section 6.11. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then, and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored to their former positions hereunder and thereafter all rights and remedies of the Company, Trustee and the Holders shall continue as though no such proceeding had been instituted.

Section 6.12. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, in either case in respect to the Notes, a court may require any party litigant in such suit (other than the Trustee) to file an undertaking to pay the costs of the suit, and the court may assess reasonable costs, including reasonable attorneys' fees, against any party litigant (other than the Trustee) in the suit having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.12 does not apply to a suit by

a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in principal amount of the outstanding Notes.

Section 6.13. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or wrongfully taken Notes in Section 2.09, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 6.14. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any holder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article 6 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

ARTICLE 7
TRUSTEE

Section 7.01. General. The duties and responsibilities of the Trustee shall be as set forth herein. The Trustee undertakes to perform only the duties expressly set forth herein and no implied covenant or obligation shall be read into this Indenture against the Trustee. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, unless it receives indemnity satisfactory to it against any loss, liability or expense. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article 7.

Section 7.02. Certain Rights of Trustee. (a) The Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, Officers' Certificate, Opinion of Counsel (or both), statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper person or persons. The Trustee need not investigate any fact or matter stated in

the document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit;

(b) before the Trustee acts or refrains from acting, it may require an Officers' Certificate and/or an Opinion of Counsel, which shall conform to
Section 10.03. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such certificate or opinion. Subject to
Section 7.01 and Section 7.02, whenever in the administration of the trusts of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officers' Certificate delivered to the Trustee, and such certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this Indenture upon the faith thereof;

(c) the Trustee may act through its attorneys and agents not regularly in its employ and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care;

(d) any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officers' Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any Board Resolution may be evidenced to the Trustee by a copy thereof certified by the Secretary or an Assistant Secretary of the Company;

(e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Holders, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction;

(f) the Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers or for any action it takes or omits to take in accordance with the direction of the Holders in accordance with Section 6.05 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;

(g) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; and

(h) prior to the occurrence of an Event of Default hereunder and after the curing or waiving of all Events of Default, the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, Officers' Certificate, Opinion of Counsel, Board Resolution, statement, instrument, opinion, report, notice, request, consent, order, approval, appraisal, bond, debenture, note, security, or other paper or document unless requested in writing so to do by the Holders of not less than a majority in aggregate Principal amount of the Notes then outstanding; provided that, if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expenses or liabilities as a condition to proceeding.

Section 7.03. Individual Rights of Trustee. The Trustee, in its individual or any other capacity, may become the owner or pledgee of the Notes and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not the Trustee. Any Agent may do the same with like rights.

Section 7.04. Trustee's Disclaimer. The recitals contained herein and in the Notes (except the Trustee's certificate of authentication) and the Collateral Documents shall be taken as statements of the Company and not of the Trustee and the Trustee assumes no responsibility for the correctness of the same. Neither the Trustee nor any of its agents (i) makes any representation as to the validity or adequacy of this Indenture or the Notes and (ii) shall be accountable for the Company's use or application of the proceeds from the Notes, if any.

Section 7.05. Notice of Default. If any Default with respect to the Notes occurs and is continuing and if such Default is known to the actual knowledge of a Responsible Officer of the Trustee, the Trustee shall give to each Holder of Notes notice of such Default within 90 days after it occurs (or after such Responsible Officer of the Trustee acquires knowledge thereof) to all Holders, unless such Default shall have been cured or waived before the mailing or publication of such notice; provided, however, that, except in the case of a Default in the payment of the Principal of or interest on any Note, the Trustee shall be protected in withholding such notice if the Trustee in good faith determines that the withholding of such notice is in the interests of the Holders.

Section 7.06. Compensation and Indemnity. The Company shall pay to the Trustee such compensation as shall be agreed upon in writing from time to time for its services. The compensation of the Trustee shall not be limited by any law on compensation of a Trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of pocket expenses, disbursements and advances incurred or made by the Trustee. Such expenses shall include the reasonable compensation and expenses of the Trustee's agents,

counsel and other persons not regularly in its employ. The Trustee shall not be required to make any advances hereunder.

The Company shall indemnify the Trustee for, and hold it harmless against, any loss or liability or expense incurred by it without gross negligence or bad faith on its part arising out of or in connection with the acceptance or administration of this Indenture and the Notes or the issuance of the Notes or the trusts hereunder and the performance of duties under this Indenture and the Notes, including the costs and expenses of defending itself against or investigating any claim or liability and of complying with any process served upon it or any of its officers in connection with the exercise or performance of any of its powers or duties under this Indenture and the Notes.

To secure the Company's payment obligations in this Section 7.06, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, in its capacity as Trustee, except money or property held in trust to pay Principal of, and interest on particular Notes.

The obligations of the Company under this Section to compensate and indemnify the Trustee and each predecessor Trustee and to pay or reimburse the Trustee and each predecessor Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of this Indenture or the rejection or termination of this Indenture under bankruptcy law. Such additional indebtedness shall be a senior claim to that of the Notes upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the Holders of particular Notes, and the Notes are hereby subordinated to such senior claim. If the Trustee renders services and incurs expenses following an Event of Default under Section 6.01(f) or Section 6.01(g) hereof, the parties hereto and the Holders by their acceptance of the Notes hereby agree that such expenses are intended to constitute expenses of administration under any bankruptcy law.

Section 7.07. Replacement of Trustee. A resignation or removal of the Trustee as Trustee and appointment of a successor Trustee as Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section 7.07.

The Trustee may resign as Trustee with respect to the Notes at any time by so notifying the Company in writing. The Holders of a majority in Principal amount of the outstanding Notes may remove the Trustee as Trustee with respect to the Notes by so notifying the Trustee in writing and may appoint a successor Trustee with respect thereto with the consent of the Company. The Company may remove the Trustee as Trustee with respect to the Notes if: (i) the Trustee is adjudged a bankrupt or insolvent; (ii) a receiver or other public officer takes

charge of the Trustee or its property; or (iii) the Trustee becomes incapable of acting.

If the Trustee resigns or is removed as Trustee with respect to the Notes, or if a vacancy exists in the office of Trustee with respect to the Notes for any reason, the Company shall promptly appoint a successor Trustee with respect thereto. Within one year after the successor Trustee takes office, the Holders of a majority in Principal amount of the outstanding Notes may appoint a successor Trustee in respect of such Notes to replace the successor Trustee appointed by the Company. If the successor Trustee with respect to the Notes does not deliver its written acceptance required by the next succeeding paragraph of this Section 7.07 within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of a majority in principal amount of the outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect thereto.

A successor Trustee with respect to the Notes shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Immediately after the delivery of such written acceptance, subject to the Lien provided for in Section 7.06, (i) the retiring Trustee shall transfer all property held by it as Trustee in respect of the Notes to the successor Trustee, (ii) the resignation or removal of the retiring Trustee in respect of the Notes shall become effective and (iii) the successor Trustee shall have all the rights, powers and duties of the Trustee in respect of the Notes under this Indenture. A successor Trustee shall mail notice of its succession to each Holder of Notes.

Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in the preceding paragraph.

The Company shall give notice of any resignation and any removal of the Trustee with respect to the Notes and each appointment of a successor Trustee in respect of the Notes to all Holders of Notes. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office.

Notwithstanding replacement of the Trustee with respect to the Notes pursuant to this Section 7.07, the Company's obligations under Section 7.06 shall continue for the benefit of the retiring Trustee.

Section 7.08. Successor Trustee by Merger, Etc. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation or national, banking association, the resulting, surviving or transferee corporation or national banking

association without any further act shall be the successor Trustee with the same effect as if the successor Trustee had been named as the Trustee herein.

Section 7.09. Money Held in Trust. The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law and except for money held in trust under Article 8 of this Indenture.

ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS

Section 8.01. Satisfaction and Discharge of Indenture. If at any time (a) the Company shall have paid or caused to be paid the Principal of, and interest on all the Notes outstanding hereunder (other than Notes which have been destroyed, lost or stolen and which have been replaced or paid as provided in
Section 2.09) as and when the same shall have become due and payable, or (b) the Company shall have delivered to the Trustee for cancellation all notes theretofore authenticated (other than any Notes which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.06) or (c) (i) all the notes not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and (ii) the Company shall have irrevocably deposited or caused to be deposited with the Trustee as trust funds the entire amount in cash (other than moneys repaid by the Trustee or any paying agent to the Company in accordance with Section 8.04) or U.S. Government Obligations, maturing as to principal and interest in such amounts and at such times as will insure the availability of cash sufficient to pay at maturity or upon redemption all Notes (other than any Notes which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in
Section 2.09) not theretofore delivered to the Trustee for cancellation, including principal, and interest due or to become due on or prior to such date of maturity as the case may be, and if, in any such case, the Company shall also pay or cause to be paid all other sums payable hereunder by the Company with respect to Notes, then this Indenture shall cease to be of further effect with respect to the Notes (except as to (i) rights of registration of transfer and exchange of notes, and the Company's right of optional, redemption, if any,
(ii) substitution of mutilated, defaced, destroyed, lost or stolen Notes, (iii) rights of holders to receive payments of Principal and interest thereon, upon the original stated due dates therefor (but not upon acceleration), (iv) the rights, obligations and immunities of the Trustee hereunder and (v) the rights of the Noteholders as beneficiaries hereof with respect to the property so deposited with the Trustee

payable to all or any of them), and the Trustee, on demand of the Company accompanied by an Officers' Certificate and an Opinion of Counsel, and at the cost and expense of the Company, shall execute proper instruments acknowledging such satisfaction of and discharging this Indenture; provided, that the rights of Holders of the Notes to receive amounts in respect of Principal of and interest on the Notes held by them shall not be delayed longer than required by then-applicable mandatory rules or policies of any securities exchange upon which the Notes are listed. The Company agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with this Indenture or the Notes.

Section 8.02. Application by Trustee of Funds Deposited for Payment of Notes. Subject to Section 8.04, all moneys deposited with the Trustee pursuant to Section 8.01 shall be held in trust and applied by it to the payment, either directly or through any paying agent (including the Company acting as its own paying agent), to the Holders of the particular Notes for the payment or redemption of which such moneys have been deposited with the Trustee, of all sums due and to become due thereon for principal and interest; but such money need not be segregated from other funds except to the extent required by law.

Section 8.03. Repayment of Moneys Held by Paying Agent. In connection with the satisfaction and discharge of this Indenture, all moneys then held by any paying agent under the provisions of this indenture shall, upon demand of the Company, be repaid to it or paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys.

Section 8.04. Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or any paying agent for the payment of the Principal of or interest on any Note and not applied but remaining unclaimed for two years after the date upon which such Principal or interest shall have become due and payable, shall, upon the written request of the Company and unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property law, be repaid to the Company by the Trustee or such paying agent, and the Holder of the Note shall, unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property laws, thereafter look only to the Company for any payment which such Holder may be entitled to collect, and all liability of the Trustee or any paying agent with respect to such moneys shall thereupon cease.

Section 8.05. Defeasance and Discharge of Indenture. The Company shall be deemed to have paid and shall be discharged from any and all obligations in respect of the Notes, on the 123rd day after the deposit referred to in clause
(i) hereof has been made, and the provisions of this Indenture shall no longer be in effect with respect to the Notes (and the Trustee, at the expense of the Company,

shall execute proper instruments acknowledging the same), except as to: (a) rights of registration of transfer and exchange, and the Company's right of optional redemption, (b) substitution of apparently mutilated, defaced, destroyed, lost or stolen Notes, (c) rights of holders to receive payments of Principal thereof and interest thereon, upon the original stated due dates therefore (but not upon acceleration), (d) the rights, obligations and immunities of the Trustee hereunder and (e) the rights of the Noteholders as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them; provided that the following conditions shall have been satisfied:

(i) with reference to this provision the Company has deposited or caused to be irrevocably deposited with the Trustee (or another trustee satisfying the requirements of Section 7.07) as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of the Notes, (A) money in an amount, or (B) U.S. Government Obligations which through the payment of interest and principal in respect thereof in accordance with their terms will provide not later than one day before the due date of any payment referred to in subclause
(C) of this clause (i) money in an amount, or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge without consideration of the reinvestment of such interest and after payment of all federal, state and local taxes or other charges and assessments in respect thereof payable by the Trustee the principal of, premium, if any, and each installment of interest on the outstanding Notes on the due dates thereof or earlier redemption (irrevocably provided for under agreements satisfactory to the Trustee), as the case may be, in accordance with the terms of Notes and the Indenture;

(ii) the Company has delivered to the Trustee (A) either (x) an Opinion of Counsel to the effect that Holders of Notes will not recognize income, gain or loss for federal income tax purposes as a result of the Company's exercise of its option under this Section 8.05 and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit, defeasance and discharge had not occurred, which Opinion of Counsel must be based upon a ruling of the Internal Revenue Service to the same effect or a change in applicable federal income tax law or related treasury regulations after the date of this Indenture or (y) a ruling directed to the Trustee received from the Internal Revenue Service to the same effect as the aforementioned Opinion of Counsel and (B) an Opinion of Counsel to the effect that the creation of the defeasance trust does not violate the Investment Company Act of 1940 and after the passage of 123 days following the deposit, the trust fund will, not be subject to the effect of

Section 547 of the U.S. Bankruptcy Code or Section 15 of the New York Debtor and Creditor Law;

(iii) immediately after giving effect to such deposit on a pro forma basis, no Event of Default, or event that after the giving of notice or lapse of time or both would become an Event of Default, shall have occurred and be continuing on the date of such deposit or during the period ending on the 123rd day after the date of such deposit, and such deposit shall not result in a breach or violation of, or constitute a default under, any other agreement or instrument to which the Company is a party or by which the Company is bound; and

(iv) if at such time the Notes are listed on a national securities exchange, the Company has delivered to the Trustee an Opinion of Counsel to the effect that the Notes will not be delisted as a result of such deposit, defeasance and discharge.

Section 8.06. Defeasance of Certain Obligations. The Company may omit to comply with any term, provision or condition set forth in, and this Indenture will no longer be in effect with respect to, any covenant in Article 4 (other than Section 4.01), Section 5.01, or Article 11 or in any indenture supplemental hereto and clause (c) (with respect to any covenants in Article 4 or Section 5.01 or in any indenture supplemental) and clause (e) of Section 6.01 shall be deemed not to be an Event of Default, if

(a) with reference to this Section 8.06, the Company has deposited or caused to be irrevocably deposited with the Trustee (or another trustee satisfying the requirements of Section 7.07) as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of the Notes and the Indenture with respect to the Notes, (i) money in an amount or (ii) U.S. Government Obligations which through the payment of principal and interest in respect thereof in accordance with their terms will provide not later than one day before the due dates thereof or earlier redemption (irrevocably provided for under agreements satisfactory to the Trustee), as the case may be, of any payment referred to in subclause (iii) of this clause (a) money in an amount, or (iii) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge without consideration of the reinvestment of such interest and after payment of all federal, state and local taxes or other charges and assessments in respect thereof payable by the Trustee, the principal of, premium, if any, and each installment of interest on the outstanding Notes on the due date thereof or earlier redemption (irrevocably provided for under arrangements satisfactory to the Trustee), as the case may be;

(b) the Company has delivered to the Trustee (i) an Opinion of Counsel to the effect that Holders of Notes will not recognize income, gain or loss for federal, income tax purposes as a result of the Company's exercise of its option under this Section 8.06 and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred and (ii) an Opinion of Counsel to the effect that the creation of the defeasance trust does not violate the Investment Company Act of 1940 and after the passage of 123 days following the deposit, the trust fund will not be subject to the effect of
Section 547 of the U.S. Bankruptcy Code or Section 15 of the New York Debtor and Creditor Law;

(c) immediately after giving effect to such deposit on a pro forma basis, no Event of Default, or event that after the giving of notice or lapse of time or both would become an Event of Default, shall have occurred and be continuing on the date of such deposit or during the period ending on the 123rd day after the date of such deposit, and such deposit shall not result in a breach or violation of, or constitute a default under, any other agreement or instrument to which the Company is a party or by which the Company is bound; and

(d) if at such time the Notes are listed on a national securities exchange, the Company has delivered to the Trustee an Opinion of Counsel to the effect that the Notes will not be delisted as a result of such deposit, defeasance and discharge.

Section 8.07. Reinstatement. If the Trustee or paying agent is unable to apply any monies or U.S. Government Obligations in accordance with Article 8 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to this Article until such time as the Trustee or paying agent is permitted to apply all such monies or U.S. Government Obligations in accordance with Article 8; provided, however, that if the Company has made any payment of principal of, premium, if any, or interest on any Notes because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the monies or U.S. Government Obligations held by the Trustee or paying agent.

ARTICLE 9
AMENDMENTS, SUPPLEMENTS AND WAIVERS

Section 9.01. Without Consent of Holders. The Company and the Trustee may amend or supplement this Indenture or the Notes without notice to or the consent of any Holder:

(i) to cure any ambiguity, defect or inconsistency in this Indenture; provided that such amendments or supplements shall not adversely affect the interests of the Holders in any material respect;

(ii) to comply with Article 5;

(iii) to comply with any requirements of the Commission in connection with the qualification of the Indenture under the Trust Indenture Act of 1939;

(iv) to evidence and provide for the acceptance of appointment hereunder with respect to the Notes by a successor Trustee;

(v) establish the form or forms or terms of Notes;

(vi) to provide for certificated or unregistered securities and to make all appropriate changes for such purpose;

(vii) to directly or indirectly release the Liens created by the Collateral Documents on less than all or substantially all the Collateral; or

(viii) to make any change that does not materially and adversely affect the rights of any Holder.

The Collateral Documents may be amended or supplemented as provided therein and compliance with any of the provisions of the Collateral Documents may be waived as provided therein.

Section 9.02. With Consent of Holders. Subject to Section 6.04 and Section 6.07, without prior notice to any Holders, the Company and the Trustee may amend this Indenture and the Notes with the written consent of the Holders of not less than a majority in aggregate Principal amount of the outstanding Notes affected by such amendment (voting as a single class) and the Holders of a majority in principal amount of the outstanding Notes affected thereby (voting as a single class) by written notice to the Trustee may waive future compliance by the Company with any provision of this Indenture or the Notes.

Notwithstanding the provisions of this Section 9.02, without the consent of each Holder affected thereby, an amendment or waiver, including a waiver pursuant to Section 6.04, may not:

(a) change the stated maturity of the Principal of or any installment of interest on, such Holder's Note;

(b) reduce the Principal amount thereof or the rate of interest thereon;

(c) reduce the above stated percentage of outstanding Notes the consent of whose holders is necessary to modify or amend the Indenture; or

(d) reduce the percentage or aggregate principal amount of outstanding Notes the consent of whose Holders is required for any supplemental indenture, for any waiver of compliance with certain provisions of this Indenture or certain Defaults and their consequences provided for in this Indenture.

It shall not be necessary for the consent of any Holder under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Company shall give to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver. The Company will mail supplemental indentures to Holders upon request. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture or waiver.

Section 9.03. Revocation and Effect of Consent. Until an amendment or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Note or portion of a Note that evidences the same Debt as the Note of the consenting Holder, even if notation of the consent is not made on any Note. However, any such Holder or subsequent Holder may revoke the consent as to its Note or portion of its Note. Such revocation shall be effective only if the Trustee receives the notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver shall become effective with respect to any Notes affected thereby on receipt by the Trustee of written consents from the requisite Holders of outstanding Notes affected thereby.

The Company may, but shall not be obligated to, fix a record date (which may be not less than five nor more than 60 days prior to the solicitation of consents) for the purpose of determining the Holders of the Notes entitled to consent to any amendment, supplement or waiver. If a record date is fixed, then, notwithstanding the immediately preceding paragraph, those Persons who were such Holders at such record date (or their duly designated proxies) and only those Persons shall be entitled to consent to such amendment, supplement or waiver or to revoke any consent previously given, whether or not such Persons continue to be such Holders after such record date. No such consent shall be valid or effective for more than 90 days after such record date.

After an amendment, supplement or waiver becomes effective with respect to the Notes, it shall bind every Holder unless it is of the type described in any of clauses (i) through (iv) of Section 9.02. In case of an amendment or waiver of the

type described in clauses (i) through (iv) of Section 9.02, the amendment or waiver shall bind each such Holder who has consented to it and every subsequent Holder of a Note that evidences the same indebtedness as the Note of the consenting Holder.

Section 9.04. Notation on or Exchange of Notes. If an amendment, supplement or waiver changes the terms of any Note, the Trustee may require the Holder thereof to deliver it to the Trustee. The Trustee may place an appropriate notation (provided in writing by the Company) on the Note about the changed terms and return it to the Holder and the Trustee may place an appropriate notation on any Note thereafter authenticated. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Note shall issue and the Trustee shall authenticate a new Note of the same tenor that reflects the changed terms.

Section 9.05. Trustee to Sign Amendments, Etc. The Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of any amendment, supplement or waiver authorized pursuant to this Article 9 is authorized or permitted by this Indenture, stating that all requisite consents have been obtained or that no consents are required and stating that such supplemental indenture constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to customary exceptions. Subject to the preceding sentence, the Trustee shall sign such amendment, supplement or waiver if the same does not adversely affect the rights of the Trustee. The Trustee may, but shall not be obligated to, execute any such amendment, supplement or waiver that affects the Trustee's own rights, duties or immunities under this Indenture or otherwise.

ARTICLE 10
MISCELLANEOUS

Section 10.01. Notices. Any notice or communication shall be sufficiently given if written and (a) if delivered in person when received, or (b) if mailed by first class mail 5 days after mailing, or (c) as between the Company and the Trustee if sent by facsimile transmission, where transmission is confirmed, in each case addressed as follows:

if to the Company:

The AES Corporation
1001 North 19th Street
Arlington, VA 22209
Telecopy: (703) 528-4510
Attention: General Counsel

if to the Trustee:

Wells Fargo Bank Minnesota,

National Association
Corporate Trust Services
Sixth Street and Marquette Avenue
MAC N9303-120

Minneapolis, MN 55479

Telecopy: (612) 669-9825
Attention: AES Corporation Administrator

The Company or the Trustee by written notice to the other may designate additional or different addresses for subsequent notices or communications.

Any notice or communication shall be sufficiently given to Holders by mailing to such Holders at their addresses as they shall appear on the Note Register. Notice mailed shall be sufficiently given if so mailed within the time prescribed. Copies of any such communication or notice to a Holder shall also be mailed to the Trustee and each Agent at the same time.

Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. Except as otherwise provided in this Indenture, if a notice or communication is mailed in the manner provided in this Section 10.01, it is duly given, whether or not the addressee receives it.

Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

In case it shall be impracticable to give notice as herein contemplated, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

Section 10.02. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:

(a) an Officers' Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

(b) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

Section 10.03. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

(a) a statement that each person signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(b) a brief statement as to the nature and scope of the examination or investigation upon which the statement or opinion contained in such certificate or opinion is based;

(c) a statement that, in the opinion of each such person, be has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(d) a statement as to whether or not, in the opinion of each such person, such condition or covenant has been complied with; provided, however, that, with respect to matters of fact, an Opinion of Counsel may rely on an Officers' Certificate or certificates of public officials.

Section 10.04. Evidence of Ownership.

The Company, the Trustee and any agent of the Company or the Trustee may deem and treat the person in whose name any Note shall be registered upon the Note Register as the absolute owner of such Note (whether or not such Note shall be overdue and notwithstanding any notation of ownership or other writing thereon) for the purpose of receiving payment of or on account of the Principal of and, subject to the provisions of this Indenture, interest on such Note and for all other purposes; and neither the Company nor the Trustee nor any agent of the Company or the Trustee shall be affected by any notice to the contrary.

Section 10.05. Rules by Trustee, Paying Agent or Registrar. The Trustee may make reasonable rules for action by or at a meeting of Holders. The Paying Agent or Registrar may make reasonable rules for its functions.

Section 10.06. Payment Date Other Than a Business Day. If any date for payment of Principal or interest on any Note shall not be a Business Day at any place of payment, then payment of Principal of or interest on such Note, as the case nay be, need not be made on such date, but may be made on the next succeeding Business Day at any place of payment with the same force and effect as if made on such date and no interest shall accrue in respect of such payment for the period from and after such date.

Section 10.07. Governing Law. The laws of the State of New York shall govern this Indenture and the Notes, without giving effect to such state's conflicts of laws principles.

Section 10.08. No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret another indenture or loan or debt agreement of the Company or any Subsidiary of the Company. No indenture or agreement may be used to interpret this Indenture except as provided in Section 1.01 with respect to the Senior Secured Credit Facilities.

Section 10.09. Successors. All agreements of the Company in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors.

Section 10.10. Duplicate Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

Section 10.11. Separability. In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 10.12. Table of Contents, Headings, Etc. The Table of Contents and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms and provisions hereof.

Section 10.13. Incorporators, Stockholders, Officers and Directors of Company Exempt from Individual Liability. No recourse under or upon any obligation, covenant or agreement contained in this Indenture or any indenture supplemental hereto, or in any Note, or because of any indebtedness evidenced thereby, shall be had against any incorporator, as such or against any past, present or future stockholder, officer, director or employee, as such, of the Company or of any successor, either directly or through the Company or any successor, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability

being expressly waived and released by the acceptance of the Notes by the holders thereof and as part of the consideration for the issue of the Notes.

Section 10.14. Judgment Currency. The Company agrees, to the fullest extent that it may effectively do so under applicable law, that (a) if for the purpose of obtaining judgment in any court it is necessary to convert the sum due in respect of the Principal of or interest on the Notes (the "Required Currency") into a currency in which a judgment will be rendered (the "Judgment Currency"), the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the day on which final unappealable judgment is entered, unless such day is not a Business Day, then, to the extent permitted by applicable law, the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the Business Day preceding the day on which final unappealable judgment is entered and (b) its obligations under this Indenture to make payments in the Required Currency (i) shall not be discharged or satisfied by any tender, or any recovery pursuant to any judgment (whether or not entered in accordance with subsection (a)), in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the actual receipt, by the payee, of the full amount of the Required Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of action for the purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall short of the full amount of the Required Currency so expressed to be payable and (iii) shall not be affected by judgment being obtained for any other sum due under this Indenture.

ARTICLE 11
SECURITY ARRANGEMENTS

Section 11.01. Security. (a) In order to secure the Company's Obligations under the Indenture equally and ratably with the Senior Secured Credit Facility Obligations, the Company will, and will cause each of its Subsidiaries named in any of the Collateral Documents as a party thereto, to execute and deliver to the Collateral Trustees prior to the Original Issue Date each Collateral Document to which it is a party. The Company and its Subsidiaries shall comply with all covenants and agreements contained in the Collateral Documents the failure to comply with which would have a material and adverse effect on the Liens purported to be created thereby, unless such failure to comply is waived by the requisite lenders under the Senior Secured Credit Facilities and if, after that waiver, the Company is in compliance with Sections 4.06 and 4.07.

The Company will give the Trustee notice of such waiver within 50 consecutive days of such waiver.

(b) The Trustee and each holder of each Note by its acceptance of that Note acknowledges and agrees that:

(i) this Indenture, as originally executed and delivered by the parties hereto, does not create any Lien on any property or securities which secures the Company's Obligations under this Indenture or this Indenture;

(ii) the Collateral Documents, when executed and delivered by the parties thereto, will comply with the provisions of Sections 4.06 and 4.07;

(iii) the Collateral Documents provide, and any security document that becomes effective after the Original Issue Date, may provide, that the Liens created thereby or thereunder automatically will be released and extinguished with respect to any property or security that is transferred or otherwise disposed of in accordance with the terms of the Senior Secured Credit Facilities;

(iv) without the necessity of any consent of or notice to the Trustee or any holder of the Company's Obligations under the Indenture, the Company and the Collateral Trustees may amend, modify, supplement or terminate any Collateral Document as long as the Company remains in compliance with Sections 4.06 and 4.07; provided that any such amendment, modification, supplement or termination which would release, in one transaction or in a series of related transactions, the Liens created by the Collateral Documents on all or substantially all of the Collateral will require the consent of the Holders of a majority in aggregate principal amount of the Notes outstanding;

(v) as among the Trustee and the holders of the Company's Obligations under the Indenture and the lenders under the Senior Secured Credit Facilities and the Collateral Trustees, those lenders and the Collateral Trustees will have the sole ability to control and obtain remedies with respect to all Collateral (including on sale or liquidation of any Collateral after acceleration of the Notes or the Senior Secured Credit Facility Obligations) without the necessity of any consent of or notice to the Trustee or any such holder;

(vi) any or all Liens granted under the Collateral Documents for the benefit of the Holders will be automatically released, without the necessity of any consent of the Trustee or any Holders, upon a release of

such Lien or Liens pursuant to the terms of the Collateral Documents and the Senior Secured Credit Facilities or if such release is approved by the requisite lenders under the Senior Secured Credit Facilities; provided that any release, in one transaction or a series of related transactions, of the Liens created by the Collateral Documents on all or substantially all of the Collateral will require the consent of the Holders of a majority in aggregate principal amount of the Notes outstanding.

(vii) the relative rights of the holders of the Company's Obligations under the Indenture and the holders of indebtedness or other obligations secured by Liens on the Collateral are governed by, and are subject to the terms and conditions of, the Collateral Documents and not this Indenture; and

(viii) without the necessity of any consent of or notice to the Trustee or any holder of the Company's Obligations under the Indenture, the Company may, on behalf of itself or any of its Subsidiaries, request and instruct the Collateral Trustees to, on behalf of each secured party under the Collateral Documents, (A) execute and deliver to the Company, for the benefit of any Person, such release documents as the Company may reasonably request, of all liens and security interests held by the Collateral Trustees in such assets, and such Person shall be entitled to rely conclusively on such release document, and (B) deliver any such assets in the possession of the Collateral Trustees to the Company.

Section 11.02. Notice of Payment, Discharge or Defeasance. The Trustee and each Holder, by its acceptance of a Note, agree that upon the payment in full or discharge pursuant to Article 8 of the Company's Obligations under the Indenture, the Trustee shall without notice to or consent of any Holder, upon the written request of the Company, certify to the Collateral Trustees, in writing, that the Company's Obligations under the Indenture have been paid in full, or that this Indenture has been discharged in accordance with Article 8.

SIGNATURES

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

THE AES CORPORATION
as the Company

Attest:                          By:       /s/ Barry J. Sharp
                                       -----------------------------------
                                       Name:   Barry J. Sharp
                                       Title:  Executive Vice President and
                                               Chief Financial Officer

WELLS FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as the Trustee

Attest:                          By:      /s/ Jane Y. Schweiger
                                       ----------------------------------
                                       Name:  Jane Y. Schweiger
                                       Title: Vice President

EXHIBIT A

[FACE OF NOTE]

THE AES CORPORATION

10% Senior Secured Note Due 2005

[CUSIP] [CINS] _______________

$_______________

The AES Corporation, a Delaware corporation (the "Company", which term includes any successor under the Indenture hereinafter referred to), for value received, promises to pay to ____________________, or its registered assigns, the principal sum of ____________ DOLLARS ($______) on the Final Maturity Date (as defined on the reverse hereof).

Interest Rate:           10% per annum.

Interest Payment Dates:  June 15 and December 15, commencing _________.

Regular Record Dates:    June 1 and December 1.

Reference is hereby made to the further provisions of this Senior Secured Note set forth on the reverse hereof, which will for all purposes have the same effect as if set forth at this place.

IN WITNESS WHEREOF, the Company has caused this Senior Secured Note to be signed manually or by facsimile by its duly authorized officers.

Date:                                      THE AES CORPORATION


                                           By:
                                              -------------------------------
                                              Name:

Title:

Title:

(Form of Trustee's Certificate of Authentication)

This is one of the 10% Senior Secured Notes Due 2005 described in the Indenture referred to in this Note.

WELLS FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee

[REVERSE SIDE OF NOTE]

THE AES CORPORATION

SENIOR SECURED NOTE DUE 2005

1. Principal and 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 the principal amount set forth on the reverse side hereof on the Final Maturity Date.

The "Final Maturity Date" means December 12, 2005; provided, however, that if, prior to July 15, 2005, the Company's 4.50% Junior Subordinated Convertible Debentures have not been refinanced to mature on a date after December 12, 2005, then Final Maturity Date means July 15, 2005; provided further that if the Final Maturity Date occurs on a day that is not a Euro-Dollar Business Day, the Final Maturity 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 Final Maturity Date shall be the next preceding Euro-Dollar Business Day.

The Company 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 10% per annum. Interest on this Senior Secured Note will accrue from and including the most recent date to which interest has been paid or, if no interest has been paid, from December 13, 2002 through but excluding the date on which interest is paid. Interest shall be payable in arrears on December 15 and June 15 of each year (each an "Interest Payment Date"), commencing ___________. Interest will be computed on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on the Senior Secured Notes is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date.

2. Method of Payment. The Company will pay interest on the Senior Secured Notes (except defaulted interest) to the Persons who are registered Holders of Senior Secured Notes at the close of business on the fifteenth calendar day prior to each Interest Payment Date (each, a "Regular Record Date").

All payments of principal of, and any interest on the Senior Secured Notes issued in global form will be made to the Depositary as the registered holder thereof. The Company expects that the Depositary, upon receipt of any payment

of principal or interest on such Senior Secured Notes, will credit the accounts of persons who have accounts with the Depositary ("participants") with payment of principal or interest on the date payable in amounts proportionate to their respective beneficial interests in the principal amount of such Senior Secured Note as shown on the records of the Depositary. The Company also expects that payments by participants to owners of beneficial interests in any Senior Secured Note held through such participants will be governed by standing instructions and customary practices. Such payments will be the responsibility of such participants. Holders must surrender any Certificated Notes to a Paying Agent to collect the principal payment on such Certificated Notes. At the Company's option, interest on any Certificated Notes will be payable by a U.S. dollar check mailed to the registered address of the Holder of such Certificated Note. 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.

3. Paying Agent and Registrar. Initially, Wells Fargo Bank Minnesota, National Association (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 Senior Secured Notes under an Indenture dated as of December 13, 2002 between the Company and the Trustee. The terms of the Senior Secured Notes include those stated in the Indenture. The Senior Secured Notes are subject to all such terms, and Holders of the Senior Secured Notes are referred to the Indenture for a statement of them. Capitalized terms used herein and not otherwise defined have the meanings set forth in the Indenture. The Senior Secured Notes are senior secured obligations of the Company. The Indenture limits, among other things, the ability of the Company to incur certain additional secured indebtedness, provide guarantees, enter into certain sale and leaseback transactions and requires the Company to use a portion of Adjusted Free Cash Flow and a portion of the Net Cash Proceeds from certain asset sales and capital markets transactions to redeem the Senior Secured Notes.

5. Optional Redemption. The Senior Secured Notes will be redeemable, in whole or in part, at any time, and from time to time, at the option of the Company upon not less than 30 nor more than 60 days' notice at a redemption price equal to (a) the sum of (i) 100% of the principal amount thereof plus accrued and unpaid interest to the redemption date plus (ii) a Make-Whole Amount (as defined in the Indenture), if any, if redeemed on or prior to December 15, 2004 or (b) 100% of the principal amount thereof plus any accrued and unpaid interest, if redeemed after December 15, 2004.

6. Mandatory Redemption Upon Receipt of Net Cash Proceeds and Adjusted Free Cash Flow. (a) Within 90 days of the Company's receipt of the Net Cash Proceeds from certain Asset Sales, called Covered Asset Sales, the

Company may be obligated to use a portion of the Net Cash Proceeds from such Asset Sales to make a mandatory redemption of the Senior Secured Notes at a purchase price equal to 100% of the principal amount of such notes plus accrued interest, if any, to the date of purchase.

(b) If at the end of any fiscal year the Company has certain Adjusted Free Cash Flow, the Company may be obligated to use a portion of such Adjusted Free Cash Flow, within 90 days of such fiscal year end, to make a mandatory redemption of the Senior Secured Notes at a purchase price equal to 100% of the principal amount of such notes plus accrued interest, if any, to the date of purchase.

(c) Within 90 days of the consummation of a Covered Capital Markets Transaction, the Company may be obligated to use 50% of the Net Cash Proceeds from such Covered Capital Markets Transaction to make a mandatory redemption of the Senior Secured Notes at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest to the date of redemption; provided that the Company shall not be obligated to make such mandatory redemption unless, on the date that such Covered Capital Markets Transaction is consummated, the amounts outstanding under the Senior Secured Credit Facilities is zero and all commitments to extend credit thereunder have been terminated.

The Company's obligations to make the mandatory redemptions set forth in clauses (a), (b) and (c) above are subject to a number of conditions which are set forth in Section 3.02 of the Indenture.

7. Additional Mandatory Redemption. On November 25, 2004, the Company shall redeem, at a price equal to 100% of the principal amount of such Notes to be redeemed, plus accrued and unpaid interest, Senior Secured Notes with an aggregate principal amount equal to (i) 40% of the aggregate principal amount of the Senior Secured Notes issued on the Original Issue Date less (ii) the aggregate principal amount of Senior Secured Notes redeemed on or prior to November 25, 2004 pursuant to the optional and mandatory redemption provisions described in Section 5 and Section 6 of this Note.

8. Partial Redemption, Notice of Redemption.

If less than all the Senior Secured Notes are to be redeemed at any time, selection of Senior Secured Notes for redemption will be made by the Trustee on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate; provided that no Senior Secured Notes of $1,000 or less shall be redeemed in part.

Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each Holder of Senior Secured Notes to be redeemed at its registered address. If any Senior Secured Note is to be

redeemed in part only, the notice of redemption that relates to such Senior Secured Note shall state the portion of the principal amount thereof to be redeemed. A new Senior Secured Note in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon surrender of the original Senior Secured Note. Senior Secured Notes called for redemption become due on the date fixed for redemption. On and after the redemption date the Senior Secured Notes shall cease to be entitled to any benefit under the Indenture and the Holders thereof shall have no right in respect of such Senior Secured Notes except the right to receive the redemption price thereof and unpaid interest to the date fixed for redemption.

9. Denominations, Transfer, Exchange. The Senior Secured Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. A Holder may transfer or exchange Senior Secured Notes only in accordance with the Indenture and as set forth in the Restricted Legend and the DTC Legend. 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 Senior Secured Notes or portion of a Senior Secured Note selected for redemption, or transfer or exchange any Senior Secured Notes for a period of 15 days before selection of such Senior Secured Notes to be redeemed.

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

11. 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.

12. Amendment, Supplement, Waiver. The Company and the Trustee may, without the consent of the holders of any outstanding Senior Secured Notes, amend, waive or supplement the Indenture or the Senior Secured Notes for certain specified purposes, including, among other things, curing ambiguities, defects or inconsistencies, directly or indirectly releasing the Liens created by the Collateral Documents on less than all or substantially all the Collateral 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 Senior Secured 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 Senior Secured Notes.

13. Successor Corporation. When a successor corporation assumes all the obligation of its predecessor under the Senior Secured 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.

14. 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 6.01(f) or (g) 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 Senior Secured Notes (voting as a single class) may, or the Trustee, may declare the principal of, plus accrued interest, if any, to be due and payable immediately; provided that if an Event of Default has occurred and is continuing as a result of a default described in Section 6.01(d) of the Indenture arising under the Senior Secured Credit Facilities (other than a payment default or a default as a result of which the maturity of the Senior Secured Credit Facilities shall have been accelerated so that they shall be or become due and payable prior to the date on which the same would otherwise have become due and payable), such acceleration may not occur until 20 business days after the occurrence of such default unless such default under the Senior Secured Credit Facilities results from a bankruptcy or insolvency related event involving a Subsidiary of the Company or the acceleration of other indebtedness arising from such bankruptcy or insolvency related event, in which case such acceleration may not occur until 60 days after the occurrence of such default. Upon a declaration of acceleration, the principal, premium, if any, and accrued interest shall be immediately due and payable.

If an Event of Default specified in Section 6.1(f) or (g) of the Indenture with respect to the Company occurs and is continuing, the principal of and accrued interest on all of the Senior Secured 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 Senior Secured Notes may not enforce the Indenture or the Senior Secured Notes except as provided in the Indenture. The Trustee may require indemnity reasonably satisfactory to it before it enforces the Indenture or the Senior Secured Notes. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Senior Secured Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Senior Secured 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.

15. Security. In order to secure the Company's Obligations under the Indenture, the Company and certain of its Subsidiaries have entered into the Collateral Documents. The Company's Obligations under the Indenture shall be

secured by Liens on the Collateral in accordance with the terms and provisions of the Collateral Documents. The Indenture requires that Holders of the Senior Secured Notes be granted a lien equally and ratably with any lien granted on additional assets to secure the holders of Senior Secured Credit Facility Obligations subsequent to the Issue Date. Each Holder of this Senior Secured Note, by accepting the same, agrees that (i) the Collateral Documents provide, and any Collateral Document that becomes effective after the Issue Date, may provide, that the Liens created thereby or thereunder automatically will be released and extinguished with respect to any property or security that is transferred or otherwise disposed of in accordance with the terms of the Senior Secured Credit Facilities; (ii) without the necessity of any consent of or notice to the Trustee or any Holder under the Indenture, the Company and the Collateral Trustees may amend, modify, supplement or terminate any Collateral Document as long as the Company remains in compliance with the Indenture; (iii) as among the Trustee and the Holders under the Indenture and the lenders under the Senior Secured Credit Facilities and the Collateral Trustees, those lenders and the Collateral Trustees will have the sole ability to control and obtain remedies with respect to all Collateral (including on sale or liquidation of any Collateral after acceleration of the Senior Secured Notes or the Senior Secured Credit Facility Obligations) without the necessity of any consent of or notice to the Trustee or any such holder; (iv) any or all Liens granted under the Collateral Documents for the benefit of the Holders will be automatically released, without the necessity of any consent of the Trustee or the Holders, upon a release of such Lien or Liens pursuant to the terms of the Collateral Documents and the Senior Secured Credit Facilities or if such release is approved by the requisite lenders under the Senior Secured Credit Facilities; provided that any release, in one transaction or a series of related transactions, of the Liens created by the Collateral Documents on all or substantially all of the Collateral will require the consent of the Holders of a majority in aggregate principal amount of the outstanding Senior Secured Notes; (v) the relative rights of the Holders under the Indenture and the holders of Indebtedness or other obligations secured by Liens on the Collateral are governed by, and are subject to the terms and conditions of, the Collateral Documents and not the Indenture; and (vi) without the necessity of any consent of or notice to the Trustee or any Holder, the Company may, on behalf of itself or any of its Subsidiaries, request and instruct the Collateral Trustees to, on behalf of each secured party under the Collateral Documents, (A) execute and deliver to the Company, for the benefit of any Person, such release documents as the Company may reasonably request, of all liens and security interests held by the Collateral Trustees in such assets, and such Person shall be entitled to rely conclusively on such release document, and (B) deliver any such assets in the possession of the Collateral Trustees to the Company.

16. 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.

17. 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 Senior Secured 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 Senior Secured Notes by accepting a Senior Secured Note waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Senior Secured Notes.

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

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

20. Abbreviations. Customary abbreviations may be used in the name of a Holder of Senior Secured 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).

21. GOVERNING LAW. THE INDENTURE AND THIS SENIOR SECURED 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 Senior Secured 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

[FORM OF TRANSFER NOTICE]

FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto

Insert Taxpayer Identification No.

[THE FOLLOWING PROVISION TO BE INCLUDED ON ALL
CERTIFICATES BEARING A RESTRICTED LEGEND]

In connection with any transfer of this Senior Secured Note occurring prior to ______________, the undersigned confirms that such transfer is made without utilizing any general solicitation or general advertising and further as follows:

Check One

[_] (a) This Note is being transferred to a "qualified institutional buyer" in compliance with Rule 144A under the Securities Act of 1933, as amended and a Rule 144A Certificate (as defined in the Indenture) is being furnished herewith.

[_] (b) This Note is being transferred to a Non-U.S. Person in compliance with the exemption from registration under the Securities Act of 1933, as amended, provided by Regulation S thereunder, and certification in the form of Exhibit D to the Indenture is being furnished herewith.

[_] (c) This Note is being transferred to the Company.

or

[_] (d) This Note is being transferred other than in accordance with (a),
(b) or (c) above and documents are being furnished which comply with the conditions of transfer set forth in this Note and the Indenture.

If none of the foregoing boxes is checked, the Trustee is not obligated to register this Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in the Indenture have been satisfied.

Date:____________________

NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever.

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 Association 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.

                      Amount of          Amount of      Principal amount
                     decrease in        increase in      of this Global    Signature of
                   principal amount   principal amount   Note following     authorized
                    of this Global     of this Global     such decrease     officer of
Date of Exchange         Note               Note          (or increase)      Trustee
---------------------------------------------------------------------------------------

EXHIBIT B

RESTRICTED LEGEND

THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE LAWS OF ANY STATE OR OTHER JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER

(1) REPRESENTS THAT

(A) IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A "QUALIFIED INSTITUTIONAL BUYER" (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, OR

(B) IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT), OR

(C) IT IS EITHER THE PERSIMMON TRUST, A CHARITABLE TRUST ESTABLISHED BY ROGER W. SANT, A DIRECTOR OF THE ISSUER, OR PAUL T. HANRAHAN, AN EXECUTIVE OFFICER OF THE ISSUER, AND IS AN ACCREDITED INVESTOR AS DEFINED IN RULE 501 UNDER THE SECURITIES ACT, AND

(2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY

(A) TO THE COMPANY,

(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE
UNDER THE SECURITIES ACT,

(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,

(D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT,

(E) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(E) ABOVE, THE COMPANY RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY RULE 144 EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

EXHIBIT C

DTC LEGEND

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS A BENEFICIAL INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE TRANSFER PROVISIONS OF THE INDENTURE.

EXHIBIT D

Regulation S Certificate

_____________, _____

WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
Attention: Corporate Trust Services
Sixth Street and Marquette Avenue
MAC N9303-120
Minneapolis, MN 55470

Ladies and Gentlemen:

Terms are used in this Certificate as used in Regulation S ("Regulation S") under the Securities Act of 1933, as amended (the "Securities Act"), except as otherwise stated herein.

[CHECK A OR B AS APPLICABLE.]

[_]  A.   This Certificate relates to our proposed transfer of $____ principal
          amount of Notes issued under the Indenture. We hereby certify as
          follows:

          1.   The offer and sale of the Notes was not and will not be made to
               a person in the United States (unless such person is excluded
               from the definition of "U.S. person" pursuant to Rule
               902(k)(2)(vi) or the account held by it for which it is acting
               is excluded from the definition of "U.S. person" pursuant to
               Rule 902(k)(2)(i) under the circumstances described in Rule
               902(h)(3)) and such offer and sale was not and will not be
               specifically targeted at an identifiable group of U.S. citizens
               abroad.

          2.   Unless the circumstances described in the parenthetical in
               paragraph 1 above are applicable, either (a) at the time the buy
               order was originated, the buyer was outside the United States or
               we and any person acting on our behalf reasonably believed that
               the buyer was outside the United States or (b) the transaction
               was executed in, on or through the facilities of a designated
               offshore securities market, and neither we nor any person acting
               on our behalf knows that the transaction was pre-arranged with a
               buyer in the United States.

          3.   Neither we, any of our affiliates, nor any person acting on our
               or their behalf has made any directed selling efforts in the
               United States with respect to the Notes.

          4.   The proposed transfer of Notes is not part of a plan or scheme
               to evade the registration requirements of the Securities Act.

          5.   If we are a dealer or a person receiving a selling concession,
               fee or other remuneration in respect of the Notes, and the
               proposed transfer takes place during the Restricted Period (as
               defined in the Indenture), or we are an officer or director of
               the Company, we certify that the proposed transfer is being made
               in accordance with the provisions of Rule 904(b) of Regulation
               S.

[_]  B.   This Certificate relates to our proposed exchange of $____ principal
          amount of Notes issued under the Indenture for an equal principal
          amount of Notes to be held by us. We hereby certify as follows:

          1.   At the time the offer and sale of the Notes was made to us,
               either (i) we were not in the United States or (ii) we were
               excluded from the definition of "U.S. person" pursuant to Rule
               902(k)(2)(vi) or the account held by us for which we were acting
               was excluded from the definition of "U.S. person" pursuant to
               Rule 902(k)(2)(i) under the circumstances described in Rule
               902(h)(3); and we were not a member of an identifiable group of
               U.S. citizens abroad.

          2.   Unless the circumstances described in paragraph 1(ii) above are
               applicable, either (a) at the time our buy order was originated,
               we were outside the United States or (b) the transaction was
               executed in, on or through the facilities of a designated
               offshore securities market and we did not pre-arrange the
               transaction in the United States.

          3.   The proposed exchange of Notes is not part of a plan or scheme
               to evade the registration requirements of the Securities Act.

You and the Company are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

Very truly yours,

[NAME OF SELLER (FOR TRANSFERS)
OR OWNER (FOR EXCHANGES)]

Title:
Address

EXHIBIT E

TAX LEGEND

THIS SENIOR SECURED NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL INCOME TAX PURPOSES. THE HOLDER OF THIS SENIOR SECURED NOTE MAY CONTACT THE AES CORPORATION, ATTN: BARRY J. SHARP, EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, 1001 NORTH 19TH STREET, 20TH FLOOR, ARLINGTON, VA 22209 FOR INFORMATION REGARDING THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE, YIELD TO MATURITY, COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE OF THIS SENIOR SECURED NOTE, SUCH INFORMATION TO BE PROVIDED BEGINNING NO LATER THAN 10 DAYS AFTER THE ISSUE DATE, PROMPTLY UPON REQUEST.

EXHIBIT 4.2

EXECUTION COPY

COLLATERAL TRUST AGREEMENT

dated as of December 12, 2002

among

The Grantors referred to herein
as Grantors

and

WILMINGTON TRUST COMPANY
as Corporate Trustee

and

BRUCE L. BISSON
as Individual Trustee

SECTION 4.01. Collateral Trust Agreement Default Notice.......................11
SECTION 4.02. Direction by Required Representative(s).........................13
SECTION 4.03. Right to Initiate Judicial Proceedings, Etc.....................13
SECTION 4.04. Remedies Not Exclusive..........................................13
SECTION 4.05. Waiver of Certain Rights........................................14
SECTION 4.06. Limitation on Collateral Trustees' Duties in Respect
              of Collateral...................................................14
SECTION 4.07. Limitation by Law...............................................14
SECTION 4.08. Absolute Rights of Secured Holders and Representatives..........15

SECTION 5.01. Application of Proceeds.........................................15
SECTION 5.02. Application of Withheld Amounts.................................18
SECTION 5.03. Release of Amounts in Collateral Account........................18
SECTION 5.04. Distribution Date...............................................18

SECTION 6.01. Delivery of Agreements..........................................19
SECTION 6.02. Information as to Representatives...............................19
SECTION 6.03. Compensation and Expenses.......................................20
SECTION 6.04. Stamp and Other Similar Taxes...................................20

SECTION 6.05. Filing Fees, Excise Taxes, Etc..................................20
SECTION 6.06. Indemnification.................................................20
SECTION 6.07. Further Assurances..............................................21

SECTION 7.01. Declaration of Trust............................................22
SECTION 7.02. Exculpatory Provisions..........................................22
SECTION 7.03. Delegation of Duties............................................23
SECTION 7.04. Reliance by Collateral Trustees.................................23
SECTION 7.05. Limitations on Duties of the Trustees...........................24
SECTION 7.06. Moneys to Be Held in Trust......................................25
SECTION 7.07. Resignation and Removal of Collateral Trustees..................25
SECTION 7.08. Status of Successors to Trustee.................................26
SECTION 7.09. Merger of the Corporate Trustee.................................26
SECTION 7.10. Powers of Individual Trustee....................................26
SECTION 7.11. Additional Co-Trustees; Separate Trustees.......................27
SECTION 7.12. Trustees Appointed Attorneys-in-Fact............................28
SECTION 7.13. Ordinary Care...................................................29

SECTION 9.01. Amendments, Supplements and Waivers.............................31
SECTION 9.02. Additional Actions of Representatives...........................32
SECTION 9.03. Notices.........................................................33
SECTION 9.04. Headings........................................................34
SECTION 9.05. Severability....................................................34
SECTION 9.06. Treatment of Payee or Indorsee by Trustees......................34
SECTION 9.07. Dealings with the Grantors......................................34
SECTION 9.08. Claims..........................................................34
SECTION 9.09. Binding Effect..................................................34
SECTION 9.10. Governing Law...................................................34
SECTION 9.11. Effectiveness...................................................35

SECTION 9.12. Reexecution of Agreement........................................35
SECTION 9.13. Effect on Credit Agreements.....................................35
SECTION 9.14. Counterparts....................................................35

Schedule I - Fee Schedule

COLLATERAL TRUST AGREEMENT

COLLATERAL TRUST AGREEMENT, dated December 12, 2002 (as amended, amended and restated, supplemented or otherwise modified from time to time, this "Agreement") by and among The AES Corporation, a Delaware corporation (the "Borrower"), the other Persons listed on the signature pages hereof and the Additional Grantors (the Borrower, the Persons so listed and the Additional Grantors being, collectively, the "Grantors"), Wilmington Trust Company, a Delaware banking corporation, not in its individual capacity but solely as corporate trustee (together with any successor corporate trustee appointed pursuant to Article VII, the "Corporate Trustee"), and Bruce L. Bisson, an individual residing in the State of Delaware, not in his individual capacity but solely as individual trustee (together with any successor individual trustee appointed pursuant to Article VII, the "Individual Trustee"; and, together with the Corporate Trustee, the "Collateral Trustees"), the foregoing trustees being trustees for the Secured Holders. Certain capitalized terms used herein are defined in Article I of this Agreement. Terms defined in the Credit Agreement and the Security Agreement and not otherwise defined in Article I of this Agreement are used in this Agreement as defined in the Credit Agreement and the Security Agreement.

PRELIMINARY STATEMENTS:

(1) The Borrower has entered into an Amended and Restated Credit, Reimbursement and Exchange Agreement dated as of December 12, 2002 (said Agreement, as it may hereafter be amended, amended and restated, supplemented or otherwise modified from time to time, being the "Credit Agreement") with the Subsidiary Guarantors party thereto, the Banks party thereto (the "Banks"), the Revolving Fronting Banks and the Drax LOC Fronting Bank party thereto, and Citicorp USA, Inc., as Administrative Agent for the Bank Parties (in such capacity, the "Agent") and as Collateral Agent for the Bank Parties (in such capacity, the "Credit Agreement Collateral Agent"; and together with the Agent, the "Agents").

(2) In order to induce the Banks, the Revolving Fronting Banks, the Drax LOC Fronting Banks and the Agents to enter into the Credit Agreement, the Grantors have agreed to grant a continuing security interest in and to the Collateral (as hereinafter defined) to the Collateral Trustees for the ratable benefit of the Lender Parties to secure the Obligations of the Borrower under the Credit Agreement and the Notes issued pursuant thereto.

(3) The Borrower will enter into an Indenture to be dated as of December 13, 2002 (as amended, supplemented or otherwise modified and in effect on the date hereof and as the same may hereafter be further amended, modified, extended, renewed, replaced, restated or supplemented from time to time pursuant to the terms thereof, the "Exchange Note Indenture") with Wells Fargo Bank Minnesota, National Association (the "Exchange Note Trustee") to exchange the Borrower's (i) 8.75% Senior Notes due 2002 and (ii) the 7.375% Remarketable or Redeemable Securities due 2013 for the 10% Senior Secured Exchange Notes due 2005 to be issued on December 13, 2002 (the "Exchange Notes", and together with the Exchange Note Indenture (only to the extent relating to the Exchange Notes), the "Exchange Note Agreements").

(4) In order to induce the Exchange Note Trustee to enter into the Exchange Note Indenture, the Grantors have agreed to grant a continuing security interest in and to the

Collateral to the Collateral Trustees for the ratable benefit of the Exchange Note Holders to secure the Obligations of the Borrower under the Exchange Note Agreements.

(5) The Borrower has entered into a Sponsor Agreement dated as of March 7, 2000 (as amended, supplemented or otherwise modified and in effect on the date hereof and as the same may hereafter be further amended, modified, extended, renewed, replaced, restated or supplemented from time to time pursuant to the terms thereof, the "Sponsor Agreement") with BankBoston, N.A., Nassau Branch, as agent (the "Sul Agent"), pursuant to which the Borrower has agreed to guarantee the obligations of AES Cayman Guaiba, Ltd. under a Credit Agreement dated as of March 6, 2001 (as amended, supplemented or otherwise modified and in effect on the date hereof and as the same may hereafter be further amended, modified, extended, renewed, replaced, restated or supplemented from time to time pursuant to the terms thereof, the "Sul Credit Agreement") with BankBoston, N.A., Nassau Branch, Banc of America Securities, LLC, Unibanco-Uniao de Bancos Brasilieros S.A. and WestLB AG, New York Branch and the lenders named therein (collectively, the "Sul Guaranteed Parties"), in an amount of up to a maximum aggregate amount of $50,000,000 (together with any other agreement or instrument delivered in connection with such guaranty, the "Sul Guarantee").

(6) In order to satisfy certain conditions under the Sul Guarantee, the Grantors have agreed to grant a continuing security interest in and to the Collateral to the Collateral Trustees for the ratable benefit of the Sul Guaranteed Parties to secure the Obligations of the Borrower under the Sul Guarantee in an amount of up to a maximum aggregate amount of $50,000,000.

(7) The Borrower has entered into a Gas Transportation Agreement dated as of July 21, 2000 with Florida Public Utilities Company pursuant to which Fleet National Bank (the "Lake Worth LOC Bank") issued in favor of Florida Public Utilities Company irrevocable standby letter of credit number 1S1280134 (together with the application and agreement therefor dated on or about July 6, 2001, the "Lake Worth Letter of Credit") in an aggregate amount not to exceed $5,490,449.

(8) In order to satisfy certain conditions under the Lake Worth Letter of Credit, the Grantors have agreed to grant a continuing security interest in and to the Collateral to the Collateral Trustees for the ratable benefit of the Lake Worth LOC Bank to secure the obligation of Lake Worth Generation LLC ("Lake Worth"), a Subsidiary of the Borrower, to reimburse the Lake Worth LOC Bank for any drawings under the Lake Worth Letter of Credit in an amount of up to a maximum aggregate amount of $5,490,449.

(9) This Agreement and the other Shared Collateral Documents are intended to secure the other Secured Agreements and the Collateral Trustees have agreed to undertake the rights, powers, duties and responsibilities set forth in this Agreement and the other Shared Collateral Documents in order to effect such purpose.

NOW, THEREFORE, in consideration of the premises and in order to (1) induce (a) the Banks to continue the Loans and the Revolving Credit Loan Banks to make Revolving Credit Loans, (b) the Revolving Fronting Banks to issue (or be deemed to have issued) Revolving Letters of Credit, (c) the Drax LOC Fronting Bank to be deemed to have issued the

Drax Letter of Credit and to make Drax Loans in respect of Drax L/C Drawings,
(d) the Hedge Banks to enter into Secured Hedge Agreements from time to time,
(e) the entry into the Secured Treasury Management Service Agreements by a Bank Party or an Affiliate thereof and (f) the Exchange Note Trustee to enter into the Exchange Note Indenture and (2) satisfy certain conditions under the Sul Guarantee and the Lake Worth Letter of Credit, each Grantor hereby agrees with the Collateral Trustees for their benefit and in trust for the ratable benefit of the Representatives and the Secured Holders (as each term is hereinafter defined) as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Certain Defined Terms. The following terms shall have the following meanings as used herein (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

"Additional Collateral Trust Agreement Collateral" has the meaning specified in Section 2.01.

"Applicable Agreement" means the Credit Agreement Documents, the Shared Collateral Documents, the Exchange Note Agreements, the Sul Guarantee, the Lake Worth Letter of Credit and the Other Debt Agreements.

"Authorized Officer" means the Chairman, the President, the Chief Executive Officer, the Chief Financial Officer, the Comptroller, any Vice President, the Secretary, Assistant Secretary, Treasurer or the Assistant Treasurer of a Person or any other officer designated as an "Authorized Officer" by the Board of Directors (or equivalent governing body) of such Person.

"Bankruptcy Code" means Title 11 of the United States Code entitled "Bankruptcy", as amended from time to time.

"Banks" has the meaning specified in the Preliminary Statements to this Agreement.

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

"Business Day" means a day of the year on which banks are not required or authorized by law to close in New York City or the city in which the Corporate Trustee maintains its corporate trust office.

"BVI Cayman Pledge Agreement" means the Charge and Assignment of Shares (as such agreement may hereafter be amended, amended and restated, supplemented or otherwise modified from time to time) dated December 12, 2002 between AES International Holdings II, Ltd. and the Collateral Trustees.

"Cash Equivalents" means any of the following, to the extent owned by the Borrower or any of its Subsidiaries free and clear of all Liens other than Liens created under the

Shared Collateral Documents and having a maturity of not greater than 360 days from the date of issuance thereof: (a) readily marketable direct obligations of the Government of the United States or any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of the Government of the United States, (b) insured certificates of deposit of or time deposits with any commercial bank that is a Lender Party or a member of the Federal Reserve System, issues (or the parent of which issues) commercial paper rated as described in clause (c) below, is organized under the laws of the United States or any State thereof and has combined capital and surplus of at least $1 billion or (c) commercial paper in an aggregate amount of no more than $5,000,000 per issuer outstanding at any time, issued by any corporation organized under the laws of any State of the United States and rated at least "Prime-1" (or the then equivalent grade) by Moody's Investors Service, Inc. or "A-1" (or the then equivalent grade) by Standard & Poor's, a division of The McGraw-Hill Companies, Inc. The term "Cash Equivalents" shall include any mutual fund sponsored or managed by an Affiliate of the Corporate Trustee which mutual fund's assets consist of "Cash Equivalents" as defined herein.

"Collateral" means the Creditor Group Collateral, as such term is defined in the Credit Agreement.

"Collateral Account" has the meaning specified in Section 3.01.

"Collateral Trustees" has the meaning specified in the recital of parties to this Agreement.

"Collateral Trustees' Fees" means the fees and other amounts payable to the Collateral Trustees pursuant to Sections 6.03, 6.04 and 6.05 and amounts claimed and unpaid pursuant to Section 6.06.

"Collateral Trust Agreement Default" means (i) so long as any Secured Obligation remains outstanding with respect to any Lender Party under the Credit Agreement or any Revolving Credit Loan Bank has a Revolving Credit Loan Commitment or any Revolving Letter of Credit or Drax Letter of Credit remains outstanding, (A) in respect of the exercise of remedies with respect to the Account Collateral, the Additional Collateral Trust Agreement Collateral and the Securities Accounts (and all Collateral from time to time credited to the Deposit Accounts and the Securities Accounts) or the exercise of remedies under
Section 15 of the Security Agreement or Section 11 of the BVI Cayman Pledge Agreement, an Event of Default described in clauses (a), (e), (f), (g) and (h) of Section 6.01 of the Credit Agreement and (B) in respect of any other exercise of rights and remedies under the Shared Collateral Documents, any Event of Default, in each case, shall have occurred and be continuing under the Credit Agreement, and as a result thereof, the Credit Agreement Defaulted Party has the right to declare all of the Secured Obligations of the Loan Parties under the Credit Agreement to be due and payable prior to the stated maturity thereof and (ii) at any time that no Secured Obligations remain outstanding with respect to any Lender Party under the Credit Agreement and no Revolving Credit Loan Bank has a Revolving Credit Loan Commitment and no Revolving Letter of Credit or Drax Letter of Credit remains outstanding, (A) in respect of the exercise of remedies with respect to the Account Collateral, the Additional Collateral Trust Agreement Collateral and the Securities Accounts (and all Collateral from time to time credited to the Deposit Accounts and the Securities Accounts) or the exercise of remedies under Section 15 of the Security

Agreement or Section 11 of the BVI Cayman Pledge Agreement, events of default under the Exchange Note Agreements, the Sul Credit Agreement, the Lake Worth Letter of Credit or any of the Other Debt Agreements of the type described in clauses (a), (e), (f), (g) and (h) of Section 6.01 of the Credit Agreement and (B) in respect of any other exercise of rights and remedies under the Shared Collateral Documents, any event of default, in each case, shall have occurred and be continuing under the Exchange Note Agreements, the Sul Credit Agreement, the Lake Worth Letter of Credit or any of the Other Debt Agreements, and as a result thereof, the Other Debt Defaulted Party has the right to declare all of the Secured Obligations of the Borrower under the Exchange Note Agreements, the Sul Credit Agreement, the Lake Worth Letter of Credit or the Other Debt Agreements to be due and payable prior to the stated maturity thereof.

"Collateral Trust Agreement Default Notice" means a written notice delivered in connection with a Collateral Trust Agreement Default.

"Collateral Trust Estate" means all of the right, title and interest of the Collateral Trustees, whether now owned or hereafter acquired, in and to the Collateral.

"Corporate Trustee" has the meaning specified in the recital of parties to this Agreement.

"Credit Agreement" has the meaning specified in the Preliminary Statements.

"Credit Agreement Collateral Agent" has the meaning specified in the Preliminary Statements to this Agreement.

"Credit Agreement Defaulted Party" means the Agent or the percentage of the Banks specified in the Credit Agreement that have the right thereunder upon the occurrence and continuance of an Event of Default under the Credit Agreement (without the requirement that any further time elapse) to declare all of the Secured Obligations of the Loan Parties under the Credit Agreement to be due and payable prior to the stated maturity thereof.

"Credit Agreement Documents" means (i) the Credit Agreement, (ii) the Notes, (iii) the Secured Hedge Agreements and (iv) the Secured Treasury Management Service Agreements, in each case as amended from time to time.

"Defaulted Agreement Party" means the Credit Agreement Defaulted Party or the Other Debt Defaulted Party, as applicable.

"Distribution Date" means any date on which the Collateral Trustees shall distribute moneys from the Collateral Account pursuant to Section 5.01.

"Exchange Note Agreements" has the meaning specified in the Preliminary Statements to this Agreement.

"Exchange Note Holders" means at any time the registered holders of the Exchange Notes issued under the Exchange Note Indenture.

"Exchange Note Indenture" has the meaning specified in the Preliminary Statements to this Agreement.

"Exchange Notes" has the meaning specified in the Preliminary Statements to this Agreement.

"Exchange Note Trustee" has the meaning specified in the Preliminary Statements to this Agreement.

"Grantors" has the meaning specified in the recitals of parties to this Agreement.

"Indemnified Event" has the meaning specified in the Section 7.05(e) of this Agreement.

"Individual Trustee" has the meaning specified in the recital of parties to this Agreement.

"Lake Worth" has the meaning specified in the Preliminary Statements to this Agreement.

"Lake Worth Letter of Credit" has the meaning specified in the Preliminary Statements to this Agreement.

"Lake Worth LOC Bank" has the meaning specified in the Preliminary Statements to this Agreement.

"Lender Parties" means the Agent, the Banks, the Revolving Fronting Banks, the Drax LOC Fronting Banks, the Hedge Banks and the Credit Agreement Collateral Agent.

"Moody's" means Moody's Investor's Service, Inc.

"Payment Information" has the meaning specified in Section 6.02(a) of this Agreement.

"Other Debt" means Debt issued pursuant to any Other Debt Agreement.

"Other Debt Agreement" means any other agreement or instrument pursuant to which the Borrower has incurred Debt permitted by Sections 5.07(a)(iii); 5.07(a)(x) and 5.07(a)(xi) of the Credit Agreement.

"Other Debt Defaulted Party" means the Other Debt Representatives, acting collectively on behalf of the Required Other Debt Holders.

"Other Debt Holders" means at any time the registered holders of Other Debt issued under any Other Debt Agreement.

"Other Debt Representatives" means the representatives of the Required Other Debt Holders, and may include, as the case may be, the Exchange Note Trustee, the Sul Agent,

the Lake Worth LOC Bank or the representative of the Other Debt Holders under any Other Debt Agreement.

"Remedies Limitations" has the meaning set forth in Section 7(i) of the Security Agreement.

"Representatives" means at any time, collectively, (a) the Agent, as the representative hereunder for the Lender Parties at such time, (b) the Exchange Note Trustee, as the representative hereunder for the Exchange Note Holders,
(c) the Sul Agent, as the representative hereunder for the Sul Guaranteed Parties, (d) the Lake Worth LOC Bank on behalf of itself and (e) the representatives hereunder for the Other Debt Holders at such time.

"Required Exchange Note Holder Approval" means the Collateral Trustees shall have received a certificate from the Exchange Note Trustee that it has received the consent of those Exchange Note Holders holding a majority of the principal outstanding amount of the Exchange Notes for such amendment, waiver or consent.

"Required Other Debt Holders" means Secured Holders that own or hold (either by themselves or through their respective Secured Holders) more than 50% of the aggregate amount of the outstanding Debt under the Exchange Note Agreements, the Sul Guarantee, the Lake Worth Letter of Credit and the Other Debt Agreements at any given time.

"Required Representative(s)" means (a) at any time that no Collateral Trust Agreement Default has occurred or is continuing and any Secured Obligations remain outstanding with respect to any Lender Party under the Credit Agreement or any Revolving Credit Loan Bank has a Revolving Credit Loan Commitment or any Revolving Letter of Credit or Drax Letter of Credit remains outstanding, the Agent acting in its own discretion or at the direction of the Required Banks at such time, (b) at any time that no Collateral Trust Agreement Default has occurred or is continuing, and no Secured Obligations remain outstanding with respect to any Lender Party under the Credit Agreement and no Revolving Credit Loan Bank has a Revolving Credit Loan Commitment and no Revolving Letter of Credit or Drax Letter of Credit remains outstanding, the Other Debt Representatives acting at the direction of the Required Other Debt Holders, (c) at any time that a Collateral Trust Agreement Default has occurred and is continuing and any Secured Obligations remain outstanding with respect to any Lender Party under any Credit Agreement or any Revolving Credit Loan Bank has a Revolving Credit Loan Commitment or any Revolving Letter of Credit or Drax Letter of Credit remains outstanding, the Agent, on behalf of itself and the Required Banks or (d) at any time that a Collateral Trust Agreement Default has occurred and is continuing and no Secured Obligations remain outstanding with respect to any Lender Party under the Credit Agreement and no Revolving Credit Loan Bank has a Revolving Credit Loan Commitment and no Revolving Letter of Credit or Drax Letter of Credit remains outstanding, the Other Debt Representatives, on behalf of the Required Other Debt Holders; provided, however, that amounts held at such time by the Collateral Trustees on behalf of a Representative and such Representative's Secured Holders in an account of the Corporate Trustee established at the request of such Representative pursuant to Section 5.02 hereof shall be deemed to have been applied to repay the Secured Obligations of such Secured Holders whether or not such amount has been so applied. Unless and until the Collateral Trustees shall have received a notice from the Agent to the effect that at no Secured

Obligations remain outstanding with respect to any Lender Party under the Credit Agreement and no Revolving Credit Loan Bank has a Revolving Credit Loan Commitment and no Revolving Letter of Credit or Drax Letter of Credit remains outstanding, the Collateral Trustees may assume that the Agent is the Required Representative. After receipt of such notice, the Collateral Trustees may assume that the Other Debt Representatives are the Required Representative(s).

"Secured Agreements" means, collectively, the Credit Agreement Documents, the Exchange Note Agreements, the Sul Guarantee, the Lake Worth Letter of Credit, the Other Debt Agreements and each agreement or instrument delivered by the Grantors pursuant thereto (including, without limitation, the Shared Collateral Documents).

"Secured Holders" means, at any time, the Lender Parties, the Exchange Note Holders, the Sul Guaranteed Parties, the Lake Worth LOC Bank and Other Debt Holders.

"Secured Obligations" means at any time any obligations, whether matured or unmatured, contingent or liquidated, of each Grantor arising out of or evidenced by the Secured Agreements, whether for principal, interest, expenses, premiums, indemnities, fees or other amounts, whether or not such obligations are due and payable at such time; provided, however, that (i) Obligations under the Secured Hedge Agreements, excluding the Banc of America Secured Option, shall only be secured up to an amount not to exceed $50,000,000 in the aggregate, (ii) Obligations under the Sul Guarantee shall only be secured up to an amount not to exceed $50,000,000 and (iii) Obligations under the Lake Worth Letter of Credit shall only be secured up to an amount not to exceed $5,490,449.

"Shared Collateral Documents" means this Agreement, the Security Agreement, the BVI Cayman Pledge Agreement and each Successor Collateral Agreement.

"S&P" means Standard & Poors, a division of The McGraw-Hill Companies, Inc.

"Successor Collateral" means, with respect to each Grantor, any property and assets of such Grantor (or any of its successors and assigns) as such Grantor (or any such successor or any such assign) may, from time to time, upon notice to the Collateral Trustees, pursuant to the Credit Agreement Documents, the Exchange Note Agreements, the Sul Guarantee, the Lake Worth Letter of Credit and the Other Debt Agreements or otherwise, grant to the Collateral Trustees as additional collateral for their benefit and in trust for the equal and ratable benefit of the Representatives, on their behalf and on behalf of the Secured Holders.

"Successor Collateral Agreements" means all documents creating, evidencing or relating to any of the Successor Collateral.

"Sul Agent" has the meaning specified in the Preliminary Statements to this Agreement.

"Sul Credit Agreement" has the meaning specified in the Preliminary Statements to this Agreement.

"Sul Guarantee" has the meaning specified in the Preliminary Statements to this Agreement.

"Sul Guaranteed Parties" has the meaning specified in the Preliminary Statements to this Agreement.

SECTION 1.02. Certain References. In this Agreement, the words "hereof," "herein" and "hereunder", and words of similar import, shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All section, schedule and exhibit references set forth in this Agreement are, unless otherwise specified, references to such section in, or schedule or exhibit to, this Agreement.

ARTICLE II

CONFIRMATION AND CREATION OF SECURITY INTERESTS

SECTION 2.01. Collateral Trust Estate. Each Grantor hereby confirms that, pursuant to the terms of the Security Agreement and the BVI Cayman Pledge Agreement, such Grantor has pledged and assigned to the Collateral Trustees for their benefit and in trust for the equal and ratable benefit of the Representatives and the Secured Holders, and has granted the Collateral Trustees for their benefit and in trust for the equal and ratable benefit of the Representatives and the Secured Holders, a lien on, and security interest in, the Collateral described therein of such Grantor in order to secure the Secured Obligations. The Borrower, in order to secure the Secured Obligations, hereby further pledges and assigns to the Collateral Trustees for their benefit and in trust for the equal and ratable benefit of the Representatives, on their behalf and on behalf of the Secured Holders, and hereby grants to the Collateral Trustees for their benefit and in trust for the equal and ratable benefit of the Representatives, on their behalf and on behalf of the Secured Holders, a lien on, and security interest in, the following (collectively, together with any Successor Collateral, the "Additional Collateral Trust Agreement Collateral"):

(i) the Collateral Account established pursuant to Section 3.01(a) with the Corporate Trustee at its offices at its corporate trust department in the State of Delaware and is, and shall at all times remain, under the sole dominion and control of the Corporate Trustee, all funds held therein and all certificates and instruments, if any, from time to time representing each Collateral Account;

(ii) all Cash Equivalents held in the Collateral Account from time to time and all certificates and instruments, if any, from time to time representing or evidencing such Cash Equivalents;

(iii) all notes, certificates of deposit, deposit accounts, checks and other instruments from time to time delivered to or otherwise possessed by the Collateral Trustees for or on behalf of the Borrower in substitution for or in addition to any or all of the then existing Additional Collateral Trust Agreement Collateral;

(iv) all interest, income, dividends, instruments and other property and assets from time to time received, receivable or otherwise distributed in respect of or in

exchange for any or all of the then existing Additional Collateral Trust Agreement Collateral referred to in clauses (i) through (iii) of this
Section 2.01(a); and

(v) all proceeds of any and all of the foregoing Additional Collateral Trust Agreement Collateral (including, without limitation, proceeds that constitute property and assets of the types described in clauses (i) through (iv) of this Section 2.01(a)) and, to the extent not otherwise included, all (A) payments under any indemnity, warranty or guaranty payable with respect to any of the foregoing Additional Collateral Trust Agreement Collateral and (B) cash.

SECTION 2.02. Security for Secured Obligations. All of the right, title and interest of the Collateral Trustees in and to the Collateral Trust Estate secures the payment of all of the Secured Obligations now or hereafter existing under or in respect of the Secured Agreements and the performance of, and the compliance with, all of the covenants and conditions of this Agreement, the other Shared Collateral Documents and the other Secured Agreements. Without limiting the generality of the foregoing, the Collateral Trust Estate secures the payment of all amounts that constitute part of the Secured Obligations and would be owed by each Grantor to the Collateral Trustees, any Representative or any Secured Holder under the Shared Collateral Documents or the other Secured Agreements but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving such Grantor.

ARTICLE III

COLLATERAL ACCOUNT

SECTION 3.01. Collateral Account. (a) Until the date that the Collateral Trustees release all of the Collateral pursuant to Section 8.02(a), a non-interest bearing cash collateral account (the "Collateral Account") for the Representatives and the Secured Holders shall be maintained by the Corporate Trustee at its offices at its corporate trust department in the State of Delaware in accordance with the terms of this Agreement. All moneys that are received by the Collateral Trustees, upon the occurrence and during the continuance of a Collateral Trust Agreement Default, or upon liquidation or otherwise in respect of the Collateral shall be deposited in the Collateral Account and, thereafter, shall be held and applied by the Corporate Trustee all in accordance with the terms of this Agreement.

(b) The Corporate Trustee shall, subject to the provisions of Article IV and Article VIII, from time to time (i) invest amounts on deposit in the Collateral Account in Cash Equivalents and (ii) invest interest paid on such Cash Equivalents, and reinvest other proceeds of any such Cash Equivalents that may mature or be sold, in additional Cash Equivalents, in each case at the direction of the Grantors so long as no Collateral Trust Agreement Default shall have occurred and be continuing and at the direction of the Required Representative(s) if a Collateral Trust Agreement Default shall have occurred and be continuing. Interest and proceeds that are not invested or reinvested in Cash Equivalents as provided in the immediately preceding sentence shall be deposited and held in the Collateral Account. Notwithstanding the foregoing, the Corporate Trustee shall, to the extent possible, invest any funds to be distributed on a Distribution Date in Cash Equivalents that shall mature or become liquid on or prior to such

Distribution Date. All Cash Equivalents made in respect of the Collateral Account and all interest and income received thereon and therefrom and the net proceeds realized on the maturity or sale thereof shall be held in the Collateral Account as part of the Collateral Trust Estate pursuant to the terms hereof.

(c) The Collateral Account shall be subject to such applicable laws, and such applicable regulations of the Board of Governors of the Federal Reserve System and of any other appropriate banking or regulatory authority, as are in effect from time to time.

(d) All dividends, interest and other distributions deposited into the Collateral Account pursuant to Section 10(b) of this Agreement or Section 6.2 of the BVI Cayman Pledge Agreement shall be released and returned to the applicable Grantor upon notice to the Collateral Trustees from the Required Representative(s) that the Collateral Trust Agreement Default giving rise to such deposit has been cured or waived; provided, that no Collateral Trust Agreement Default shall have occurred and be continuing at such time.

ARTICLE IV

COLLATERAL TRUST AGREEMENT DEFAULTS; REMEDIES

SECTION 4.01. Collateral Trust Agreement Default Notice. (a) (x) So long as any Secured Obligations remain outstanding with respect to any Lender Party under the Credit Agreement or any Revolving Credit Loan Bank has a Revolving Credit Loan Commitment or any Revolving Letter of Credit or Drax Letter of Credit remains outstanding, the Credit Agreement Defaulted Party shall have the exclusive right if a Collateral Trust Agreement Default under the Credit Agreement shall have occurred and be continuing to give the Collateral Trustees a Collateral Trust Agreement Default Notice and (y) at any time that no Secured Obligations remain outstanding with respect to any Lender Party under the Credit Agreement and no Revolving Credit Loan Bank has a Revolving Credit Loan Commitment and no Revolving Letter of Credit or Drax Letter of Credit remains outstanding, the Other Debt Defaulted Party shall have the exclusive right if a Collateral Trust Agreement Default shall have occurred and be continuing under the Other Debt Agreements, to give the Collateral Trustees a Collateral Trust Agreement Default Notice, and if a Credit Agreement Defaulted Party or an Other Debt Defaulted Party, as the case may be, gives the Collateral Trustees, with a copy to the Grantors, a Collateral Trust Agreement Default Notice, stating:

(i) the nature of the Collateral Trust Agreement Default; and

(ii) the action requested to be taken by the Collateral Trustees with respect to the Collateral and the Shared Collateral Documents (which action may include, without limitation, the institution of any remedies provided by law or this Agreement or any other Shared Collateral Document),

then the Collateral Trustees shall forthwith send a copy of the Collateral Trust Agreement Default Notice to each Representative. The Required Representative(s) shall provide the Collateral Trustees with a certificate that shall state whether or not they favor the Collateral Trustees taking such action. If the Required Representative(s) shall not have provided the Collateral Trustees with such certificate within 30 Business Days of receipt of the copy of the

Collateral Trust Agreement Default Notice, the Required Representative(s) shall be deemed to have not favored the taking of such action. If the Required Representative(s) shall have directed the Collateral Trustees to commence the action set forth in the Collateral Trust Agreement Default Notice then, subject to Section 4.01(b) and the right of the Collateral Trustees to commence such action under the Shared Collateral Documents, the Collateral Trustees shall forthwith undertake such action. The Collateral Trustees shall, subject to Sections 4.01(b), 4.08 and 6.06, follow the directions of the Required Representative(s) with respect to the time, method and place of taking any action requested in a Collateral Trust Agreement Default Notice. Each Collateral Trustee shall be entitled to assume conclusively that no Collateral Trust Agreement Default has occurred and is continuing until it receives a Collateral Trust Agreement Default Notice. For the avoidance of doubt, unless and until the Collateral Trustees shall have received a notice from the Agent to the effect that no Secured Obligations remain outstanding with respect to any Lender Party under the Credit Agreement and no Revolving Credit Loan Bank has a Revolving Credit Loan Commitment and no Revolving Letter of Credit or Drax Letter of Credit remains outstanding, the Collateral Trustees may presume that the Credit Agreement Defaulted Party has the exclusive right to deliver a Collateral Trust Agreement Default Notice. After receipt of such notice, the Collateral Trustees may presume that the Other Debt Defaulted Party has the exclusive right to deliver a Collateral Trust Agreement Default Notice.

(b) If the Collateral Trust Agreement Default, which was the basis for the giving of a Collateral Trust Agreement Default Notice, shall be cured or waived in accordance with the terms of the applicable Secured Agreement, the Defaulted Agreement Party which gave such Collateral Trust Agreement Default Notice shall promptly notify the Collateral Trustees in writing of such cure or waiver, upon receipt of such written notice of a cure or waiver (i) such Collateral Trust Agreement Default Notice shall be deemed withdrawn and (ii) any direction to the Collateral Trustees to take any action in connection with such Collateral Trust Agreement Default Notice shall be deemed immediately rescinded. If in connection solely with such withdrawn Collateral Trust Agreement Default Notice the Collateral Trustees shall have been directed to take, and shall have commenced taking but shall not have completed, any action, the Collateral Trustees shall promptly terminate any such action which they shall not also have been directed to take in connection with a Collateral Trust Agreement Default Notice other than that withdrawn.

(c) Anything contained herein or under any Shared Collateral Agreement to the contrary notwithstanding, upon the occurrence and continuance of a Collateral Trust Agreement Default under the Credit Agreement, the Collateral Trustees shall forebear from exercising any of their rights and remedies hereunder or under any Shared Collateral Document with respect to the Equity Interests of AES EDC Funding II L.L.C. pledged as Collateral under the Security Agreement until the date that occurs 45 days following the date of delivery of a Collateral Trust Agreement Default Notice by a Credit Agreement Defaulted Party; provided that such date shall be extended so long as the collateral agent under the Tranche C Pledge Agreement is actively pursuing its rights and remedies with respect to the Tranche C Collateral under the Tranche C Pledge Agreement and the Collateral Trustees have received evidence satisfactory to them of such pursuit; provided, however, that nothing in this Section 4.01(c) shall prevent the Collateral Trustees from immediately exercising their rights and remedies with

respect to all other Collateral as provided for in this Agreement and the other Shared Collateral Documents.

SECTION 4.02. Direction by Required Representative(s). As to any matters not expressly provided for under this Agreement or the other Shared Collateral Documents (including, without limitation, matters relating to enforcement and collection of the Secured Obligations), the Collateral Trustees shall not be required to exercise any discretion or to take any action under this Agreement or the other Shared Collateral Documents, or in respect of the Collateral, but shall be required to act or to refrain from acting (and shall be fully protected in acting or refraining from acting) in accordance with the written instructions of the Required Representative(s) which instructions shall reference Section 6.06 hereof.

SECTION 4.03. Right to Initiate Judicial Proceedings, Etc. (a) Notwithstanding any other provision of this Agreement, upon the occurrence of and during the continuance of any Collateral Trust Agreement Default and the receipt by the Collateral Trustees of a Collateral Trust Agreement Default Notice that has not been withdrawn pursuant to Section 4.01(b) above, the Corporate Trustee, and if the Corporate Trustee deems necessary or desirable, the Individual Trustee, jointly or individually as the Corporate Trustee may determine, (i) shall have the right and power to institute and maintain such suits and proceedings as it or they, as the case may be, or the Required Representative(s) may deem appropriate to protect and enforce the rights vested in it by this Agreement and the other Shared Collateral Documents and (ii) may either, after entry or without entry, proceed by suit or suits at law or in equity to enforce such rights and to foreclose upon the Collateral and to dispose of, collect or otherwise realize upon, all or any portion of the Collateral Trust Estate under the judgment or decree of a court of competent jurisdiction.

(b) If a receiver of the Collateral Trust Estate shall be appointed in judicial proceedings, the Collateral Trustees may be appointed, at its discretion, as such receiver. Notwithstanding the appointment of a receiver, the Collateral Trustees shall be entitled to retain possession and control of all cash held by or deposited with them or their agents or co-trustees pursuant to any provision of this Agreement or any other Shared Collateral Document.

SECTION 4.04. Remedies Not Exclusive. (a) No remedy conferred upon or reserved to the Collateral Trustees herein or in the other Shared Collateral Documents is intended to be a limitation exclusive of any other remedy or remedies, but every such remedy shall be cumulative and shall be in addition to every other remedy conferred herein or in the other Shared Collateral Documents or now or hereafter existing at law or in equity or by statute.

(b) No delay or omission of either of the Collateral Trustees to exercise any right, remedy or power accruing upon any Collateral Trust Agreement Default shall impair any such right, remedy or power or shall be construed to be a waiver of any such Collateral Trust Agreement Default or any acquiescence therein; and every right, power and remedy given by this Agreement or any other Shared Collateral Document to the Collateral Trustees may be exercised from time to time and as often as may be deemed expedient by the Collateral Trustees.

(c) In case either of the Collateral Trustees shall have proceeded to enforce any right, remedy or power under this Agreement or any other Shared Collateral Document and

the proceeding for the enforcement thereof shall have been discontinued or abandoned for any reason or shall have been determined adversely to such Collateral Trustee, then and in every such case the Grantors, the Collateral Trustees, the Representatives and Secured Holders shall, subject to any determination in such proceeding, severally be restored to their former positions and rights hereunder and under such other Shared Collateral Document with respect to the Collateral Trust Estate, the Collateral Account and in all other respects, and thereafter all rights, remedies and powers of such Collateral Trustee shall continue as though no such proceeding had been taken.

(d) Each Grantor expressly agrees that all rights of action and rights to assert claims upon or under this Agreement and the other Shared Collateral Documents may be enforced by the Collateral Trustees without the possession of any debt instrument or the production thereof in any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Collateral Trustees shall be brought in either of their names as Collateral Trustee and any recovery of judgment shall be held as part of the Collateral Trust Estate; provided that nothing in this Section 4.04(d) shall constitute a waiver of any right that the Grantors may have or may hereafter acquire to challenge the amounts outstanding under the Secured Agreements.

SECTION 4.05. Waiver of Certain Rights. Subject to the Remedies Limitations, each Grantor, on behalf of itself and all who may claim through or under it, including, without limitation, any and all subsequent Affiliates, creditors, vendees, assignees and lienors, expressly waives and releases, to the fullest extent permitted by law, any, every and all rights to demand or to have any marshalling of the Collateral Trust Estate upon any enforcement of any Shared Collateral Document, including, without limitation, upon any sale, whether made under any power of sale herein granted or pursuant to judicial proceedings or upon any foreclosure or any enforcement of any Shared Collateral Document and consents and agrees that all the Collateral Trust Estate and any such sale may be offered and sold as an entirety.

SECTION 4.06. Limitation on Collateral Trustees' Duties in Respect of Collateral. Beyond the duties set forth in this Agreement, the Collateral Trustees shall not have any duty to the Grantors or the Representatives as to any Collateral in the Collateral Trustees' possession or control or in the possession or control of any agent or nominee of the Collateral Trustees or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto, except that each Collateral Trustee shall be liable for its failure to exercise ordinary care in the handling of moneys and securities and other property actually received by it.

SECTION 4.07. Limitation by Law. All rights, remedies and powers provided by this Article IV may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Article IV are intended to be subject to all applicable mandatory provisions of law which may be controlling and to be limited to the extent necessary so that they will not render this Agreement invalid, unenforceable in whole or in part or, if the Representatives elect that this Agreement should be recorded, registered or filed, not entitled to be recorded, registered, or filed under the provisions of any applicable law.

SECTION 4.08. Absolute Rights of Secured Holders and Representatives. Notwithstanding any other provision of this Agreement or any of the other Shared Collateral Documents, each of the Representatives and each of the Secured Holders has an absolute and unconditional right to receive payment of all of the Secured Obligations owing to such Representative or such Secured Holder, as the case may be, when the same becomes due and payable and at the time and place and otherwise in the manner set forth in the applicable Secured Agreement, and the right of each such Representative and each such Secured Holder to institute proceedings for the enforcement of such payment on or after the date such payment becomes due and to assert its position as a secured creditor in a proceeding under the Bankruptcy Code in which any Grantor is a debtor, and the obligation of such Grantor to pay all of the Secured Obligations owing to each of the Representatives and each of the Secured Holders at the time and place expressed therein, shall not be impaired or affected without the consent of such Representative or such Secured Holder. In addition, the right of any Secured Holder or any Representative, on behalf of itself or on behalf of any such Secured Holder, to receive payment or security from sources other than the Collateral shall not be, and is not hereby, impaired or affected in any manner. Without limiting the generality of the foregoing provisions of this Section 4.08, no Representative and no Secured Holder, on behalf of itself or on behalf of any Secured Holder, shall be obligated to share with any other Representative or any other Secured Holder any proceeds of any collateral, guaranty or right of setoff other than pursuant to, and to the extent expressly required under, this Agreement and the other Secured Agreements; nor shall any Representative's or any Secured Holder's right to receive its ratable share of any amounts maintained in the Collateral Account, if any, or any proceeds of any of the Collateral, or any part thereof, under the terms of this Agreement and the other Shared Collateral Documents be diminished or affected in any way by its right to receive proceeds of any other collateral or right of setoff, or payment upon a guaranty or from any other source.

ARTICLE V

APPLICATION OF PROCEEDS

SECTION 5.01. Application of Proceeds. (a) If, pursuant to the exercise by the Defaulted Agreement Party of any rights and remedies set forth in any Shared Collateral Document, any Collateral is sold or otherwise realized upon by the Collateral Trustees, the proceeds received by the Collateral Trustees in respect of such Collateral shall be deposited in the Collateral Account, and all moneys held by the Corporate Trustee in the Collateral Account, including the Excess Revolving Letter of Credit Collateral and the Excess Drax LOC Collateral, shall, to the extent available for distribution, be distributed by the Corporate Trustee on each date upon which a distribution is made (each, a "Distribution Date") as follows:

FIRST, to the payment (in such priority as the Corporate Trustee shall elect, but without duplication) of all reasonable legal fees and expenses and other reasonable costs or expenses or other liabilities of any kind incurred by the Collateral Trustees as secured parties under any Shared Collateral Document or otherwise in connection with any Shared Collateral Document or this Agreement (including, without limitation, any reasonable costs or expenses or liabilities incurred in connection with the sale of any assets covered by any Shared Collateral Document, or in the operation or maintenance of any of the assets covered by any Shared Collateral Document), including the

reimbursement to any Representative of any amounts theretofore advanced by such Representative for the payment of such fees, costs and expenses, except only for any such fees, expenses, costs or liabilities incurred by any Collateral Trustee as a result of its gross negligence or willful misconduct in performing or failing to perform any of its duties to the parties hereto expressly set forth herein; provided, however, that nothing herein is intended to relieve the Grantors of their duties to pay such costs, fees, expenses and liabilities otherwise payable to the Collateral Trustees from funds outside of the Collateral Account, as required by this Agreement;

SECOND, to the Collateral Trustees (without duplication) in an amount equal to the Collateral Trustees' Fees which are unpaid as of the Distribution Date and to any Representative which has theretofore advanced or paid any such Collateral Trustees' Fees in an amount equal to the amount thereof so advanced or paid by such Representative prior to such Distribution Date; provided, however, that nothing herein is intended to relieve the Grantors of their duties to pay such fees and claims from funds outside of the Collateral Account, as required by this Agreement;

THIRD, in accordance with paragraph (b) below, with respect to any proceeds, ratably to the Representatives on behalf of the respective Secured Holders for application to the Secured Obligations of such Secured Holders, or, to be held by such Representative (or by the Corporate Trustee on behalf of such Representative pursuant to Section 5.02 or otherwise) pending such application, until all such Secured Obligations have been paid in full; and

FOURTH, any surplus remaining after the payment in full in cash of the Secured Obligations shall, pursuant to the provisions of Section 8.02, be paid to the applicable Grantor, its successors or assigns, or to whomsoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may direct.

(b) In order to determine the ratable amount to be distributed to each of the Representatives pursuant to clause THIRD above on each Distribution Date, unless otherwise directed in writing by the Required Representative(s), the Corporate Trustee may rely on a certificate of an Authorized Officer of the Borrower setting forth the Secured Obligations (identified by type and amount) outstanding under each Secured Agreement (or with respect to the Sul Guarantee and the Lake Worth Letter of Credit, whether contingent or outstanding Secured Obligations under such Secured Agreements) on such Distribution Date. The ratable portion of the aggregate amount available for distribution hereunder on any Distribution Date which shall be distributed to each Representative on such Distribution Date shall be a fraction, (x) the numerator of which shall be the aggregate amount of Secured Obligations of the Secured Holders represented by such Representative on such Distribution Date and (y) the denominator of which shall be the aggregate amount of Secured Obligations of all the Secured Holders represented by the Representatives on such Distribution Date; provided, however, that, for such purposes, amounts distributable to a Representative on a prior Distribution Date and held on behalf of such Representative and the Secured Holders of such Representative pursuant to Section 5.02 of this Agreement shall be deemed to have been applied to the Secured Obligations of the Secured Holders represented by such Representative, regardless of whether such application has occurred.

(c) Any amounts to be paid to the Representative of the Lender Parties pursuant to clause THIRD above shall be applied by the Collateral Trustees for the ratable benefit of the Lender Parties against the Secured Obligations of the Secured Holders represented by the Agent under the Credit Agreement as follows:

FIRST, paid to the Agents for any amounts then owing to the Agents pursuant to Section 10.03 of the Credit Agreement or otherwise under the Financing Documents, ratably in accordance with the respective amounts then owing to the Agents; and

SECOND, ratably (A) paid to the Bank Parties (or any of their Affiliates) and the Hedge Banks, respectively, for any amounts then owing to them, in their capacities as such, under the Credit Agreement, the Secured Treasury Management Service Agreements, and the Secured Hedge Agreements, respectively, ratably in accordance with such respective amounts then owing to such Bank Parties and the Hedge Banks, provided that, for purposes of this Section 5.01(c), (x) the amount owing to any such Hedge Bank pursuant to any Secured Hedge Agreement to which it is a party (other than any amount therefore accrued and unpaid) shall be deemed to be equal to the "mark to market" value of such Secured Hedge Agreement at such time and (y) the amounts ratably paid to the Hedge Banks, collectively, for any amounts owing to them under any Secured Hedge Agreement (other than the Banc of America Secured Option) shall not exceed $50,000,000 in the aggregate and (B) deposited as Revolving L/C Collateral in the Revolving L/C Cash Collateral Account up to an amount equal to 100% of the aggregate Available Amount of all outstanding Revolving Letters of Credit and as Drax LOC Collateral in the Drax LOC Cash Collateral Account up to an amount equal to 100% of the Drax LOC Available Amount.

(d) Any amounts to be paid to the Representatives of the Exchange Note Holders, the Sul Guaranteed Parties, the Lake Worth LOC Bank and the Other Debt Holders pursuant to clause THIRD above shall be applied by the Collateral Trustees for the ratable benefit of the Exchange Note Holders, the Sul Guaranteed Parties, the Lake Worth LOC Bank and the Other Debt Holders as follows:

FIRST, paid to the Representatives of the Exchange Note Holders, the Sul Guaranteed Parties, the Lake Worth LOC Bank and the Other Debt Holders for any amounts then owing to them under the Exchange Note Agreements, the Sul Guarantee, the Lake Worth Letter of Credit and the Other Debt Agreements ratably in accordance with the respective amounts then owing to such Representatives; and

SECOND, ratably (A) paid to the Exchange Note Holders and the Other Debt Holders for any amounts then owing to them under the Exchange Note Indenture and the Other Debt Agreements, (B) upon the instruction of the Sul Agent, either (x) paid to the Sul Guaranteed Parties for any amounts then owing to them under the Sul Guarantee or (y) deposited as cash collateral in an account designated by the Sul Agent in an amount up to $50,000,000 to secure the Obligations of the Borrower under the Sul Guarantee and (C) upon the instruction of the Lake Worth LOC Bank, either
(x) paid to the Lake Worth LOC Bank for any amounts then owing to them under the Lake Worth Letter of Credit or (y) deposited as cash collateral in an account designated by the Lake Worth LOC Bank in

an amount up to $5,490,449 to secure the Obligations of Lake Worth under the Lake Worth Letter of Credit.

SECTION 5.02. Application of Withheld Amounts. If on any Distribution Date any amounts on deposit to the Collateral Account are distributable pursuant to
Section 5.01 to any Representative, and if such Representative shall have given notice to the Collateral Trustees on or prior to such Distribution Date that all or a portion of such proceeds which are otherwise distributable to such Representative pursuant to Section 5.01 shall be held by the Collateral Trustees on behalf of such Representative for the benefit of the Secured Holders of such Representative, then the Collateral Trustees shall hold such amount in a separate non-interest bearing cash collateral account of the Corporate Trustee for the benefit of such Representative and such Secured Holders, until such time as such Representative shall deliver a written request for the delivery thereof from such account to such Representative in accordance with Section 5.01(c) or 5.01(d), as applicable. If thereafter the Secured Obligations of the Secured Holders represented by any such Representative shall have been repaid in full in cash on any date, then (a) upon the written request of the Borrower certifying as to such payment in full, and (b) after delivery of such notice by the Collateral Trustees to such Representative, the Collateral Trustees shall not have received a written notice of objection from such Representative within 30 days of such Representative's receipt of such notice, promptly following such 30th day (or the earlier receipt by the Collateral Trustees of the written consent of such Representative), any amounts held on account for such Representative pursuant to this Section 5.02 shall be again deposited by the Collateral Trustee to the Collateral Account and thereafter distributed as provided in Section 5.01. If the Borrower shall have failed to deliver to the Collateral Trustees the certificate provided for in clause (a) of the immediately preceding sentence, the Collateral Trustees may request payment instructions from the Required Representative(s) and the Collateral Trustees shall not be required to make any distributions until such instructions are received. The Corporate Trustee shall invest amounts on deposit to any such account in such Cash Equivalents as the applicable Representative may direct from time to time.

SECTION 5.03. Release of Amounts in Collateral Account. Amounts distributable to a Representative on any Distribution Date pursuant to Section 5.01 shall be paid to such Representative for the benefit of such Representative and its Secured Holders by the Corporate Trustee (or deposited to an account for the benefit of such Representative and its Secured Holders pursuant to Section 5.02) upon receipt by the Corporate Trustee of a written certificate of such Representative setting forth appropriate payments instructions for such Representative. If no such notice is delivered by a Representative within 10 Business Days thereafter, the Corporate Trustee shall deposit amounts otherwise distributable to such Representative to an account for the benefit of such Representative and its Secured Holders pursuant to
Section 5.02 hereof.

SECTION 5.04. Distribution Date. Upon the occurrence and during the continuance of a Collateral Trust Agreement Default, any amounts on deposit in the Collateral Account shall, at the written request of the Required Representative(s) (with a copy to the Grantors) be distributed as provided in this Article V.

ARTICLE VI

AGREEMENTS WITH THE COLLATERAL TRUSTEE

SECTION 6.01. Delivery of Agreements. On the Effective Date, the Borrower shall deliver to the Collateral Trustees a true and complete copy of each Secured Agreement, including each Shared Collateral Document, as in effect on the Effective Date. The Borrower agrees that, promptly upon the execution thereof, the Borrower will deliver to the Collateral Trustees a true and complete copy of any and all Shared Collateral Documents and other Secured Agreements entered into subsequent to the date hereof and a true and complete copy of any and all amendments, modifications or supplements to any of the foregoing.

SECTION 6.02. Information as to Representatives. (a) The Borrower agrees that it shall deliver to the Collateral Trustees from time to time upon the request of the Collateral Trustees 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 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 Collateral Trustees may reasonably request. In addition, the Borrower shall deliver to the Collateral Trustees, each time a distribution from the Collateral Trust Estate or, the Collateral Account is to be made pursuant to the terms hereof, not later than two Business Days after receipt of a copy of the applicable distribution request delivered by the Required Representative(s) pursuant to Section 5.04 hereof, a certificate of an Authorized Officer of the Borrower, setting forth the amounts to be distributed and the Persons to whom such distributions are to be made, including appropriate payment instructions therefor (the "Payment Information"), provided that if any distribution is directed to be made to any Representative, if such Representative shall have notified the Collateral Trustees in writing that such Representative is unable to accept such distribution, such distribution shall be made instead to an account established pursuant to Section 5.02 hereof for the benefit of such Representative and its Secured Holders. The Borrower will furnish to the Collateral Trustees, with a copy to each Representative, on the Effective Date a list setting forth the name and address of each Representative and each Person to whom notices must be sent under the Secured Agreements and the Borrower agrees to furnish promptly to the Collateral Trustees any changes or additions to such list of which the Borrower is made aware. Unless otherwise specified herein, the Collateral Trustees may for all purposes hereunder, rely on such information given by the Borrower unless (i) the Collateral Trustees shall have actual knowledge of an inaccuracy or (ii) any Representative shall provide contrary information in writing with respect to such Representative in which case, unless such Representative and the Borrower can reach an agreement on such issue within a period of 10 days, the Collateral Trustees shall appoint an independent arbitrator (who shall be reasonably acceptable to the Borrower and such Representative) to resolve the dispute (at the expense of the Borrower). Upon the request of the Collateral Trustees, the Agent and the other Representatives shall deliver the information provided for in this Section 6.02.

(b) If the Borrower shall not have delivered the Payment Information to the Collateral Trustees at least two Business days prior to the applicable Distribution Date, the Collateral Trustees shall request the Payment Information from the Agent and the other Representatives, and if after such request the Collateral Trustees shall not have received the Payment Information from any of the Borrower, the Agent or the other Representatives, the Collateral Trustees shall not be required to take any action under clause THIRD of Section 5.01(a) until it receives such Payment Information.

SECTION 6.03. Compensation and Expenses. Each Grantor agrees to pay to the Collateral Trustees and any co-trustees or successor trustees appointed hereunder, from time to time upon demand, (a) such compensation for their services hereunder and under the other Shared Collateral Documents and for administering the other Collateral Trust Estate, the Collateral Account and any account or accounts established pursuant to Section 5.02 hereof as set forth on the fee schedule attached hereto as Schedule 1, as such Schedule 1 may be amended, supplemented or otherwise modified by the written agreement of the Grantors and the Collateral Trustees from time to time and (b) all the reasonable fees, costs and expenses incurred by any of them (including, without limitation, the reasonable fees and disbursements of counsel) (i) arising in connection with the preparation, execution, delivery, modification and termination of this Agreement and each other Shared Collateral Document or the enforcement of any of the provisions hereof or thereof or (ii) incurred or required to be advanced in connection with the administration of the Collateral Trust Estate, the Collateral Account, any account or accounts established pursuant to Section 5.02 hereof, the sale or other disposition of Collateral pursuant to any Shared Collateral Document and the preservation, protection or defense of their rights under this Agreement and in and to the Collateral, the Collateral Account, any account or accounts established pursuant to Section 5.02 hereof and the Collateral Trust Estate. As security for such payment, the Collateral Trustees shall have a prior lien upon all Collateral and other property and funds held or collected by the Collateral Trustees as part of the Collateral Trust Estate. Each Grantor's obligation under this Section 6.03 shall survive the termination of this Agreement.

SECTION 6.04. Stamp and Other Similar Taxes. Each Grantor agrees to indemnify and hold harmless the Collateral Trustees, each Representative and each Secured Holder from any present or future claim for liability for any stamp or other similar tax and any penalties or interest with respect thereto, which may be assessed, levied or collected by any jurisdiction in connection with this Agreement, any Shared Collateral Document, the Collateral Trust Estate, the Collateral Account, any account or accounts established pursuant to
Section 5.02 hereof or any Collateral. The obligations of each Grantor under this Section 6.04 shall survive the termination of this Agreement.

SECTION 6.05. Filing Fees, Excise Taxes, Etc. Each Grantor agrees to pay or to reimburse the Collateral Trustees for any and all amounts in respect of all reasonable search, filing, recording and registration fees, taxes, excise taxes and other similar imposts which may be payable or determined to be payable in respect of the execution, delivery, performance and enforcement of this Agreement and each other Shared Collateral Document. The obligations of each Grantor under this Section 6.05 shall survive the termination of this Agreement.

SECTION 6.06. Indemnification. (a) Each Grantor agrees to pay, indemnify, and hold harmless the Collateral Trustees and each of the agents of either thereof from and against

any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever (including, without limitation, the costs and expenses of defending any claim against any of them) with respect to the execution, delivery, enforcement, performance and administration of this Agreement and the other Shared Collateral Documents unless and to the extent arising from the gross negligence or willful misconduct of such of the Collateral Trustees or such of the agents thereof as are seeking indemnification or any failure of any Collateral Trustee or any such agent to exercise ordinary care in the handling of moneys and securities and other property actually received by any such Collateral Trustee or any such agent. As security for such payment, any such Collateral Trustee shall have a prior lien upon all Collateral and other property and funds held or collected by the Collateral Trustees as part of the Collateral Trust Estate.

(b) In any suit, proceeding or action brought by the Collateral Trustees under or with respect to any Shared Collateral Document or the Collateral for any amount owing thereunder, or to enforce any provisions thereof, each Grantor will save, indemnify and hold harmless the Collateral Trustees, the Representatives and the Secured Holders from and against all expense, loss or damage suffered by reason of any defense, set-off, counterclaim, recoupment or reduction of liability whatsoever of the obligee thereunder (unless and to the extent that such expense, loss or damage is caused by the gross negligence or willful misconduct of the such Collateral Trustee or the failure of any Collateral Trustee to exercise ordinary care in the handling of moneys and securities and other property actually received by such Collateral Trustee), arising out of a breach by such Grantor of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such obligee or its successors from such Grantor and all such obligations of such Grantor shall be and remain enforceable against and only against such Grantor and shall not be enforceable against the Collateral Trustees, any Representative or any Secured Holder. The agreements in this
Section 6.06 shall survive the termination of this Agreement.

SECTION 6.07. Further Assurances. (a) Each Grantor agrees, from time to time, at its own expense to execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register, and cause its Subsidiaries, if any, to promptly execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, financing statements and continuations thereof, notices of assignment, transfers, certificates, assurances and other instruments as may be reasonably necessary or desirable, or as any Collateral Trustee, any Representative, any Secured Holder through its Representative, may reasonably request from time to time in order (i) to carry out more effectively the purposes of this Agreement, (ii) to subject to the liens and security interests created by any of the Shared Collateral Documents any of the properties, rights or interests of such Grantor covered or now or hereafter intended to be covered by any of the Shared Collateral Documents, (iii) to perfect and maintain the validity, effectiveness and priority of any of the Shared Collateral Documents and the liens and security interests intended to be created thereby, (iv) to better assure, convey, grant, assign, transfer, preserve, protect and confirm unto the Collateral Trustees, the Representatives and the Secured Holders the rights granted or now or hereafter intended to be granted to the Collateral Trustees, the Representatives and the Secured Holders under any Shared Collateral Document or under any other instrument executed in connection with any Shared Collateral Document to which it is or may become a party, and (v) to enable the Collateral Trustees to exercise and enforce their rights and remedies hereunder and under each other Shared Collateral Document with respect to

any Collateral; provided, however, that this Section 6.07 shall not be construed to require any Grantor to grant any interest in Collateral other than pursuant to this Agreement, the Credit Agreement or any other Shared Collateral Document. Without limiting the generality of the foregoing, each Grantor will take any such action required to be taken by it pursuant to any Shared Collateral Document.

(b) Each Grantor hereby authorizes the Collateral Trustees to file one or more financing or continuation statements relative to all or any part of the Collateral, and amendments thereto to correct the name and address of such Grantor or the Collateral Trustees or to correct the description of the "Collateral" contained in any of the Shared Collateral Documents to be consistent with the description of the Collateral contained in such Shared Collateral Document, in each case without the signature of such Grantor where permitted by law and which shall be filed by the Collateral Trustees upon the receipt of an instruction letter from the Required Representatives requesting the taking of such action and attaching the form of financing statement. A photocopy or other reproduction of this Agreement, any other Shared Collateral Document or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law.

(c) The Grantors will furnish such information about the Collateral as the Collateral Trustees may reasonably request from time to time.

ARTICLE VII

THE COLLATERAL TRUSTEE

SECTION 7.01. Declaration of Trust. Each of the Corporate Trustee and the Individual Trustee, for itself and its successors, hereby accepts the trusts created by this Agreement upon the terms and conditions hereof, including those contained in this Article VII. Further, each of the Corporate Trustee and the Individual Trustee, for itself and its successors, does hereby declare that it will hold all of the estate, right, title and interest in (a) the Collateral Trust Estate and the Collateral Account for the equal and ratable benefit of the Representatives and the Secured Holders as provided herein, and (b) each account as may be established pursuant to Section 5.02 at the request of a Representative upon the trust herein set forth and for the benefit of such Representative on behalf of its applicable Secured Holders as provided herein.

SECTION 7.02. Exculpatory Provisions. (a) The Collateral Trustees shall not be responsible in any manner whatsoever for the correctness of any recitals, statements, representations or warranties contained herein or in the other Shared Collateral Documents, all of which are made solely by the Grantors party thereto. The Collateral Trustees make no representations as to the value or condition of the Collateral Trust Estate, the Collateral Account or any part thereof, or as to the title of the Grantors thereto or as to the security afforded by this Agreement or the other Shared Collateral Documents or as to the validity, execution (except its own execution), enforceability, legality or sufficiency of this Agreement, any other Shared Collateral Document or any Secured Agreement, and the Collateral Trustees shall incur no liability or responsibility in respect of any such matters. The Collateral Trustees shall not be responsible for insuring the Collateral Trust Estate or for the payment of taxes, charges, assessments or liens upon the Collateral Trust Estate or otherwise as to the maintenance of the

Collateral Trust Estate or the Collateral Account, except that in any event that any Collateral Trustee enters into possession of a part or all of the Collateral Trust Estate or the Collateral Account, such Collateral Trustee, shall preserve the part in its possession.

(b) The Collateral Trustees shall not be required to ascertain or inquire as to the performance by the Grantors of any of the covenants or agreements contained herein, in any other Shared Collateral Document or in any Secured Agreement.

SECTION 7.03. Delegation of Duties. The Collateral Trustees may execute any of the trusts or powers hereof and perform any duty hereunder either directly or by or through agents or attorneys-in-fact (which shall not include officers and employees of any Grantor or any Affiliate of any Grantor). The Collateral Trustees shall be entitled to rely upon advice of reasonably selected counsel and other professionals concerning all matters pertaining to such trusts, powers and duties. The Collateral Trustees shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact reasonably selected by them in good faith.

SECTION 7.04. Reliance by Collateral Trustees. (a) Whenever in the administration of the trusts of this Agreement or, pursuant to any other Shared Collateral Document, the Collateral Trustees shall deem it necessary or desirable that a matter be proved or established in connection with the taking, suffering or omitting any action hereunder by the Collateral Trustees unless otherwise provided herein, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved or established by a certificate of an Authorized Officer of the Borrower delivered to the Collateral Trustees and the Representatives, and such certificate shall constitute a full warranty to the Collateral Trustees for any action taken, suffered or omitted in reliance thereon unless (i) the Collateral Trustees shall have actual knowledge of an inaccuracy therein or (ii) the Required Representative(s) shall provide contrary information in writing with respect to such matter within 10 days of receipt thereof by such Required Representative(s), in which case unless such Required Representative(s) and the Grantors can reach agreement on such issue within a period of 10 days, the Collateral Trustees shall appoint, at the expense of the Grantors, an independent arbitrator (who shall be reasonably acceptable to the Grantors and such Required Representative(s)) to resolve the dispute.

(b) The Collateral Trustees may consult with independent counsel, independent public accountants and other experts selected by it (excluding, counsel to or any employee of any Grantor or any Affiliate of any Grantor) and any opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by them hereunder in accordance therewith unless such Collateral Trustee has actual knowledge of a reason to question the validity or accuracy of such opinion or of any assumptions expressed therein as the basis for such opinion. The Collateral Trustees shall have the right at any time to seek instructions concerning the administration of the Collateral Trust Estate or the Collateral Account or any account established pursuant to Section 5.02 hereof from any court of competent jurisdiction.

(c) The Collateral Trustees may rely, and shall be fully protected in acting, upon any resolution, statement, certificate, instrument, opinion, report, notice, request, consent, order, bond or other paper or document which they reasonably believe to be genuine and to have

been signed or presented by the proper party or parties or, in the case of telecopies and telexes, to have been sent by the proper party or parties. In the absence of its gross negligence or willful misconduct, each Collateral Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any notices, certificates or opinions furnished to such Collateral Trustee that conform to the requirements of this Agreement or any other Shared Collateral Document.

SECTION 7.05. Limitations on Duties of the Trustees. (a) The Collateral Trustees undertake to perform only the duties expressly set forth herein and no implied covenant or obligation shall be read into this Agreement against the Collateral Trustees.

(b) The Collateral Trustees may exercise the rights and powers granted to them by this Agreement and the other Shared Collateral Documents, but only pursuant to the terms of this Agreement, and the Collateral Trustees shall not be liable with respect to any action taken or omitted by them in accordance with the direction of the Required Representative(s).

(c) Except as herein otherwise expressly provided, the Collateral Trustees shall not be under any obligation to take any action which is discretionary with the Collateral Trustees under the provisions hereof or under any other Shared Collateral Document except upon the written request of the Required Representative(s). The Collateral Trustees shall make available for inspection and copying by each Representative each certificate or other paper furnished to the Collateral Trustees by the Grantors, by any Representative, or by any other Person, under or in respect of this Agreement, any other Shared Collateral Document or any of the Collateral Trust Estate.

(d) The Collateral Trustees shall be under no obligation to exercise any of the rights or powers vested in them by this Agreement or any other Shared Collateral Document at the request or direction of any Representatives pursuant to this Agreement, unless such Representatives shall have offered to the Collateral Trustees security or indemnity satisfactory to the Collateral Trustees against the costs, expenses and liabilities which might be incurred by them in compliance with such request or direction.

(e) Each Secured Holder (other than the Agents and any other Representative, in its capacity as a "representative") shall, ratably (determined as provided below) indemnify the Collateral Trustees, each of their respective Affiliates and the respective directors, officers, agents and employees of any of them (to the extent not reimbursed by the Borrower) 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) (an "Indemnified Event") that such indemnitees may suffer or incur in connection with its exercise of rights and remedies with respect to the Account Collateral and the Securities Accounts. For purposes of this Section 7.05(e), each Secured Holder's ratable share shall be based on the amounts owing to each such Secured Holder under its respective Secured Agreement at the time the Indemnified Event arose.

(f) The Obligations of the Collateral Trustees hereunder are several and not joint.

SECTION 7.06. Moneys to Be Held in Trust. All moneys received by the Corporate Trustee under or pursuant to any provision of this Agreement or any other Shared Collateral Document shall be segregated and held in trust for the purposes for which they were paid or are held and the Corporate Trustee shall exercise ordinary care in the handling of any such moneys actually received by it. The Individual Trustee shall promptly turn over to the Corporate Trustee any Collateral, or any part thereof, delivered to or received by the Individual Trustee.

SECTION 7.07. Resignation and Removal of Collateral Trustees. (a) Each or both of the Collateral Trustees may at any time, by giving 30 days' prior written notice to the Grantors and the Representatives, resign and be discharged of their responsibilities hereby created, such resignation to become effective upon the appointment of a successor trustee or trustees by the Required Representative(s), the acceptance of such appointment by such successor trustee or trustees and, unless a Collateral Trust Agreement Default has occurred and is continuing, the consent to the appointment of such successor trustee or trustees by the Grantors. If a Collateral Trust Agreement Default has occurred, the Grantors' consent to any such resignation shall not be required. The Collateral Trustees shall be entitled to their fees and expenses accrued to the date of the resignation becoming effective. Either or both of the Collateral Trustees may be removed at any time (with or without cause) and a successor trustee or trustees appointed by the affirmative vote of the Required Representative(s), subject to, unless a Collateral Trust Agreement Default has occurred and is continuing, the consent of the Grantors, provided that the Collateral Trustees or either of them shall be entitled to their fees and expenses accrued to the date of removal. If either or both of the Collateral Trustees resigns or is removed as provided in this Section 7.07 the consent to the appointment of a successor trustee or trustees shall not be unreasonably withheld and shall be deemed to have been given if the Grantors shall not have reasonably objected to any proposed successor trustee or trustees within five Business Days of receipt of notice of the identity thereof from the Representatives. If no successor trustee or trustees shall be appointed and approved within 30 days from the date of the giving of the aforesaid notice of resignation or within 30 days from the date of such vote for removal, the Collateral Trustees, shall, or the Required Representative(s) may, apply to any court of competent jurisdiction to appoint a successor trustee or trustees to act until such time, if any, as a successor trustee or trustees shall have been appointed as above provided. Any successor trustee or trustees so appointed by such court shall immediately and without further act be superseded by any successor trustee or trustees approved by the Required Representative(s) as above provided.

(b) If at any time either or both of the Collateral Trustees shall become incapable of acting, or if at any time a vacancy shall occur in the office of the Collateral Trustees for any other cause, a successor trustee or trustees shall be promptly appointed by the Required Representative(s), subject to, unless a Collateral Trust Agreement Default has occurred and is continuing, the consent of the Grantors, which consent shall not be unreasonably withheld, and the powers, duties, authority and title of the predecessor trustee or trustees terminated and cancelled without procuring the resignation of such predecessor trustee or trustees, and without any formality (except as may be required by applicable law) other than appointment and designation of a successor trustee or trustees in writing, duly acknowledged, delivered to the predecessor trustee or trustees and the Grantors and filed for record in each public office, if any, in which this Agreement is required to be filed.

(c) The appointment and designation referred to in Section 7.07(b) shall, after any required filing, be full evidence of the right and authority to make the same and of all the facts therein recited, and this Agreement shall vest in such successor trustee or trustees, without any further act, deed or conveyance, all of the estate and title of its predecessor, and upon such filing for record the successor trustee or trustees shall become fully vested with all the estates, properties, rights, powers, trusts, duties, authority and title of its predecessor; but such predecessor shall, nevertheless, on the written request of the Required Representative(s), the Grantors or its successor trustee or trustees, execute and deliver an instrument transferring to such successor all the estates, properties, rights, powers, trusts, duties, authority and title of such predecessor hereunder and shall deliver all securities and moneys held by it or them to such successor trustee or trustees. Should any deed, conveyance or other instrument in writing from the Grantors be required by any successor trustee or trustees for more fully and certainly vesting in such successor trustee or trustees the estates, properties, rights, powers, trusts, duties, authority and title vested or intended to be vested in the predecessor trustee or trustees, any and all such deeds, conveyances and other instruments in writing shall, on request of such successor trustee or trustees, be executed, acknowledged and delivered by the Grantors.

(d) Any required filing for record of the instrument appointing a successor trustee or trustees as hereinabove provided shall be at the expense of the Grantors. The resignation of any trustee or trustees and the instrument removing any trustee or trustees, together with all other instruments, deeds and conveyances provided for in this Article VII shall, if permitted by law, be forthwith recorded, registered and filed by and at the expense of the Grantors, wherever this Agreement is recorded, registered and filed.

SECTION 7.08. Status of Successors to Trustee. Every successor to the Corporate Trustee appointed pursuant to Section 7.07 shall be a bank or trust company in good standing and having power so to act, incorporated under the laws of the United States or any State thereof or the District of Columbia and having its principal corporate trust office within the State of Delaware, or another state acceptable to the Required Representative(s), and shall also have capital, surplus and undivided profits of not less than $100,000,000, if there be such an institution with such capital, surplus and undivided profits willing, qualified and able to accept the trust upon reasonable or customary terms. Any successor to the Individual Trustee appointed pursuant to Section 7.07 shall be an individual residing in the State of Delaware, the State of New York or another state of the United States acceptable to the Required Representative(s).

SECTION 7.09. Merger of the Corporate Trustee. Any corporation into which the Corporate Trustee may be merged, or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Corporate Trustee shall be a party, shall be the Corporate Trustee under this Agreement without the execution or filing of any paper or any further act on the part of the parties hereto.

SECTION 7.10. Powers of Individual Trustee. The Individual Trustee has been joined as a party hereunder so that if, by any present or future applicable law in any jurisdiction in which it may be necessary to perform any act in the execution or enforcement of the trusts hereby created, the Corporate Trustee may be incompetent, unqualified or unable to act as a Collateral Trustee, then all of the acts required to be performed in such jurisdiction, in the execution or enforcement of the trusts hereby created, shall and will be performed by the

Individual Trustee, acting alone. Notwithstanding any other term or provision of this Agreement to the contrary, the Corporate Trustee alone shall have and exercise the rights and powers granted herein and shall be solely charged with the performance of the duties herein declared on the part of the Collateral Trustees to be had and exercised or to be performed without any action taken by the Individual Trustee; provided, however, that if the Corporate Trustee or the Required Representative(s) deem it necessary or desirable for the Individual Trustee to act in a particular jurisdiction, the Individual Trustee shall have and exercise the rights and powers granted herein (but no greater powers) and shall be charged with the performance of the duties herein declared on the part of the Collateral Trustees to be had and exercised or to be performed, but only in such particular jurisdiction.

SECTION 7.11. Additional Co-Trustees; Separate Trustees. (a) If at any time or times it shall be necessary or prudent in order to conform to any law of any jurisdiction in which any of the Collateral shall be located, or the Collateral Trustees shall be advised by counsel satisfactory to them that it is so necessary or prudent in the interest of the Representatives on behalf of the Secured Holders, or the Required Representative shall in writing so request by notice to the Collateral Trustees and the Grantors, or the Collateral Trustees shall deem it desirable for their own protection in the performance of their duties hereunder, or the Grantors shall in writing so request by notice to the Collateral Trustees with the consent of the Required Representative, the Collateral Trustees and the Grantors shall execute and deliver all instruments and agreements necessary or proper to constitute another bank or trust company, or one or more persons approved by the Collateral Trustees, the Grantors and the Required Representative, either to act as co-trustee or co-trustees of all or any of the Collateral, jointly with the Collateral Trustees originally named herein or any successor, or to act as separate trustee of any such property. In the event the Grantors shall not have joined in the execution of such instruments and agreements within 10 days after the receipt of a written request from the Collateral Trustees so to do, or in case a Collateral Trust Agreement Default shall have occurred and be continuing, the Collateral Trustees may act under the foregoing provisions of this Section 7.11 without the concurrence of the Grantors (but with the concurrence of the Required Representative), and the Grantors hereby appoint the Collateral Trustees as their agents and attorneys to act for them under the foregoing provisions of this Section 7.11 in either of such contingencies.

(b) Any separate trustee and any co-trustee (other than any trustee which may be appointed as successor to the Corporate Trustee or the Individual Trustee pursuant to Section 7.07) shall, to the extent permitted by law, be appointed and act and be such, subject to the following provisions and conditions, namely:

(i) all rights, powers, duties and obligations conferred upon the trustees in respect of the custody, control and management of moneys, papers or securities shall be exercised solely by the Collateral Trustees originally named herein or their successors appointed pursuant to Section 7.07;

(ii) all rights, powers, duties and obligations conferred or imposed upon the Collateral Trustees hereunder shall be conferred or imposed and exercised or performed by the Collateral Trustees and such separate trustee or co-trustee, jointly, as shall be provided in the instrument appointing such separate trustee or co-trustee, except to the extent that under any law of any jurisdiction in which any particular act or acts are

to be

performed the Collateral Trustees shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations shall be exercised and performed by such separate trustee or co-trustee;

(iii) no power given hereby to, or which it is provided hereby may be exercised by, any such co-trustee or separate trustee, shall be exercised hereunder by such co-trustee or separate trustee, except jointly with, or with the consent in writing of, the Collateral Trustees, anything herein contained to the contrary notwithstanding;

(iv) no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and

(v) the Grantors and the Collateral Trustees, at any time, by an instrument in writing, executed by them jointly, may accept the resignation of or remove any such separate trustee, and in that case, by an instrument in writing executed by the Grantors and the Collateral Trustees jointly, may appoint a successor (who shall be acceptable to the Required Representative(s)) to such a separate trustee or co-trustee, as the case may be, anything herein contained to the contrary notwithstanding. In the event that the Grantors shall not have joined in the execution of any such instrument within 10 days after the receipt of a written request from the Collateral Trustees so to do, or in case a Collateral Trust Agreement Default shall have occurred and be continuing, the Collateral Trustees shall have the power to accept the resignation of or remove any such separate trustee or co-trustee and to appoint (with the consent of the Required Representative(s)) a successor without the concurrence of the Grantors and the Grantors hereby appoint the Collateral Trustees their agents and attorneys to act for them in such connection in either of such contingencies. In the event that the Collateral Trustees shall have appointed a separate trustee or co-trustee or as above provided, they may at any time, by an instrument in writing, accept the resignation of or remove any such separate trustee, the successor to any such separate trustee to be appointed by the Grantors and the Collateral Trustees, or by the Collateral Trustees alone, as hereinbefore provided in this Section 7.11.

SECTION 7.12. Trustees Appointed Attorneys-in-Fact. Each Grantor hereby irrevocably constitutes and appoints the Collateral Trustees and any officer or agent thereof, with full power of substitution, as its true and lawful attorneys-in-fact with full power and authority in the name of such Grantor or their own name and in the place and stead of such Grantor and in the name of such Grantor, from time to time at the direction of the Required Representative(s), to take any action and to execute any instrument which the same may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, to receive, endorse and collect all instruments made payable to such Grantor representing any dividend, interest payment or other distribution in respect of the Collateral or any part thereof and to give full discharge for the same in accordance with the terms of the Shared Collateral Documents. Each Grantor acknowledges and agrees that the foregoing power of attorney is coupled with an interest and may not be revoked or modified except with the consent of the Collateral Trustees or as otherwise provided herein.

SECTION 7.13. Ordinary Care. The Collateral Trustees shall be deemed to have exercised ordinary care in the custody and preservation of the Collateral in their possession if the Collateral is accorded treatment substantially equal to that which the Collateral Trustees accord their own property, it being understood that the Collateral Trustees shall not have any responsibility for
(i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Collateral, whether or not the Collateral Trustees have or are deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any parties with respect to any Collateral.

ARTICLE VIII

RELEASE OF COLLATERAL

SECTION 8.01. Partial Release of Collateral. (a) Any Grantor may, from time to time so long as no Collateral Trust Agreement Default shall have occurred and be continuing, request the release of the lien and security interest of the Shared Collateral Documents in any portion of the Collateral of such Grantor proposed to be sold or otherwise disposed of by such Grantor to any other Person, upon notice to the Collateral Trustees from an Authorized Officer of the Borrower (a "Notice of Partial Release"), which Notice of Partial Release shall be delivered to the other Grantors, the Collateral Trustees and the Representatives at least twenty Business Days prior to the date of the proposed sale or other disposition of such Collateral (unless a shorter period of time is acceptable to the Collateral Trustees and the Required Representative(s)) and shall

(i) specify the Collateral to be so sold or otherwise disposed of and the proposed date of such sale or other disposition, and

(ii) certify that the sale or other disposition of such Collateral is in compliance with the terms of the Applicable Agreements, and the Grantors are not, and after giving effect to such release, would not be, in default under the Applicable Agreements.

If a Notice of Partial Release is delivered to the Collateral Trustees in accordance with the immediately preceding sentence and the Required Representative(s), shall not have objected in writing thereto prior to the date of the proposed release, the security interest in such Collateral shall automatically, without further action, be released and the Collateral Trustees shall execute and deliver to the Grantors, on the date of the proposed release (or as promptly thereafter as possible), a release or releases (including, without limitation, Uniform Commercial Code release statements and instruments of satisfaction, discharge and/or reconveyance) in recordable form as to the Collateral specified in such Notice of Partial Release from the liens, security interests, conveyances and assignments evidenced by the Shared Collateral Documents, which release shall state that it is effective as of the date of such disposition; provided, however, that, if prior to the time that the Collateral Trustees deliver a release pursuant to this Section 8.01(a), the Collateral Trustees shall have received either (A) a Collateral Trust Agreement Default Notice that shall not have been withdrawn prior to such time and the Required Representative(s) shall have directed the Collateral Trustees either not to deliver such a release or not to deliver releases generally or (B) a written objection from the Required Representative(s) stating that such sale or other disposition is not permitted under the Applicable Agreement, then, in either case, the

Collateral Trustees shall so notify the Grantors and shall not sign any release or releases in connection with such disposition.

(b) If, at any time, the Collateral Trustees shall receive a written notice from an Authorized Officer of the Borrower, (i) stating that any promissory note or other similar or related instrument evidencing obligations payable to such Grantor and included in the Collateral has been paid in full in accordance with its terms (or will be so paid concurrently with the surrender thereof), and (ii) identifying such note or other instrument in reasonable detail (including, without limitation, by its date of issuance, the name of its payee and the principal amount thereof), then the Collateral Trustees shall promptly deliver a copy of each such notice to the other Grantors, each Representative and, unless the Required Representative(s) shall have disputed the accuracy of such notice within ten Business Days of the delivery of such notice, the Collateral Trustees shall promptly deliver such note or other instrument to the Borrower, and promptly execute and deliver a release or releases (including, without limitation, Uniform Commercial Code release statements) in recordable form as to any such note or other instrument from the liens, security interests, conveyances and assignments evidenced by the Shared Collateral Documents, which release shall state that it is effective as of the date of its delivery.

SECTION 8.02. Full Release of Collateral Upon Satisfaction of Certain Secured Obligations. (a) The Collateral Trustees shall promptly release, in accordance with Section 8.03, all the Collateral upon the latest of the (i) cash payment in full of all Secured Obligations arising under the Credit Agreement, the Notes, the Banc of America Secured Option, the Exchange Note Agreements, the Sul Guarantee, the Lake Worth Letter of Credit, the Other Debt Agreements and each other agreement or instrument delivered by the Grantors pursuant thereto, (ii) termination of the Exchange Note Indenture, (iii) the termination of the Revolving Credit Loan Commitments and (iv) the termination or expiration of all Revolving Letters of Credit and the Drax Letter of Credit.

(b) In furtherance of the undertaking set forth above in Section 8.02(a), the Collateral Trustees shall, upon the request of the Grantors accompanied by a certificate of an Authorized Officer of each Grantor, upon which the Collateral Trustees may conclusively rely without independent verification, to the effect that all Secured Obligations under the Secured Agreements referred to in clause (i) of the preceding subsection (a) have been, or will, concurrently with the release of the Collateral be, paid in full in cash and all Revolving Credit Loan Commitments, all Revolving Letters of Credit and the Drax Letter of Credit have been terminated (and if such Secured Obligations have not previously been so paid, describing the source(s) of funds for such repayment), deliver a notice by registered mail to each of the Representatives containing the following:

(i) a statement as to the total amount of moneys in the Collateral Account and any account which has been established at the request of any Representative pursuant to Section 5.02; and

(ii) a statement that the Collateral Trustees will release such Collateral only upon receipt from the Representatives of instructions to do so.

If the Collateral Trustees receive a direction from the Representatives to so release such Collateral (and the Collateral Trustees shall not have received any notice that a Collateral Trust Agreement Default has occurred or is continuing), then the Collateral Trustees shall release all the Collateral from the security interest in their favor and deliver to the Grantors all Collateral in the possession of the Collateral Trustees as specified in such instruction; provided, however, that the Grantors shall have made adequate provision for the expenses of the Collateral Trustees associated with such release of Collateral and all other expenses of, or payable to, the Collateral Trustees hereunder. If the Collateral Trustees shall not have received an instruction so to release such Collateral (or shall have received a Collateral Trust Agreement Default Notice which has not been withdrawn), the Collateral Trustees shall not release the Collateral unless and until the Representatives or a court of competent jurisdiction so directs the Collateral Trustees pursuant to a final, non-appealable judgment (including a judgment that becomes non-appealable by reason of expiration of any period of time limiting the right to appeal therefrom).

SECTION 8.03. Effect of Release of Collateral. Upon the effectiveness of the release of the Collateral pursuant to Section 8.02, all right, title and interest of the Collateral Trustees and the Representatives on behalf of the Secured Holders in, to and under the Collateral Trust Estate, the Collateral and the Shared Collateral Documents shall terminate and shall revert to the Grantors and their successors and assigns, and the estate, right, title and interest of the Collateral Trustees therein shall thereupon cease; and in such case, upon the written request of the Grantors, their successors or assigns, and at the cost and expense of the Grantors, their successors or assigns, the Collateral Trustees shall promptly execute and deliver a satisfaction of the Shared Collateral Documents and such instruments as are necessary or desirable to terminate and remove of record any documents constituting public notice of the Shared Collateral Documents and the security interests granted thereunder and shall transfer, or cause to be transferred, and shall deliver or cause to be delivered to the Grantors, all property, including all moneys, instruments and securities of the Grantors then held by the Collateral Trustees. The cancellation and satisfaction of the Shared Collateral Documents shall be without prejudice to the rights of the Collateral Trustees or any successor trustee or trustees to charge and be reimbursed for any expenditures which they may thereafter incur in connection therewith.

ARTICLE IX

MISCELLANEOUS

SECTION 9.01. Amendments, Supplements and Waivers. (a) With the written consent of the Required Representative(s) and the Corporate Trustee, the Grantors may, from time to time, enter into written agreements supplemental hereto for the purpose of adding to or waiving any provision of this Agreement or any other Shared Collateral Document or changing in any manner the rights of the Collateral Trustees, the Representatives, the Secured Holders and the Grantors hereunder or thereunder; provided that

(i) no such amendment, waiver or consent shall, unless the approval of all the Representatives existing at such time shall have been obtained, amend, waive or otherwise modify any provision of Sections 5.01, 8.01, 8.02 and 9.01 or amend or otherwise modify the definitions of "Required Representative(s)", "Secured Agreements", "Secured Holders", "Secured Obligations" or "Collateral Trust Agreement Default" set forth in Section 1.01,

(ii) no such amendment, waiver or consent shall amend, waive or otherwise modify this Agreement or any other Shared Collateral Document unless such amendment, waiver or consent complies with the amendment provisions (or other similar provisions) of the then outstanding Applicable Agreements,

(iii) no such amendment, waiver or consent shall, unless in writing and signed by the Individual Trustee, amend, waive or otherwise modify any provision of Section 7.10,

(iv) any such supplemental agreement shall be binding upon the Grantors, the Representatives, the Secured Holders and the Collateral Trustees and their respective successors,

(v) the Collateral Trustees shall not enter into any such supplemental agreement unless they shall have received a certificate of an Authorized Officer of each Grantor to the effect that such supplemental agreement will not result in a breach of any provision or covenant contained in the Applicable Agreement, and

(vi) the Collateral Trustees shall not enter into any such supplemental agreement unless they shall have received a certificate of the Required Representative(s) and, in the case that the Required Representative(s) are not then the Other Debt Representatives, the Other Debt Representatives, in the case of clause (ii) above, to the effect that, upon receipt of the Corporate Trustee's written consent, this Section 9.01(a) has been complied with and an instruction letter requesting the Corporate Trustee and Individual Trustee to execute such supplemental agreement.

(b) Notwithstanding the provisions of paragraph (a), (x) so long as the Obligations of the Borrower with respect to the Banc of America Secured Option shall remain outstanding, the approval of Banc of America Securities LLC shall be required for any amendment, waiver or consent of the type set forth in paragraph (a) that adversely affects the rights of Banc of America Securities LLC in a way different from the other Secured Holders and (y) the Collateral Trustees and the Grantors may, at any time and from time to time, without the consent of the Agent and any other Representative or any Secured Holders, enter into additional Shared Collateral Documents or one or more agreements supplemental hereto or to any Shared Collateral Document, in form satisfactory to the Collateral Trustees,

(i) to add to the covenants of the Grantors for the benefit of the Representatives or any Secured Holder, or to surrender any right or power herein conferred upon the Grantors; or

(ii) to mortgage, pledge or grant a security interest in favor of the Collateral Trustees as additional security for the Secured Obligations any property or assets which are required to be mortgaged or pledged, or in which a security interest is required to be granted, to the Collateral Trustees pursuant to any Shared Collateral Document or otherwise.

SECTION 9.02. Additional Actions of Representatives. Whether or not there shall be a Collateral Trust Agreement Default, the Collateral Trustees shall comply and shall be fully protected in complying with any reasonable request of
(a) the Required Representative(s), to take or refrain from taking certain actions with respect to the Collateral or the Representatives,

and (b) more than 50% of the Secured Holders represented by any Representative which has requested that an account be opened pursuant to Section 5.02, to take or refrain from taking certain actions with respect to such account, provided, in each case, that the Collateral Trustees shall not take or refrain from taking such actions if to do so would violate applicable law or the terms of this Agreement, the other Shared Collateral Documents or the Applicable Agreements or if the Collateral Trustees shall not be indemnified as provided in Section 6.06(b).

SECTION 9.03. Notices. All notices, requests, demands and other communications provided for or permitted hereunder shall, unless otherwise stated herein, be in writing (including telex and telecopy communications) and shall be sent by mail (by registered or certified mail, return receipt requested), overnight prepaid courier, telex, telecopier or hand delivery:

(a) If to the Grantors, to their addresses specified in the Credit Agreement or in any Shared Collateral Document;

(b) If to the Corporate Trustee, at Rodney Square North, 1100 North Market St., Wilmington, DE 19890, Attention: Corporate Trust Division, or at such other address as shall be designated by it in a written notice to the Grantors and each Representative, with a copy to the Individual Trustee, at 1100 North Market St. Rodney Square North Wilmington, DE 19890, Attention: Corporate Trust Division, or at such other address as shall be designated by him in a written notice to the Grantors and each Representative; provided that failure to send a copy of any notice to the Individual Trustee shall not render any notice to the Collateral Trustees ineffective; and

(c) If to any Representative, to it at the address specified from time to time in the list provided by the Grantors to the Collateral Trustees pursuant to Section 6.02 with copies to whomever (other than the Grantors) is specified by the Grantors pursuant to Section 6.02 as a Person to whom notice must be sent under the Secured Agreements, provided that in the case that no address is known for a Representative, notice shall be given to it in the manner specified by the related Secured Agreement, and, in the absence of any such specified means of giving notice, by such notice in the national edition of The Wall Street Journal or as the Collateral Trustees shall determine to be reasonable. For purposes of notice by publication, one notice is sufficient and shall be deemed made on the date of its publication.

All such notices, requests, demands and communications shall be deemed to have been duly given or made, (i) when delivered by hand, (ii) five Business Days after being deposited in the mail, postage prepaid, (iii) the next Business Day if delivered by an overnight prepaid courier, (iv) when telexed with answerback received, (v) when telecopied or (vi) when published in The Wall Street Journal or such other publication; provided, however, that any notice, request, demand or other communication to (1) the Collateral Trustees or (2) any Representative under Article V or Article VIII shall not be effective until received by the Corporate Trustee or such Representative, as the case may be, and, provided, further, that any notice to the Collateral Trustees from any Grantor shall be signed by an Authorized Officer, unless otherwise specifically set forth herein.

SECTION 9.04. Headings. Section, subsection and other headings used in this Agreement are for convenience only and shall not affect the construction of this Agreement.

SECTION 9.05. Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SECTION 9.06. Treatment of Payee or Indorsee by Trustees. (a) The Collateral Trustees may treat the registered Secured Holder of any registered note, and the payee or indorsee of any note or debenture which is not registered, as the absolute owner thereof for all purposes hereunder and shall not be affected by any notice to the contrary, whether such promissory note or debenture shall be past due or not.

(b) Any person, firm, corporation or other entity which shall be designated as the duly authorized representative of one or more Representatives to act as such in connection with any matters pertaining to this Agreement or any other Shared Collateral Document or the Collateral shall present to the Collateral Trustees such documents, including, without limitation, opinions of counsel, as the Collateral Trustees may reasonably require, in order to demonstrate to the Collateral Trustees the authority of such person, firm, corporation or other entity to act as the representative of such Representatives.

SECTION 9.07. Dealings with the Grantors. Upon any application or demand by the Grantors to the Collateral Trustees to take or permit any action under any of the provisions of this Agreement, each Grantor shall (unless otherwise waived by the Collateral Trustees in writing) furnish to the Collateral Trustees a certificate signed by an Authorized Officer stating that all conditions precedent, if any, provided for in this Agreement relating to the proposed action have been complied with, except that in the case of any such application or demand as to which the furnishing of such documents is specifically required by any provision of this Agreement relating to such particular application or demand, no additional certificate need be furnished.

SECTION 9.08. Claims. This Agreement is made for the benefit of the Representatives on behalf of the Secured Holders, and the Representatives may from time to time enforce their rights as explicit beneficiaries hereunder pursuant to the terms and conditions of this Agreement and the other Shared Collateral Documents.

SECTION 9.09. Binding Effect. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and shall inure to the benefit of the Representatives on behalf of the Secured Holders and their respective successors and assigns and nothing herein or in any other Shared Collateral Document is intended or shall be construed to give any other Person any right, remedy or claim under, to or in respect of this Agreement, any other Shared Collateral Document, the Collateral, the Collateral Account or the Collateral Trust Estate or any part thereof.

SECTION 9.10. Governing Law. The provisions of this Agreement creating a trust for the benefit of the Representatives on behalf of the Secured Holders and setting forth the

rights, duties, obligations and responsibilities of the Collateral Trustees hereunder shall be governed by and construed in accordance with the laws of the State of Delaware, so long as Wilmington Trust Company shall serve as Corporate Trustee hereunder. In all other respects, including, without limitation, all matters governed by the Uniform Commercial Code, and if Wilmington Trust Company shall cease to serve as Corporate Trustee hereunder, this Agreement shall be governed by and construed in accordance with the laws of the State of New York, except as otherwise required by mandatory provisions of law.

SECTION 9.11. Effectiveness. This Agreement shall become effective on the execution and delivery hereof and shall remain in effect so long as the Collateral Trustees shall have any obligations hereunder.

SECTION 9.12. Reexecution of Agreement. This Agreement shall be reexecuted at any time and from time to time, at the request of the Required Representative(s), with such changes in the form hereof (including, without limitation, changes on the cover page and adding supplemental signatures and notary statements) as may be necessary to comply with the filing or recording requirements of any jurisdiction where this Agreement is to be filed.

SECTION 9.13. Effect on Credit Agreements. Nothing in this Agreement shall operate or be deemed to prevent any amendment, modification or waiver of the Credit Agreement or other Credit Agreement Document by the parties thereto in accordance with the terms thereof.

SECTION 9.14. Counterparts. This Agreement may be executed in separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.

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

Corporate Trustee:                       WILMINGTON TRUST COMPANY, not in its
                                         individual capacity, but solely as
                                         Corporate Trustee


                                         By:
                                            ----------------------------------
                                            Title:

Individual Trustee:
                                         --------------------------------------
                                         BRUCE L. BISSON, not in his individual
                                         capacity, but solely as Individual
                                         Trustee

Grantors:                                THE AES CORPORATION,
                                         a Delaware corporation


                                         By:
                                            ----------------------------------
                                            Title:


                                         AES INTERNATIONAL HOLDINGS II, LTD.,
                                         a British Virgin Islands company


                                         By:
                                            ----------------------------------
                                            Title:

                                         ACKNOWLEDGED AND AGREED ON
                                         THE DATE HEREOF BY:


                                         CITICORP USA, INC.,
                                         as Administrative Agent


                                         By:
                                            ----------------------------------
                                            Title:


                                         WELLS FARGO BANK MINNESOTA, NATIONAL
                                         ASSOCIATION, as Exchange Note Trustee


                                         By:
                                            ----------------------------------
                                            Title:


                                         BANKBOSTON, N.A., NASSAU BRANCH,
                                         as Sul Agent


                                         By:
                                            ----------------------------------
                                            Title:


                                         FLEET NATIONAL BANK,
                                         as Lake Worth LOC Bank


                                         By:
                                            ----------------------------------

Title:

EXHIBIT 4.3

EXECUTION COPY

SECURITY AGREEMENT

Dated December 12, 2002

From

The Grantors referred to herein

as Grantors

to

WILMINGTON TRUST COMPANY

as Corporate Trustee

and

Bruce L. Bisson

as Individual Trustee

                               TABLE OF CONTENTS


Section                                                                     Page

Section 1.    Grant of Security................................................4

Section 2.    Security for Obligations.........................................7

Section 3.    Grantors Remain Liable...........................................7

Section 4.    Delivery and Control of Security Collateral......................7

Section 5.    Maintaining the Account Collateral...............................9

Section 6.    Maintaining Letter-of-Credit Rights.............................10

Section 7.    Representations and Warranties..................................11

Section 8.    Further Assurances..............................................13

Section 9.    Post-Closing Changes; Collections on Assigned Agreements,
              Receivables and Related Contracts...............................15

Section 10.   Voting Rights; Dividends; Etc...................................16

Section 11.   As to the Assigned Agreements...................................17

Section 12.   Payments Under the Assigned Agreements; Letters of Credit.......17

Section 13.   Transfers and Other Liens; Additional Shares....................18

Section 14.   Collateral Trustees May Perform.................................18

Section 15.   Remedies........................................................18

Section 16.   Indemnity and Expenses..........................................20

Section 17.   Amendments; Waivers; Additional Grantors; Etc...................21

Section 18.   Notices, Etc....................................................21

Section 19.   Continuing Security Interest; Assignments under the
              Credit Agreement................................................22

Section 20.   Release; Termination............................................22

Section 21.   Security Interest Absolute......................................22

Section 22.   Additional Secured Obligations..................................23

Section 23.   Execution in Counterparts.......................................24

Section 24.   Limitation of Liability.........................................24


                                       i

Section 25.   Governing Law...................................................24

Section 26.   Submission to Jurisdiction and Waiver...........................24

Schedules

Schedule I      -   Location, Chief Executive Office, Place Where Agreements
                    Are Maintained, Type Of Organization, Jurisdiction Of
                    Organization And Organizational Identification Number
Schedule II     -   Pledged Equity and Pledged Debt
Schedule III    -   Assigned Agreements
Schedule IV     -   Changes in Name, Location, Etc.
Schedule V      -   Account Collateral
Schedule VI     -   Securities Accounts
Schedule VII    -   Excluded Receivables
Schedule VIII   -   Other Deposit Accounts and Other Securities Accounts


Exhibits

Exhibit A       -   Form of Security Agreement Supplement
Exhibit B       -   Form of Account Control Agreement (Deposit
                    Account/Securities Account)
Exhibit C       -   Form of Consent and Agreement
Exhibit D       -   Form of Securities Account Control Agreement

SECURITY AGREEMENT

SECURITY AGREEMENT dated December 12, 2002 made by The AES Corporation, a Delaware corporation (the "Borrower"), the other Persons listed on the signature pages hereof and the Additional Grantors (as defined in Section 17) (the Borrower, the Persons so listed and the Additional Grantors being, collectively, the "Grantors"), to Wilmington Trust Company, a Delaware banking corporation, not in its individual capacity but solely as corporate trustee (together with any successor corporate trustee appointed pursuant to Article VII of the Collateral Trust Agreement (as hereinafter defined), the "Corporate Trustee"), and Bruce L. Bisson, an individual residing in the State of Delaware, not in his individual capacity but solely as individual trustee (together with any successor individual trustee appointed pursuant to ArticleVII of the Collateral Trust Agreement, the "Individual Trustee"; and, together with the Corporate Trustee, the "Collateral Trustees"), as trustees under the Collateral Trust Agreement dated December 12, 2002 (as such agreement may be amended, supplemented or otherwise modified hereafter from time to time, the "Collateral Trust Agreement") among the Grantors and the Collateral Trustees.

PRELIMINARY STATEMENTS.

(1) The Borrower has entered into an Amended and Restated Credit, Reimbursement and Exchange Agreement dated as of December 12, 2002 (said agreement, as it may hereafter be amended, amended and restated, supplemented or otherwise modified from time to time, being the "Credit Agreement"; terms defined therein and not otherwise defined herein shall have the meanings specified therein) with the Subsidiary Guarantors party thereto, the Banks party thereto (the "Banks"), the Revolving Fronting Banks and the Drax LOC Fronting Bank party thereto, and Citicorp USA, Inc., as Administrative Agent for the Bank Parties (in such capacity, the "Agent") and as Collateral Agent for the Bank Parties (in such capacity, the "Credit Agreement Collateral Agent"; and together with the Agent, the "Agents").

(2) In order to induce the Banks, the Revolving Fronting Banks, the Drax LOC Fronting Banks and the Agents to enter into the Credit Agreement, the Grantors have agreed to grant a continuing security interest in and to the Collateral (as hereinafter defined) to the Collateral Trustees for the ratable benefit of the Lender Parties to secure the Obligations of the Borrower (the "Loan Parties") under the Credit Agreement and the Notes issued pursuant thereto.

(3) The Borrower will enter into an Indenture to be dated as of December 13, 2002 (as amended, supplemented or otherwise modified and in effect on the date hereof and as the same may hereafter be further amended, modified, extended, renewed, replaced, restated or supplemented from time to time pursuant to the terms thereof, the "Exchange Note Indenture") with Wells Fargo Bank Minnesota, National Association (the "Exchange Note Trustee") to exchange the Borrower's (i) 8.75% Senior Notes due 2002 and (ii) the 7.375% Remarketable or Redeemable Securities due 2013 for the 10% Senior Secured Exchange Notes due 2005 to be issued on December 13, 2002 (the "Exchange Notes", and together with the Exchange Note Indenture (only to the extent relating to the Exchange Notes), the "Exchange Note Agreements").

(4) In order to induce the Exchange Note Trustee to enter into the Exchange Note Indenture, the Grantors have agreed to grant a continuing security interest in and to the Collateral to the Collateral Trustees for the ratable benefit of the Exchange Note Holders to secure the Obligations of the Borrower under the Exchange Note Agreements.

(5) The Borrower has entered into a Sponsor Agreement dated as of March 7, 2000 (as amended, supplemented or otherwise modified and in effect on the date hereof and as the same may hereafter be further amended, modified, extended, renewed, replaced, restated or supplemented from time to time pursuant to the terms thereof, the "Sponsor Agreement") with BankBoston, N.A., Nassau Branch, as agent (the "Sul Agent"), pursuant to which the Borrower has agreed to guarantee the obligations of AES Cayman Guaiba, Ltd. under a Credit Agreement dated as of March 6, 2001 (as amended, supplemented or otherwise modified and in effect on the date hereof and as the same may hereafter be further amended, modified, extended, renewed, replaced, restated or supplemented from time to time pursuant to the terms thereof, the "Sul Credit Agreement") with BankBoston, N.A., Nassau Branch, Banc of America Securities, LLC, Unibanco-Uniao de Bancos Brasilieros S.A. and WestLB AG, New York Branch and the lenders named therein (collectively, the "Sul Guaranteed Parties"), in an amount of up to a maximum aggregate amount of $50,000,000 (together with any other agreement or instrument delivered in connection with such guaranty, the "Sul Guarantee").

(6) In order to satisfy certain conditions of the Sul Guarantee, the Grantors have agreed to grant a continuing security interest in and to the Collateral to the Collateral Trustees for the ratable benefit of the Sul Guarantee Parties to secure the Obligations of the Borrower under the Sul Guarantee.

(7) The Borrower has entered into a Gas Transportation Agreement dated as of July 21, 2000 with Florida Public Utilities Company pursuant to which Fleet National Bank (the "Lake Worth LOC Bank") issued in favor of Florida Public Utilities Company irrevocable standby letter of credit number 1S1280134 (together with the application and agreement therefor dated on or about July 6, 2001, the "Lake Worth Letter of Credit") in an aggregate amount not to exceed $5,490,449.

(8) In order to satisfy certain conditions under the Lake Worth Letter of Credit, the Grantors have agreed to grant a continuing security interest in and to the Collateral to the Collateral Trustees for the ratable benefit of the Lake Worth LOC Bank to secure the obligation of Lake Worth Generation LLC ("Lake Worth"), a Subsidiary of the Borrower, to reimburse the Lake Worth LOC Bank for any drawings under the Lake Worth Letter of Credit in an amount of up to a maximum aggregate amount of $5,490,449.

(9) It is a condition precedent to (a) the continuation of the Loans by the Banks and the making of Revolving Credit Loans by the Revolving Credit Loan Banks, (b) the issuance (or be deemed to have issued) of Revolving Letters of Credit by the Revolving Fronting Banks, (c) the deemed issuance of the Drax Letter of Credit and the making of Drax Loans in respect of Drax L/C Drawings by the Drax LOC Fronting Banks, (d) the entry into the Secured Hedge Agreements by the Hedge Banks from time to time, (e) the entry into the Secured Treasury Management Service Agreements by a Bank Party or any Affiliate thereof, (f) the entry into the Exchange Note Indenture by the Exchange Note Trustee, (g) the satisfaction by

Borrower of its obligations under the Sul Guarantee and (h) the satisfaction by Lake Worth of its obligations under the Lake Worth Letter of Credit, that the Grantors shall have granted the assignment and security interest and made the pledge and assignment contemplated by this Agreement.

(10) The Collateral Trustees have agreed, pursuant to the terms of the Collateral Trust Agreement, to accept the pledge and assignment, and the grant of a security interest, under this Agreement as security for the Secured Obligations (as defined in the Collateral Trust Agreement).

(11) Each Grantor will derive substantial direct and indirect benefit from the transactions contemplated by the Secured Agreements.

(12) The Borrower has the security entitlements (the "Pledged Security Entitlements") with respect to all the financial assets (the "Pledged Financial Assets") credited from time to time to the Borrower's securities accounts (the "Securities Accounts") set forth and as otherwise described in Schedule VI hereto with the Persons named therein (each a "Securities Intermediary").

(13) Each Grantor is the owner of the shares of stock or other Equity Interests (the "Initial Pledged Equity") set forth opposite such Grantor's name on and as otherwise described in Part I of Schedule II hereto and issued by the Persons named therein and the Borrower is the owner of the indebtedness (the "Initial Pledged Debt") set forth opposite the Borrower's name on and as otherwise described in Part II of Schedule II hereto and issued by the obligors named therein.

(14) The Borrower has opened a Collateral Account (as defined in the Collateral Trust Agreement), under the control of the Corporate Trustee and subject to the terms of this Agreement and the other Shared Collateral Documents.

(15) The Borrower maintains deposit accounts (the "Deposit Accounts") with banks, in the name of the Borrower and subject to the terms of this Agreement, as described in Schedule V hereto.

(16) Terms defined in the Credit Agreement or the Collateral Trust Agreement and not otherwise defined in this Agreement are used in this Agreement as defined in the Credit Agreement or the Collateral Trust Agreement. Further, unless otherwise defined in this Agreement, the Credit Agreement or the Collateral Trust Agreement, terms defined in Article 8 or 9 of the UCC (as defined below) and/or in the Federal Book Entry Regulations (as defined below) are used in this Agreement as such terms are defined in such Article 8 or 9 and/or the Federal Book Entry Regulations. "UCC" means the Uniform Commercial Code as in effect, from time to time, in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, "UCC" means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority. The term "Federal Book Entry Regulations" means (a) the

federal regulations contained in Subpart B ("Treasury/Reserve Automated Debt Entry System (TRADES)") governing book-entry securities consisting of U.S. Treasury bonds, notes and bills and Subpart D ("Additional Provisions") of 31 C.F.R. Part 357, 31 C.F.R. ss. 357.2, ss. 357.10 through ss. 357.14 and ss. 357.41 through ss. 357.44 and (b) to the extent substantially identical to the federal regulations referred to in clause (a) above (as in effect from time to time), the federal regulations governing other book-entry securities.

NOW, THEREFORE, in consideration of the premises and in order to (1) induce (a) the Banks to continue the Loans and the Revolving Credit Loan Banks to make Revolving Credit Loans, (b) the Revolving Fronting Banks to issue (or be deemed to have issued) Revolving Letters of Credit, (c) the Drax LOC Fronting Bank to be deemed to have issued the Drax Letter of Credit and to make Drax Loans in respect of Drax L/C Drawings, (d) the Hedge Banks to enter into Secured Hedge Agreements from time to time, (e) the entry into the Secured Treasury Management Service Agreements by a Bank Party or an Affiliate thereof and, (f) the Exchange Note Trustee to enter into the Exchange Note Indenture and (2) satisfy certain conditions of the Sul Guarantee and the Lake Worth Letter of Credit, each Grantor hereby agrees with the Collateral Trustees for their benefit and in trust for the ratable benefit of the Representatives and the Secured Holders as follows:

Section 1. Grant of Security. Each Grantor, in order to secure the Secured Obligations, hereby assigns and pledges to the Collateral Trustees for their benefit and in trust for the equitable and ratable benefit of the Representatives and the Secured Holders, and hereby grants to the Collateral Trustees for their benefit and in trust for the equitable and ratable benefit of the Representatives and the Secured Holders, a lien on and security interest in, such Grantor's right, title and interest in and to the following, in each case, as to each type of property described below, whether now owned or hereafter acquired by such Grantor, wherever located, and whether now or hereafter existing or arising (collectively, the "Collateral"):

(a) in the case of the Borrower, all accounts, chattel paper (including, without limitation, tangible chattel paper and electronic chattel paper), instruments (including, without limitation, promissory notes), general intangibles (including, without limitation, payment intangibles) and other obligations of any kind, whether or not arising out of or in connection with the sale or lease of goods or the rendering of services and whether or not earned by performance, and all rights now or hereafter existing in and to all supporting obligations and in and to all security agreements, mortgages, Liens, leases, letters of credit and other contracts securing or otherwise relating to the foregoing property, in each case only to the extent such accounts, chattel paper, instruments, general intangibles and other obligations are owed to the Borrower from a Subsidiary of the Borrower (other than the Subsidiaries listed on Schedule
VII) (any and all of such accounts, chattel paper, instruments, general intangibles and other obligations, to the extent not referred to in clause
(b), (c) or (d) below, being the "Receivables", and any and all such supporting obligations, security agreements, mortgages, Liens, leases, letters of credit and other contracts being the "Related Contracts");

(b) the following (the "Security Collateral"):

(i) the Initial Pledged Equity and the certificates, if any, representing the Initial Pledged Equity, and all dividends, distributions, return of capital, 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 the Initial Pledged Equity and all subscription warrants, rights or options issued thereon or with respect thereto;

(ii) in the case of the Borrower, the Initial Pledged Debt and the instruments, if any, evidencing the Initial Pledged Debt, and all interest, 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 the Initial Pledged Debt;

(iii) all additional shares of stock and other Equity Interests of or in any issuer of the Initial Pledged Equity or any successor entity from time to time acquired by such Grantor in any manner and all additional shares of stock or Equity Interests of or in any new direct Subsidiary (other than a Non-Pledged Subsidiary) of such Grantor formed or acquired by such Grantor in any manner after the date of this Agreement (such shares and other Equity Interests, together with the Initial Pledged Equity, being the "Pledged Equity"), and the certificates, if any, representing such additional shares or other Equity Interests, and all dividends, distributions, return of capital, 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 shares or other Equity Interests and all subscription warrants, rights or options issued thereon or with respect thereto;

(iv) all additional indebtedness from time to time owed to the Borrower by any obligor of the Initial Pledged Debt or any successor entity (such indebtedness, together with the Initial Pledged Debt, being the "Pledged Debt") and the instruments, if any, evidencing such indebtedness, and all interest, 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 indebtedness;

(v) in the case of the Borrower, the Securities Accounts, all Pledged Security Entitlements with respect to all Pledged Financial Assets from time to time credited to the Securities Accounts, and all Pledged Financial Assets, and all dividends, distributions, return of capital, interest, 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 Pledged Security Entitlements or such Pledged Financial Assets and all subscription warrants, rights or options issued thereon or with respect thereto; and

(vi) all other investment property (including, without limitation, all (A) securities, whether certificated or uncertificated, (B) security entitlements and (C) securities accounts) in which the Borrower has now, or acquires from time to time hereafter, any right, title or interest in any manner, and the certificates or

instruments, if any, representing or evidencing such investment property, and all dividends, distributions, return of capital, interest, distributions, value, 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 investment property and all subscription warrants, rights or options issued thereon or with respect thereto;

provided, however, that if any time after the date of this Agreement the Borrower obtains the appropriate consents and regulatory approvals with respect to AES Oasis Finco Inc. and AES Oasis Holdco Inc., the Equity Interests in AES Oasis Finco, Inc. and AES Oasis Holdco, Inc. shall be pledged to the extent permissible at such time;

(c) in the case of the Borrower each of the agreements listed on Schedule III hereto (collectively, the "Assigned Agreements"), including, without limitation, (i) all rights of the Borrower to receive moneys due and to become due under or pursuant to the Assigned Agreements, (ii) all rights of the Borrower to receive proceeds of any insurance, indemnity, warranty or guaranty with respect to the Assigned Agreements, (iii) claims of the Borrower for damages arising out of or for breach of or default under the Assigned Agreements and (iv) the right of the Borrower to terminate the Assigned Agreements, to perform thereunder and to compel performance and otherwise exercise all remedies thereunder (all such Collateral being the "Agreement Collateral");

(d) the following (collectively, the "Account Collateral"):

(i) in the case of the Borrower, the Deposit Accounts and all funds and financial assets from time to time credited thereto (including, without limitation, all Cash Equivalents, 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 Deposit Accounts);

(ii) all promissory notes, certificates of deposit, deposit accounts, checks and other instruments from time to time delivered to or otherwise possessed by the Collateral Trustees for or on behalf of the Borrower, including, without limitation, those delivered or possessed in substitution for or in addition to any or all of the then existing Account Collateral; and

(iii) 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 the then existing Account Collateral; and

(e) all proceeds of, collateral for, income, and other payments now or hereafter due and payable with respect to, and supporting obligations relating to, any and all of the Collateral (including, without limitation, proceeds, collateral and supporting obligations that constitute property of the types described in clauses (a) through (d) of this Section 1 and this clause (e)) and, to the extent not otherwise included, all

(A) payments under insurance (whether or not the Collateral Trustees are the loss payee thereof), or any indemnity, warranty or guaranty, payable by reason of loss or damage to or otherwise with respect to any of the foregoing Collateral, (B) tort claims, including, without limitation, all commercial tort claims and (C) cash.

Notwithstanding the foregoing provisions of this Section 1 or of any other Secured Agreement, the grant of a security interest as provided herein shall not extend to, and the term "Collateral" shall not include, as to each Grantor, more than 65% of the outstanding voting stock of any CFC (the "Excluded Assets").

Section 2. Security for Obligations. This Agreement secures the payment of all of the Secured Obligations of the Borrower. Without limiting the generality of the foregoing, this Agreement secures, as to each Grantor, the payment of all amounts that constitute part of the Secured Obligations and would be owed by such Grantor to any Secured Holder but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving any Grantor.

Section 3. Grantors Remain Liable. Anything herein to the contrary notwithstanding, (a) each Grantor shall remain liable under the contracts and agreements included in such Grantor's Collateral to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by the Collateral Trustees of any of the rights hereunder shall not release any Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral and (c) none of the Collateral Trustees, any Representative or any Secured Holder shall have any obligation or liability under the contracts and agreements included in the Collateral by reason of this Agreement or any other Secured Agreement, nor shall any of the Collateral Trustees, any Representative or any Secured Holder be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder or thereunder.

Section 4. Delivery and Control of Security Collateral. (a) All certificates or instruments representing or evidencing Security Collateral shall be delivered to and held by or on behalf of the Collateral Trustees pursuant to this Agreement and the Collateral Trust Agreement and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Collateral Trustees. The Collateral Trustees shall have the right, at any time after the occurrence and during the continuance of a Collateral Trust Agreement Default, in their discretion and without notice to any Grantor, to transfer to or to register in the name of the Collateral Trustees or any of their nominees any or all of the Security Collateral, subject only to the revocable rights specified in Section 10, and subject to the Remedies Limitations (as defined in Section 7(i)). In addition, the Collateral Trustees shall have the right at any time, after the occurrence and during the continuance of a Collateral Trust Agreement Default, to exchange certificates or instruments representing or evidencing Security Collateral for certificates or instruments of smaller or larger denominations. Also, the Collateral Trustee shall have the right at any time, after the occurrence and during the continuance of a Collateral Trust Agreement Default, to convert Security Collateral consisting of financial assets credited to the Securities Accounts to Security Collateral consisting of financial assets held directly by the Collateral Trustee.

(b) With respect to any Security Collateral in which any Grantor has any right, title or interest and that constitutes an uncertificated security, subject to the Remedies Limitations, such Grantor will cause the issuer thereof either (i) to register the Collateral Trustees as the registered owners of such security or (ii) to agree in an authenticated record with such Grantor and the Collateral Trustees that such issuer will comply with instructions with respect to such security originated by the Collateral Trustees without further consent of such Grantor, such authenticated record to be in form and substance satisfactory to the Collateral Trustees. With respect to any Security Collateral in which any Grantor has any right, title or interest and that is not an uncertificated security, upon the request of the Collateral Trustees, such Grantor will notify each such issuer of Pledged Equity that such Pledged Equity is subject to the security interest granted hereunder and the Borrower will notify each such issuer of Pledged Debt that such Pledged Debt is subject to the security interest granted hereunder.

(c) With respect to any Security Collateral in which the Borrower has any right, title or interest and that constitutes a security entitlement in which the Collateral Trustees are not the entitlement holders, the Borrower will cause the securities intermediary with respect to such security entitlement either (i) to identify in its records the Collateral Trustees as the entitlement holders of such security entitlement against such securities intermediary or (ii) to agree in an authenticated record with the Borrower and the Collateral Trustees that such securities intermediary will comply with entitlement orders (that is, notifications communicated to such securities intermediary directing transfer or redemption of the financial asset to which such Grantor has a security entitlement) originated by the Collateral Trustees upon the occurrence and during the continuance of a Collateral Trust Agreement Default, without further consent of such Grantor, such authenticated record to be in substantially the form of Exhibit D hereto or otherwise in form and substance satisfactory to the Collateral Trustees (such agreement being a "Securities Account Control Agreement").

(d) The Borrower agrees that it will not add any securities intermediary that maintains a securities account for the Borrower or open any new securities account with any then existing Securities Intermediary unless (i) the Collateral Trustees and the Required Representatives shall have received at least 10 days' prior written notice of such additional securities intermediary or such new securities account and (ii) the Collateral Trustees shall have received, in the case of a Securities Account that is maintained by a Securities Intermediary that is not the Corporate Trustee, a Securities Account Control Agreement authenticated by such new securities intermediary and the Borrower, or a supplement to an existing Securities Account Control Agreement with such then existing Securities Intermediary, covering such new securities account (and, upon the receipt by the Collateral Trustees of such Securities Account Control Agreement or supplement, Schedule VI hereto shall be automatically amended to include such new Securities Account). The Borrower agrees that it will not terminate any Securities Account, except that the Borrower may terminate a Securities Account, if it gives the Collateral Trustees and the Required Representatives at least 10 days' prior written notice of such termination (and, upon such termination, Schedule VI hereto shall be automatically amended to delete such Securities Intermediary and Securities Account). The Borrower will not change or add any securities intermediary that maintains any securities account in which any of the Collateral is credited or carried, or change or add any such securities account, in each case without first complying with the provisions of this
Section 4 in order to continuously perfect the security interest granted hereunder in such Collateral.

(e) The Borrower shall, with respect to each Securities Account set forth on Part B of Schedule VIII hereto (the "Other Securities Accounts"), within 7 days of the date of this Agreement (x) terminate such Other Securities Account, at which time Schedule VI and Part B of Schedule VIII hereto shall be automatically amended to delete such Securities Account and Other Securities Account, respectively or (y) enter into a Securities Account Control Agreement with respect to such Other Securities Account, at which time Part B of Schedule VIII shall be automatically amended to delete such Other Securities Account.

(f) Upon any termination by the Borrower of any Securities Account by the Borrower, or any Securities Intermediary with respect thereto, the Borrower will immediately transfer all funds and property held in such terminated Securities Account to another Securities Account listed in Schedule VI.

(g) Upon the occurrence and during the continuance of a Collateral Trust Agreement Default, the Collateral Trustees shall have the right to originate a Notice of Exclusive Control (as such term is defined in the applicable Securities Account Control Agreement) with respect to any Securities Account and thereafter shall have the sole and exclusive right to direct the disposition of the funds and assets with respect to any such Securities Account.

Section 5. Maintaining the Account Collateral. So long as any of the Secured Obligations remain outstanding, any Revolving Letter of Credit or the Drax Letter of Credit shall be outstanding, or any Revolving Credit Loan Bank has a Revolving Credit Loan Commitment:

(a) The Borrower will maintain all Account Collateral only with the Corporate Trustee or with banks (the "Pledged Account Banks") that have agreed, in a record authenticated by the Borrower, the Collateral Trustees and the Pledged Account Banks, to (i) comply with instructions originated by the Collateral Trustees directing the disposition of funds in the Account Collateral without the further consent of the Borrower upon the receipt by the applicable Pledge Account Bank of a Notice of Exclusive Control (as defined in the applicable Account Control Agreement referred to below) and (ii) waive or subordinate in favor of the Collateral Trustees all claims of the Pledged Account Banks (including, without limitation, claims by way of a security interest, lien or right of setoff or right of recoupment but subject to such exceptions as may be agreed) to the Account Collateral, which authenticated record shall be substantially in the form of Exhibit B hereto, or shall otherwise be in form and substance satisfactory to the Collateral Trustees (the "Account Control Agreement").

(b) The Borrower will cause each Person obligated at any time to make any payment to the Borrower for any reason (an "Obligor") to make such payment to a Deposit Account.

(c) The Borrower agrees that it will not add any bank that maintains a deposit account for the Borrower or open any new deposit account with any then existing Pledged Account Bank unless (i) the Collateral Trustees and the Required Representatives shall have received at least 10 days' prior written notice of such additional bank or such new deposit account and (ii) the Collateral Trustees shall have received, in the case of a bank or Pledged Account Bank that is not the Corporate

Trustee, an Account Control Agreement authenticated by such new bank and the Borrower, or a supplement to an existing Account Control Agreement with such then existing Pledged Account Bank, covering such new deposit account (and, upon the receipt by the Collateral Trustees of such Account Control Agreement or supplement, Schedule V hereto shall be automatically amended to include such new Deposit Account). The Borrower agrees that it will not terminate any bank as a Pledged Account Bank or terminate any Account Collateral, except that the Borrower may terminate a Deposit Account, and terminate a bank as a Pledged Account Bank with respect to a Deposit Account, if it gives the Collateral Trustees and the Required Representatives at least 10 days' prior written notice of such termination (and, upon such termination, Schedule V hereto shall be automatically amended to delete such Pledged Account Bank and Deposit Account). The Borrower will not change or add any bank that maintains any deposit account in which any of the Account Collateral is credited or carried, or change or add any such deposit account, in each case without first complying with the provisions of this Section 5 in order to continuously perfect the security interest granted hereunder in such Account Collateral.

(d) Upon any termination by the Borrower of any Deposit Account by the Borrower, or any Pledged Account Bank with respect thereto, the Borrower will immediately (i) transfer all funds and property held in such terminated Deposit Account to another Deposit Account listed in Schedule V and (ii) notify all Obligors that were making payments to such Deposit Account to make all future payments to another Deposit Account listed in Schedule V hereto, in each case so that the Collateral Trustees shall have a continuously perfected security interest in such Account Collateral, funds and property.

(e) The Borrower shall, with respect to each Deposit Account set forth on Part A of Schedule VIII hereto (the "Other Deposit Accounts"), within 7 days of the date of this Agreement (x) terminate such Other Deposit Account, at which time Schedule V and Part A of Schedule VIII hereto shall be automatically amended to delete such Deposit Account and Other Deposit Account, respectively or (y) enter into an Account Control Agreement with respect to such Other Deposit Account, at which time Part A of Schedule VIII shall be automatically amended to delete such Other Deposit Account.

(f) Upon the occurrence and during the continuance of a Collateral Trust Agreement Default, the Collateral Trustees shall have the right to originate a Notice of Exclusive Control (as such term is defined in the applicable Account Control Agreement) with respect to any Deposit Account and thereafter shall have the sole and exclusive right at such time to direct the disposition of funds with respect to the applicable the Deposit Accounts.

Section 6. Maintaining Letter-of-Credit Rights. So long as any of the Secured Obligations remain outstanding, any Revolving Letter of Credit or the Drax Letter of Credit shall be outstanding, or any Revolving Credit Loan Bank has a Revolving Credit Loan Commitment, each Grantor will maintain all letter-of-credit rights assigned to the Collateral Trustees so that the Collateral Trustees have control of the letter-of-credit rights in the manner specified in Section 9-107 of the UCC.

Section 7. Representations and Warranties. Each Grantor represents and warrants as follows:

(a) Such Grantor's exact legal name, as defined in Section 9-503(a) of the UCC, is correctly set forth in Schedule I hereto. Such Grantor is located (within the meaning of Section 9-307 of the UCC) in the state or jurisdiction set forth on Schedule I hereto. In the case of the Borrower, the Borrower has its chief executive office and the office in which it maintains the original copies of each Assigned Agreement and Related Contract to which the Borrower is a party and all originals of all chattel paper that evidence Receivables of the Borrower, in the state or jurisdiction set forth in Schedule I hereto. The information set forth in Schedule I hereto with respect to such Grantor is true and accurate in all respects. Such Grantor has not previously changed its name, location, chief executive office, place where it maintains its agreements, type of organization, jurisdiction of organization or organizational identification number from those set forth in Schedule I hereto except as disclosed in Schedule IV hereto.

(b) Such Grantor is the legal and beneficial owner of the Collateral of such Grantor free and clear of any Lien, claim, option or right of others, except for the security interest created under this Agreement or permitted under the Credit Agreement. No effective financing statement or other instrument similar in effect covering all or any part of such Collateral or listing such Grantor or any trade name of such Grantor as debtor is on file in any recording office, except such as may have been filed in favor of the Collateral Trustees relating to the Secured Agreements.

(c) The Pledged Equity pledged by such Grantor hereunder has been duly authorized and validly issued and is fully paid and non-assessable. With respect to the Pledged Equity that is an uncertificated security, subject to the Remedies Limitations, such Grantor has caused the issuer thereof either (i) to register the Collateral Trustees as the registered owners of such security or (ii) to agree in an authenticated record with such Grantor and the Collateral Trustees that such issuer will comply with instructions with respect to such security originated by the Collateral Trustees without further consent of such Grantor. If such Grantor is an issuer of Pledged Equity, such Grantor confirms that it has received notice of such security interest. In the case of the Borrower, the Pledged Debt pledged by the Borrower hereunder has been duly authorized, authenticated or issued and delivered, is the legal, valid and binding obligation of the issuers thereof, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law, is evidenced by one or more promissory notes (which notes have been delivered to the Collateral Trustees) and as of the date hereof is not in default. All Security Collateral consisting of certificated securities and instruments have been delivered to the Collateral Trustees.

(d) The Initial Pledged Equity pledged by such Grantor constitutes the percentage of the issued and outstanding Equity Interests of the issuers thereof indicated on Schedule II hereto. In the case of the Borrower, the Initial Pledged Debt constitutes all of the outstanding indebtedness owed to the Borrower by the issuers thereof and is outstanding in the principal amount indicated on Schedule II hereto.

(e) In the case of the Borrower, the Assigned Agreements to which the Borrower is a party, true and complete copies of which have been furnished to the Collateral Trustees, have been duly authorized, executed and delivered by all parties thereto, have not been amended, amended and restated, supplemented or otherwise modified, are in full force and effect and are binding upon and enforceable against the Borrower, and to the Borrower's knowledge, all parties thereto in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. There exists no default as of the date hereof under any Assigned Agreement to which the Borrower is a party by any party thereto. Other than the Borrower, each party to the Assigned Agreements listed on Schedule III hereto which requires such parties' consent for assignment and to which the Borrower is a party has executed and delivered to the Borrower a consent, in substantially the form of Exhibit C hereto or otherwise in form and substance satisfactory to the Collateral Trustees, to the assignment of the Agreement Collateral to the Collateral Trustees pursuant to this Agreement.

(f) In the case of the Borrower, the Borrower has no deposit accounts, other than the Account Collateral listed on Schedule V hereto, as such Schedule V may be amended from time to time pursuant to Section
5(d), and legal, binding and enforceable Account Control Agreements are in effect for each deposit account that constitutes Account Collateral (other than Account Collateral consisting of Deposit Accounts maintained with the Corporate Trustees or the Other Deposit Accounts), except to the extent such Account Control Agreements are not required by Section 5(a). The Borrower has instructed all existing Obligors to make all payments to a Deposit Account.

(g) In the case of the Borrower, the Borrower has no deposit accounts, other than the Other Deposit Accounts listed on Part A of Schedule VIII hereto, as Part A of Schedule VIII hereto may be amended from time to time pursuant to Section 5(d), which are not the subject of a legal, binding and enforceable Account Control Agreement.

(h) In the case of the Borrower, the Borrower has no securities accounts, other than the Securities Accounts listed on Schedule VI hereto, as such Schedule VI may be amended from time to time pursuant to Section
4(d), and legal, binding and enforceable Securities Account Control Agreements are in effect for each securities account that constitutes Security Collateral (other than Security Collateral maintained with the Corporate Trustee in the Collateral Account or the Other Securities Accounts), except to the extent such Securities Account Control Agreements are not required by Section 4(c).

(i) In the case of the Borrower, the Borrower has no securities accounts, other than the Other Securities Accounts listed on Part B of Schedule VIII hereto, as Part B of Schedule VIII hereto may be amended from time to time pursuant to Section 4(e), which are not the subject of a legal, binding and enforceable Securities Account Control Agreement.

(j) All filings and other actions (including, without limitation, actions necessary to obtain control of Collateral as provided in Sections 9-104, 9-105, 9-106 and

9-107 of the UCC) necessary to perfect the security interest in the Collateral of such Grantor created under this Agreement have been duly made or taken and are in full force and effect, and this Agreement creates in favor of the Collateral Trustees for the benefit of the Representatives and the Secured Holders a valid and, together with such filings and other actions, perfected first priority security interest in the Collateral of such Grantor, securing the payment of the Secured Obligations.

(k) (i) The execution, delivery, recordation, filing or performance by such Grantor of this Agreement, (ii) the grant by such Grantor of the Liens granted by it pursuant to this Agreement, (iii) the perfection or maintenance of the Liens created under this Agreement (including the first priority nature thereof), (iv) the exercise by the Collateral Trustees of their voting or other rights provided for in this Agreement and (v) the exercise by the Collateral Trustees of their remedies in respect of the Collateral pursuant to this Agreement and the other Shared Collateral Documents, will 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 (x) than such filings required in order to perfect any security interest granted by this Agreement, (y) the actions described in Section 4 with respect to the Security Collateral, which actions have been taken and are in full force and effect and (z) any other 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 will 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 or any of the Pledged Subsidiaries or any agreement, indenture or other instrument to which the Borrower or any of the Pledged Subsidiaries is a party or by which the Borrower or any of the Pledged Subsidiaries or any of the Borrower's or any of the Pledged Subsidiaries' respective property is bound, or violate or conflict with any laws, administrative regulations or rulings or court decrees applicable to the Borrower, any of the Pledged Subsidiaries or the Borrower's or any of the 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, (A) 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 the failure to obtain such approval or consent could result in a default under, or breach of, agreements or other legal obligations of such Subsidiary and (B) disposition of any of the Security Collateral may be subject to the receipt of regulatory approvals and to laws affecting the offering and sale of securities generally (the exceptions described in the foregoing clauses (A) and (B) are referred to as "Remedies Limitations").

Section 8. Further Assurances. (a) Subject to the Remedies Limitations, each Grantor agrees that from time to time, at the expense of such Grantor, such Grantor will promptly execute and deliver, or otherwise authenticate, all further instruments and documents, and take all further action that may be necessary or desirable, or that the Collateral Trustees may request and that is within the power of such Grantor, consistent with its currently existing contractual and other legal obligations, in order to perfect any pledge, assignment or security interest granted or purported to be granted by such Grantor hereunder or to enable the Collateral

Trustees to exercise and enforce their rights and remedies hereunder and under the other Shared Collateral Documents with respect to any Collateral of such Grantor. Without limiting the generality of the foregoing, each Grantor will promptly with respect to Collateral of such Grantor: (i) mark conspicuously each chattel paper included in Receivables, each Related Contract and, at the request of the Collateral Trustees, each of its records pertaining to such Collateral with a legend, in form and substance satisfactory to the Collateral Trustees, indicating that such chattel paper, Related Contract, Assigned Agreement or Collateral is subject to the security interest granted hereby; provided, however, that no such legend shall be required if such Collateral is delivered to the Collateral Trustees pursuant to clause (ii) below, (ii) if any such Collateral shall be evidenced by a promissory note or other instrument or chattel paper, deliver and pledge to the Collateral Trustees hereunder such note or instrument or chattel paper duly indorsed or accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to the Collateral Trustees, (iii) execute or authenticate and file such financing or continuation statements, or amendments thereto, and such other instruments or notices, as may be necessary or desirable, or as the Collateral Trustees may request, in order to perfect the security interest granted or purported to be granted by such Grantor hereunder, (iv) deliver and pledge to the Collateral Trustees for the ratable benefit of the Representatives and the Secured Holders certificates representing Security Collateral that constitutes certificated securities, accompanied by undated stock or bond powers executed in blank, (v) take all action necessary to ensure that the Collateral Trustees have control of Collateral consisting of deposit accounts, investment property, letter-of-credit rights and transferable records as provided in Sections 9-104, 9-105, 9-106 and 9-107 of the UCC, and (vi) deliver to the Collateral Trustees evidence that all other action that the Collateral Trustees may deem reasonably necessary or desirable in order to perfect the security interest created by such Grantor under this Agreement and the other Shared Collateral Documents has been taken.

(b) (i) Each Grantor hereby authorizes the Collateral Trustees to file one or more financing or continuation statements relating to all or any part of the Collateral of such Grantor, and amendments thereto to correct the name and address of the Grantor or the Collateral Trustees or to correct the description of the Collateral contained therein to be consistent with the description of the Collateral contained in this Agreement, in each case without the signature of such Grantor where permitted by law and which shall be filed by the Collateral Trustees upon the receipt of an instruction letter from the Required Representatives requesting the taking of such action and attaching the form of financing statement. A photocopy or other reproduction of this Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law.

(ii) Each Grantor ratifies its authorization for the Collateral Trustees to have filed such financing statements, continuation statements or amendments, to the extent such amendments are permitted pursuant to clause (i) above, filed prior to the date hereof.

(c) Each Grantor will furnish to the Collateral Trustees from time to time statements and schedules further identifying and describing the Collateral of such Grantor and such other reports in connection with such Collateral as the Collateral Trustees may reasonably request, all in reasonable detail.

Section 9. Post-Closing Changes; Collections on Assigned Agreements, Receivables and Related Contracts. (a) No Grantor will change its name, type of organization, jurisdiction of organization, organizational identification number or location from those set forth in Section 7(a) of this Agreement without first giving at least 30 days' prior written notice to the Collateral Trustees and taking all action required by the Collateral Trustees for the purpose of perfecting or protecting the security interest granted by this Agreement. The Borrower will not change the location of the place where it keeps the originals of the Assigned Agreements and Related Contracts to which the Borrower is a party and all originals of all chattel paper that evidence Receivables of the Borrower from the locations therefor specified in Section 7(a) without first giving the Collateral Trustees 30 days' prior written notice of such change. No Grantor will become bound by a security agreement authenticated by another Person (determined as provided in Section 9-203(d) of the UCC) without giving the Collateral Trustees 30 days' prior written notice thereof and taking all action required by the Collateral Trustees to ensure that the perfection and first priority nature of the Collateral Trustees' security interest in the Collateral will be maintained. Each Grantor will hold and preserve its records relating to the Collateral, including, without limitation, the Assigned Agreements and Related Contracts, and will permit representatives of the Collateral Trustees at any time during normal business hours to inspect and make abstracts from such records and other documents. If the Grantor does not have an organizational identification number and later obtains one, it will forthwith notify the Collateral Trustees of such organizational identification number.

(b) Except as otherwise provided in this subsection (b), each Grantor will continue to collect, at its own expense, all amounts due or to become due such Grantor under the Assigned Agreements, Receivables and Related Contracts. In connection with such collections, such Grantor may take (and, at the Collateral Trustees' direction, will take) such action as such Grantor may deem necessary or advisable to enforce collection of the Assigned Agreements, Receivables and Related Contracts; provided, however, that the Collateral Trustees shall have the right at any time, upon the occurrence and during the continuance of an Collateral Trust Agreement Default and upon written notice to such Grantor of its intention to do so, to notify the Obligors under any Assigned Agreements, Receivables and Related Contracts of the assignment of such Assigned Agreements, Receivables and Related Contracts to the Collateral Trustees and to direct such Obligors to make payment of all amounts due or to become due to such Grantor thereunder directly to the Collateral Trustees and, upon such notification and at the expense of such Grantor, to enforce collection of any such Assigned Agreements, Receivables and Related Contracts, to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same extent as such Grantor might have done, and to otherwise exercise all rights with respect to such Assigned Agreements, Receivables and Related Contracts, including, without limitation, those set forth set forth in Section 9-607 of the UCC. After receipt by any Grantor of the notice from the Collateral Trustees referred to in the proviso to the preceding sentence, (i) all amounts and proceeds (including, without limitation, instruments) received by such Grantor in respect of the Assigned Agreements, Receivables and Related Contracts of such Grantor shall be received in trust for the benefit of the Collateral Trustees hereunder, shall be segregated from other funds of such Grantor and shall be forthwith paid over to the Collateral Trustees in the same form as so received (with any necessary indorsement) to be held as cash collateral in the Collateral Account and either (A) released to such Grantor so long as no Collateral Trust Agreement Default shall have occurred and be continuing or (B) upon the occurrence and during the continuance of a Collateral Trust Agreement Default, the Collateral Trustees shall, upon

receipt of a written notice from the Required Representatives, apply such cash collateral as provided in the Collateral Trust Agreement and (ii) such Grantor will not adjust, settle or compromise the amount or payment of any Receivable or amount due on any Assigned Agreement or Related Contract, release wholly or partly any Obligor thereof, or allow any credit or discount thereon. No Grantor will permit or consent to the subordination of its right to payment under any of the Assigned Agreements, Receivables and Related Contracts to any other indebtedness or obligations of the Obligor thereof.

Section 10. Voting Rights; Dividends; Etc. (a) So long as no Collateral Trust Agreement Default shall have occurred and be continuing:

(i) Each Grantor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Security Collateral of such Grantor or any part thereof for any purpose; provided, however, that such Grantor will not exercise or refrain from exercising any such right if such action would have a material adverse effect on the value of the Security Collateral or any part thereof.

(ii) Each Grantor shall be entitled to receive and retain any and all dividends, interest and other distributions paid in respect of the Security Collateral of such Grantor if and to the extent that the payment thereof is not otherwise prohibited by the terms of the Applicable Agreements; provided, however, that any and all dividends, interest and other distributions paid or payable other than in cash in respect of, and instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for, any Security Collateral, shall be, and shall be forthwith delivered to the Collateral Trustees to hold as Security Collateral and shall, if received by such Grantor, be received in trust for the benefit of the Collateral Trustees, be segregated from the other property or funds of such Grantor and be forthwith delivered to the Collateral Trustees as Security Collateral in the same form as so received (with any necessary indorsement).

(iii) The Collateral Trustees will execute and deliver (or cause to be executed and delivered) to each Grantor all such proxies and other instruments as such Grantor may reasonably request for the purpose of enabling such Grantor to exercise the voting and other rights that it is entitled to exercise pursuant to paragraph (i) above and to receive the dividends or interest payments that it is authorized to receive and retain pursuant to paragraph (ii) above.

(b) Upon the occurrence and during the continuance of a Collateral Trust Agreement Default:

(i) All rights of each Grantor (x) to exercise or refrain from exercising the voting and other consensual rights that it would otherwise be entitled to exercise pursuant to Section 10(a)(i) shall, upon notice to such Grantor by the Collateral Trustees, cease and (y) to receive the dividends, interest and other distributions that it would otherwise be authorized to receive and retain pursuant to Section 10(a)(ii) shall automatically cease, and, subject to the Remedies Limitations, all such rights shall thereupon become vested in the Collateral Trustees, who shall thereupon have the sole right to exercise or refrain from exercising such voting and other consensual rights and to receive and hold as

Collateral such dividends, interest and other distributions and shall deposit the same into the Collateral Account; and

(ii) All dividends, interest and other distributions that are received by any Grantor contrary to the provisions of paragraph (i) of this Section 10(b) shall be received in trust for the benefit of the Collateral Trustees, shall be segregated from other funds of such Grantor and shall be forthwith paid over to the Collateral Trustees to be deposited into the Collateral Account.

Section 11. As to the Assigned Agreements. (a) The Borrower will at its expense:

(i) perform and observe all terms and provisions of the Assigned Agreements to be performed or observed by it, maintain the Assigned Agreements to which it is a party in full force and effect, enforce the Assigned Agreements to which it is a party in accordance with the terms thereof and take all such action to such end as may be requested from time to time by the Collateral Trustees; and

(ii) furnish to the Collateral Trustees promptly upon receipt thereof copies of all notices, requests and other documents received by the Borrower under or pursuant to the Assigned Agreements to which it is a party, and from time to time (A) furnish to the Collateral Trustees such information and reports regarding the Assigned Agreements and such other Collateral of the Borrower as the Collateral Trustees may reasonably request and (B) upon request of the Collateral Trustees make to each other party to any Assigned Agreement to which it is a party such demands and requests for information and reports or for action as the Borrower is entitled to make thereunder.

(b) The Borrower agrees that it will not, except to the extent otherwise permitted under the Applicable Agreements:

(i) cancel or terminate any Assigned Agreement to which it is a party or consent to or accept any cancellation or termination thereof;

(ii) amend, amend and restate, supplement or otherwise modify any such Assigned Agreement or give any consent, waiver or approval thereunder;

(iii) waive any default under or breach of any such Assigned Agreement; or

(iv) take any other action in connection with any such Assigned Agreement that would impair the value of the interests or rights of the Borrower thereunder or that would impair the interests or rights of any Applicable Holder.

Section 12. Payments Under the Assigned Agreements; Letters of Credit. (a) The Borrower agrees, and has effectively so instructed each other party to each Assigned Agreement to which it is a party, that all payments due or to become due under or in connection with such Assigned Agreement will be made directly to a Deposit Account.

(b) Upon the occurrence of a Collateral Trust Agreement Default, each Grantor will, promptly upon request by the Collateral Trustees, (i) notify (and such Grantor hereby authorizes the Collateral Trustees to notify) the issuer and each nominated person with respect to each of the Related Contracts consisting of letters of credit that the proceeds thereof have been assigned to the Collateral Trustees hereunder and any payments due or to become due in respect thereof are to be made directly to the Collateral Trustees or their designee and (ii) arrange for the Collateral Trustees to become the transferee beneficiaries of letters of credit.

Section 13. Transfers and Other Liens; Additional Shares. (a) Each Grantor agrees that it will not (i) sell, assign or otherwise dispose of, or grant any option with respect to, any of the Collateral, other than sales, assignments and other dispositions of Collateral, and options relating to Collateral, permitted under the terms of the Applicable Agreements or (ii) create or suffer to exist any Lien upon or with respect to any of the Collateral of such Grantor except for the pledge, assignment and security interest created under this Agreement, and permitted under the Credit Agreement or any other Applicable Agreements.

(b) Each Grantor agrees that it will (i) cause each issuer of the Pledged Equity pledged by such Grantor not to issue any Equity Interests or other securities in substitution for the Pledged Equity issued by such issuer, except to such Grantor and (ii) pledge hereunder, immediately upon its acquisition (directly or indirectly) thereof, any and all additional Equity Interests or other securities of each issuer of the Pledged Equity issued to such Grantor.

Section 14. Collateral Trustees May Perform. If any Grantor fails to perform any agreement contained herein, the Collateral Trustees may, but without any obligation to do so and without notice, themselves perform, or cause performance of, such agreement, and the expenses of the Collateral Trustees incurred in connection therewith shall be payable by such Grantor under Section 16.

Section 15. Remedies. If a Collateral Trust Agreement Default shall have occurred and be continuing:

(a) Subject to the Remedies Limitations, the Collateral Trustees may with the consent of the Required Representatives, and shall at the request of the Required Representatives, exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party upon default under the UCC (whether or not the UCC applies to the affected Collateral) and also may: (i) require each Grantor to, and each Grantor hereby agrees that it will at its expense and upon request of the Collateral Trustees forthwith, assemble all or part of the Collateral as directed by the Collateral Trustees and make it available to the Collateral Trustees at a place and time to be designated by the Collateral Trustees that is reasonably convenient to all parties, (ii) without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Collateral Trustees' offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Collateral Trustees may deem commercially reasonable, and (iii) exercise any and all rights and remedies of any of the Grantors under or in connection with the Collateral, or otherwise in respect of the Collateral, including, without limitation, (A) any and all rights of such Grantor to demand

or otherwise require payment of any amount under, or performance of any provision of, the Assigned Agreements, the Receivables, the Related Contracts and the other Collateral, (B) withdraw, or cause or direct the withdrawal, of all funds with respect to the Account Collateral and (C) exercise all other rights and remedies with respect to the Assigned Agreements, the Receivables, the Related Contracts and the other Collateral, including, without limitation, those set forth in Section 9-607 of the UCC. Each Grantor agrees that, to the extent notice of sale shall be required by law, at least ten days' notice to such Grantor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Collateral Trustees shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Collateral Trustees may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.

(b) Any cash held by or on behalf of the Collateral Trustees and all cash proceeds received by or on behalf of the Collateral Trustees in respect of any sale of, collection from, or other realization upon all or any part of the Collateral may, in the discretion of the Collateral Trustees, be held by the Collateral Trustees as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to the Collateral Trustees pursuant to Section 16) in whole or in part by the Collateral Trustees for the ratable benefit of the Representatives and the Secured Holders against, all or any part of the Secured Obligations, in accordance with the terms of the Collateral Trust Agreement.

(c) All payments received by the Borrower under or in connection with any Assigned Agreement or otherwise in respect of the Collateral shall be received in trust for the benefit of the Collateral Trustees, shall be segregated from other funds of such Grantor and shall be forthwith paid over to the Collateral Trustees in the same form as so received (with any necessary indorsement).

(d) The Collateral Trustees may, without notice to the Borrower except as required by law and at any time or from time to time, charge, set-off and otherwise apply all or any part of the Secured Obligations against any funds held in the Collateral Account or in any other deposit account of the Borrower in accordance with clause (b) above.

(e) If the Collateral Trustees shall determine to exercise their right to sell all or any of the Security Collateral of any Grantor pursuant to this Section 15, each Grantor agrees that, upon request of the Collateral Trustees and subject to the Remedies Limitations, such Grantor will, at its own expense:

(i) execute and deliver, and cause each issuer of such Security Collateral contemplated to be sold and the directors and officers thereof to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts and things, as may be necessary or, in the opinion of the Collateral Trustees, advisable to register such Security Collateral under the provisions of the Securities Act of 1933 (as amended from time to time, the

"Securities Act"), to cause the registration statement relating thereto to become effective and to remain effective for such period as prospectuses are required by law to be furnished and to make all amendments and supplements thereto and to the related prospectus that, in the opinion of the Collateral Trustees, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto;

(ii) use its best efforts to qualify the Security Collateral under the state securities or "Blue Sky" laws and to obtain all necessary governmental approvals for the sale of such Security Collateral, as requested by the Collateral Trustees;

(iii) cause each such issuer of such Security Collateral to make available to its security holders, as soon as practicable, an earnings statement that will satisfy the provisions of Section 11(a) of the Securities Act;

(iv) provide the Collateral Trustees with such other information and projections as may be necessary or, in the opinion of the Collateral Trustees, advisable to enable the Collateral Trustees to effect the sale of such Security Collateral; and

(v) do or cause to be done all such other acts and things as may be necessary to make such sale of such Security Collateral or any part thereof valid and binding and in compliance with applicable law.

(f) The Collateral Trustees are authorized, in connection with any sale of the Security Collateral pursuant to this Section 16, to deliver or otherwise disclose to any prospective purchaser of the Security Collateral: (i) any registration statement or prospectus, and all supplements and amendments thereto, prepared pursuant to subsection (e)(i) above, (ii) any information and projections provided to it pursuant to subsection (e)(iv) above and (iii) any other information in its possession relating to such Security Collateral.

(g) Each Grantor acknowledges the impossibility of ascertaining the amount of damages that would be suffered by the Secured Holders by reason of the failure by such Grantor to perform any of the covenants contained in subsection (e) above and, consequently, agrees that, if such Grantor shall fail to perform any of such covenants, it will pay, as liquidated damages and not as a penalty, an amount equal to the value of the Security Collateral on the date the Collateral Trustees shall demand compliance with subsection (e) above.

Section 16. Indemnity and Expenses. (a) Each Grantor agrees to indemnify, defend and save and hold harmless the Collateral Trustees, each Representative and each Secured Holder and each of their Affiliates and their respective officers, directors, employees, agents and advisors (each, an "Indemnified Party") from and against, and shall pay on demand, any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against

any Indemnified Party, in each case arising out of or in connection with or resulting from this Agreement (including, without limitation, enforcement of this Agreement) or any other Shared Collateral Document except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party's gross negligence or willful misconduct.

(b) Each Grantor will upon demand pay to the Collateral Trustees the amount of any and all reasonable expenses, including, without limitation, the reasonable fees and expenses of their counsel and of any experts and agents, that the Collateral Trustees may incur in connection with (i) the administration of this Agreement, (ii) the custody, preservation, use or operation of, or the sale of, collection from or other realization upon, any of the Collateral of such Grantor, (iii) the exercise or enforcement of any of the rights of the Collateral Trustees, the Representatives or the other Secured Holders hereunder or (iv) the failure by such Grantor to perform or observe any of the provisions hereof.

Section 17. Amendments; Waivers; Additional Grantors; Etc. (a) No amendment or waiver of any provision of this Agreement, and no consent to any departure by any Grantor herefrom, shall in any event be effective unless the same shall (i) be in writing and signed by the Collateral Trustees and (ii) otherwise comply with Section 9.01 of the Collateral Trust Agreement, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No failure on the part of the Collateral Trustees, the Representatives or any other Secured Holders to exercise, and no delay in exercising any right hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right.

(b) Upon the execution and delivery, or authentication, by any Person of a security agreement supplement in substantially the form of Exhibit A hereto (each a "Security Agreement Supplement"), (i) such Person shall be referred to as an "Additional Grantor" and shall be and become a Grantor hereunder, and each reference in this Agreement and the other Secured Agreements to "Grantor" shall also mean and be a reference to such Additional Grantor, and each reference in this Agreement and the other Secured Agreements to "Collateral" shall also mean and be a reference to the Supplemental Collateral (as defined in the Security Agreement Supplement) of such Additional Grantor and (ii) the supplemental schedules IV attached to each Security Agreement Supplement shall be incorporated into and become a part of and supplement Schedules IV, respectively, hereto, and the Collateral Trustees may attach such supplemental schedules to such Schedules; and each reference to such Schedules shall mean and be a reference to such Schedules as supplemented pursuant to each Security Agreement Supplement.

Section 18. Notices, Etc. All notices, demands, requests, and other communications provided for hereunder shall be in writing (including telegraphic, telecopier or telex communication) and mailed, telegraphed, telecopied, telexed or delivered to, in the case of any Representative, or the Collateral Trustees, addressed to each at their respective address specified in the Collateral Trust Agreement, in the case of the Borrower, addressed to it at its address specified in the Credit Agreement and, in the case of each Grantor other than the Borrower, addressed to it at its address set forth opposite such Grantor's name on the signature pages hereto or on the signature page to the Security Agreement Supplement pursuant to which it

became a party hereto; or, as to any party, at such other address as shall be designated by such party in a written notice to the other parties. All such notices and other communications shall, when mailed, telegraphed, telecopied or telexed, be effective when deposited in the mails, delivered to the telegraph company, telecopied or confirmed by telex answerback, respectively, addressed as aforesaid; except that notices and other communications to the Collateral Trustees shall not be effective until received by the Collateral Trustees. Delivery by telecopier of an executed counterpart of any amendment or waiver of any provision of this Agreement or of any Security Agreement Supplement or Schedule hereto shall be effective as delivery of an original executed counterpart thereof.

Section 19. Continuing Security Interest; Assignments under the Credit Agreement. This Agreement shall create a continuing security interest in the Collateral and shall (a) remain in full force and effect until all of the Collateral is released, and this Agreement is terminated, in accordance with
Section 8.02 of the Collateral Trust Agreement, (b) be binding upon each Grantor, its successors and assigns and (c) inure, together with the rights and remedies of the Collateral Trustees hereunder, to the benefit of the Collateral Trustees, the Representatives on behalf of themselves and on behalf of the Secured Holders and their respective successors, transferees and assigns. Without limiting the generality of the foregoing clause (c), any Bank Party may assign or otherwise transfer all or any portion of its rights and obligations under the Credit Agreement (including, without limitation, all or any portion of its Revolving Credit Loan Commitment, the Loans owing to it and the Note or Notes, if any, held by it) to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Bank Party in the Shared Collateral Documents or otherwise, in each case as provided in Section 10.06 of the Credit Agreement.

Section 20. Release; Termination. The Collateral Trustees shall release all or any portion of the Collateral solely on terms and subject to the conditions set forth in Article 8 of the Collateral Trust Agreement.

Section 21. Security Interest Absolute The obligations of each Grantor under this Agreement are independent of the Secured Obligations or any other obligations of any other Loan Party under or in respect of the Credit Agreement Documents and the Shared Collateral Documents, and a separate action or actions may be brought and prosecuted against each Grantor to enforce this Agreement, irrespective of whether any action is brought against such Grantor or any other Loan Party or whether such Grantor or any other Loan Party is joined in any such action or actions. All rights of the Collateral Trustees, the Representatives and the other Secured Holders and the pledge, assignment and security interest hereunder and under the other Shared Collateral Documents, and all obligations of each Grantor hereunder, shall be irrevocable, absolute and unconditional irrespective of, and each Grantor hereby irrevocably waives (to the maximum extent permitted by applicable law) any defenses it may now have or may hereafter acquire in any way relating to, any or all of the following:

(a) any lack of validity or enforceability of any Secured Agreement or any other agreement or instrument relating thereto;

(b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations or any other Obligations of any other Loan

Party under or in respect of the Secured Agreements or any other amendment or waiver of or any consent to any departure from any Secured Agreement, including, without limitation, any increase in the Secured Obligations resulting from the extension of additional credit to any Loan Party or any of its Subsidiaries or otherwise;

(c) any taking, exchange, release or non-perfection of any Collateral or any other collateral, or any taking, release or amendment or waiver of or consent to departure from any guaranty, for all or any of the Secured Obligations;

(d) any manner of application of any Collateral or any other collateral, or proceeds thereof, to all or any of the Secured Obligations, or any manner of sale or other disposition of any Collateral or any other collateral for all or any of the Secured Obligations or any other Obligations of any other Grantor under or in respect of the Secured Agreements or any other assets of any Grantor or any of its Subsidiaries;

(e) any change, restructuring or termination of the corporate structure or existence of any Grantor or any of its Subsidiaries;

(f) any failure of any Secured Holder to disclose to any Grantor any information relating to the business, condition (financial or otherwise), operations, performance, assets, nature of assets, liabilities or prospects of any other Grantor now or hereafter known to such Secured Holder (each Grantor waiving any duty on the part of the Secured Holders to disclose such information);

(g) the failure of any other Person to execute this Agreement or any other Shared Collateral Document, guaranty or agreement or the release (other than as provided in Section 20) or reduction of liability of any Grantor or other grantor or surety with respect to the Secured Obligations; or

(h) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by any Secured Holder that might otherwise constitute a defense available to, or a discharge of, such Grantor or any other Grantor or a third party grantor of a security interest.

This Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Secured Obligations is rescinded or must otherwise be returned by the Collateral Trustees, any Representative or any Secured Holder upon the insolvency, bankruptcy or reorganization of any Grantor or otherwise, all as though such payment had not been made.

Section 22. Additional Secured Obligations. Each of the Grantors, the Collateral Trustees, the Representatives and the Secured Holders acknowledges and agrees that the Collateral hereunder may secure additional Obligations of the Borrower in respect of the incurrence of new Debt by the Borrower or the refinancing, extension, or renewal of certain Debt of the Borrower, in each case, only as permitted by the terms and conditions of the Credit Agreement. Upon the execution and delivery to the Collateral Trustees of an acknowledgement by the Persons to whom the obligations referred to in the immediately preceding sentence are owed, in form and substance satisfactory to the Collateral Trustees, that (i) such Persons

acknowledge the terms and conditions of this Agreement and agree to be bound thereby and (ii) such Persons agree to pay their ratable share of the fees and expenses of the Collateral Trustees and to ratably indemnify the Collateral Trustees, in each case, on terms and conditions similar to those contained in the Credit Agreement, such Persons shall become "Secured Holders" hereunder and shall be entitled to share ratably in the Collateral for all purposes hereunder.

Section 23. Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by telecopier shall be effective as delivery of an original executed counterpart of this Agreement.

Section 24. Limitation of Liability. Each Grantor, and by its acceptance of this Agreement, the Collateral Trustees, the Representatives and the Secured Holders, hereby confirms that it is the intention of all such Persons that this Agreement and the Obligations of the Grantors hereunder not constitute a fraudulent conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or state law to the extent applicable to this Agreement and the Obligations of the Grantors hereunder. To effectuate the foregoing intention, the Collateral Trustees, the Representatives and the Secured Holders and the Grantors hereby irrevocably agree that the Obligations of the Grantors under this Agreement at any time shall be limited to the maximum amount as will result in the Obligations of the Grantors under this Agreement not constituting a fraudulent transfer or conveyance.

Section 25. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

Section 26. Submission to Jurisdiction and Waiver.

(a) Each Grantor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement and the other Secured Agreements to which it is or is to be a party, or for recognition or enforcement of any judgment, and each Guarantor hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York State court or, to the extent permitted by law, in such federal court. Each Grantor agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Agreement in the courts of any jurisdiction.

(b) Each Grantor irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement to which it is or is to be a party in any New York State or federal court. Each

Grantor hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such suit, action or proceeding in any such court.

(c) EACH GRANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE LOANS OR THE ACTIONS OF ANY BANKS IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

[SIGNATURE PAGES IMMEDIATELY FOLLOW]

IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.

THE AES CORPORATION

Acknowledged on the date hereof by:

WILMINGTON TRUST COMPANY,
as Corporate Trustee

BRUCE L. BISSON,
as Individual Trustee

WELLS FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Exchange Note Trustee

CITICORP USA, INC.,
as Administrative Agent

BANKBOSTON, N.A., NASSAU BRANCH,
as Sul Agent

FLEET NATIONAL BANK,
as Lake Worth LOC Bank

EXHIBIT 4.4

EXECUTION COPY

12 December 2002

AES International Holdings II, Ltd.
(as Chargor)

and

Wilmington Trust Company
(as Corporate Trustee)

and
Bruce L. Bisson
(as Individual Trustee)

CHARGE OVER SHARES
in
AES El Salvador Ltd.
and
AES South American Holdings Ltd.

CHARGE AND ASSIGNMENT OF SHARES

THIS CHARGE AND ASSIGNMENT is made on the 12th day of December 2002

BETWEEN:

(1) AES International Holdings II, Ltd., a company incorporated in the British Virgin Islands, the registered office of which is at the offices of Citco Building, Wickhams Cay, P.O. Box 662, Road Town, Tortola, British Virgin Islands (the "Chargor"); and

(2) Wilmington Trust Company, a banking corporation organized in Delaware, of Rodney Square North, 1100 North Market Street, Wilmington, DE 19890 (the "Corporate Trustee") and Bruce L. Bisson, an individual residing in the State of Delaware (the "Individual Trustee"; and together with the Corporate Trustee, the "Collateral Trustees"), as trustees under the Collateral Trust Agreement dated 12 December 2002 (as such agreement may be amended, amended and restated, supplemented or otherwise modified hereafter from time to time, the "Collateral Trust Agreement") among the Grantors (as defined in the Security Agreement), the Chargor and the Collateral Trustees.

WHEREAS:

(1) The AES Corporation (the "Borrower") has entered into an Amended and Restated Credit, Reimbursement and Exchange Agreement dated as of 12 December 2002 (said Agreement, as it may hereafter be amended, amended and restated, supplemented or otherwise modified from time to time, being the "Credit Agreement") with the Subsidiary Guarantors party thereto, the Banks party thereto (the "Banks"), the Revolving Fronting Banks and the Drax LOC Fronting Bank party thereto, and Citicorp USA, Inc., as Administrative Agent for the Bank Parties (in such capacity, the "Agent") and as Collateral Agent for the Bank Parties (in such capacity, the "Credit Agreement Collateral Agent"; and together with the Agent, the "Agents").

(2) Terms defined in the Credit Agreement, the Security Agreement (referred to below) or the Collateral Trust Agreement and not otherwise defined in this Charge or in Section 1 hereof, are used in this Charge as defined in the Credit Agreement, the Security Agreement or the Collateral Trust Agreement.

(3) In order to induce the Banks, the Revolving Fronting Banks, the Drax LOC Fronting Banks and the Agents to enter into the Credit Agreement, the Chargor has agreed to grant a continuing security interest in and to the Collateral (as hereinafter defined) to the Collateral Trustees for the ratable benefit of the Lender Parties to secure the Obligations of the Borrower under the Credit Agreement and the Notes issued pursuant thereto.

(4) The Borrower will enter into an Indenture to be dated as of 13 December 2002 (as amended, supplemented or otherwise modified and in effect on the date hereof and as the same may hereafter be further amended, modified, extended, renewed, replaced, restated or supplemented from time to time pursuant to the terms thereof, the "Exchange Note Indenture") with Wells Fargo Bank Minnesota, National Association (the "Exchange Note Trustee") to exchange the Borrower's (i) 8.75% Senior Notes due 2002 and (ii) the 7.375% Remarketable or Redeemable Securities due 2013 for the 10% Senior Secured Exchange Notes due 2005 to be issued on December 13, 2002 (the "Exchange Notes", and together with the Exchange Note Indenture (only to the extent relating to the Exchange Notes), the "Exchange Note Agreements").

(5) In order to induce the Exchange Note Trustee to enter into the Exchange Note Indenture, the Chargor has agreed to grant a continuing security interest in and to the Collateral to the Collateral Trustees for the ratable benefit of the Exchange Note Holders to secure the Obligations of the Borrower under the Exchange Note Agreements (as defined in the Collateral Trust Agreement).

(6) The Borrower and certain other Persons party thereto (the "Grantors") have entered into a Security Agreement dated 12 December 2002 in favor of the Collateral Trustees (said agreement, as it may hereafter be amended, amended and restated, supplemented or otherwise modified from time to time, being the "Security Agreement") pursuant to which the Grantors have granted to the Collateral Trustees, for their benefit and in trust for the equitable and ratable benefit of the Representatives and the Secured Holders (as defined in the Collateral Trust Agreement), a lien and security interest in certain collateral of the Grantors.

(7) The Borrower has entered into a Sponsor Agreement dated as of 7 March 2000 (as amended, supplemented or otherwise modified and in effect on the date hereof and as the same may hereafter be further amended, modified, extended, renewed, replaced, restated or supplemented from time to time pursuant to the terms thereof, the "Sponsor Agreement") with BankBoston, N.A., Nassau Branch, as agent (the "Sul Agent"), pursuant to which the Borrower has agreed to guarantee the obligations of AES Cayman Guaiba, Ltd. under a Credit Agreement dated as of 6 March 2001 (as amended, supplemented or otherwise modified and in effect on the date hereof and as the same may hereafter be further amended, modified, extended, renewed, replaced, restated or supplemented from time to time pursuant to the terms thereof, the "Sul Credit Agreement") with BankBoston, N.A., Nassau Branch, Banc of America Securities, LLC, Unibanco-Uniao de Bancos Brasilieros S.A. and WestLB AG, New York Branch and the lenders named therein (collectively, the "Sul Guaranteed Parties"), in an amount of up to a maximum aggregate amount of $50,000,000 (together with any other agreement or instrument delivered in connection with such guaranty, the "Sul Guarantee").

(8) In order to satisfy certain conditions under the Sul Guarantee, the Chargor has agreed to grant a continuing security interest in and to the Collateral to the Collateral Trustees for the ratable benefit of the Sul Guaranteed Parties to secure the Obligations of the Borrower under the Sul Guarantee in an amount of up to a maximum aggregate amount of $50,000,000.

(9) The Borrower has entered into a Gas Transportation Agreement dated as of July 21, 2000 with Florida Public Utilities Company pursuant to which Fleet National Bank (the "Lake Worth LOC Bank") issued in favour of Florida Public Utilities Company irrevocable standby letter of credit number 1S1280134 (together with the application and agreement therefor dated on or about July 6, 2001, the "Lake Worth Letter of Credit") in an aggregate amount not to exceed $5,490,449.

(10) In order to satisfy certain conditions under the Lake Worth Letter of Credit, the Chargor has agreed to grant a continuing security interest in and to the Collateral to the Collateral Trustees for the ratable benefit of the Lake Worth LOC Bank to secure the obligation of Lake Worth Generation LLC ("Lake Worth"), a Subsidiary of the Borrower, to reimburse the Lake Worth LOC Bank for any drawings under the Lake Worth Letter of Credit in an amount of up to a maximum aggregate amount of $5,490,449.

(11) It is a condition precedent to (a) the continuation of the Loans by the Banks and the making of Revolving Credit Loans by the Revolving Credit Loan Banks, (b) the issuance (or be deemed to have issued) of Revolving Letters of Credit by the Revolving Fronting Banks, (c) the deemed issuance of the Drax Letter of Credit and the making of Drax Loans in respect of Drax L/C Drawings by the Drax LOC Fronting Banks, (d) the entry into the Secured Hedge Agreements by the Hedge Banks from time to time, (e) the entry into the Secured Treasury Management Service Agreements by a Bank Party or any Affiliate thereof, (f) the entry into the Exchange Note Indenture by the Exchange Note Trustee, (g) the satisfaction by the Borrower of its obligations under the Sul Guarantee, (h) the satisfaction by Lake Worth of its obligations under the Lake Worth Letter of Credit, (i) the acknowledgement of the Security Agreement by the Collateral Trustees and (j) the entry into the Collateral Trust Agreement by the Collateral Trustees that the Chargor shall have granted the assignment and security interest and made the pledge and assignment contemplated by this Charge.

IT IS AGREED as follows:

1 DEFINITIONS AND INTERPRETATION

1.1 The following words and expressions shall have the following meanings:

"Charged Shares" means the shares to be charged as set out in Schedule 1 hereto and any other shares of the Companies now or at any time in the future beneficially owned by the Chargor or in which the Chargor has any interest and all additional shares of or in any new direct Subsidiary of the Chargor formed or acquired by the Chargor in any manner after the date of this Charge to the extent such new Subsidiary is a company incorporated in the Cayman Islands; provided, that the term "Charged Shares" shall not include, as to the Chargor, more than 65% of the outstanding voting shares of any of the Companies.

"Collateral"             has the meaning given to it in Clause 3.

"Companies"              means AES El Salvador Ltd. and AES South American
                         Holdings Ltd., each a company incorporated in the
                         Cayman Islands, and any new direct Subsidiary of
                         the Chargor formed or acquired by the Chargor in
                         any manner after the date of this Charge to the
                         extent such new Subsidiary is a company
                         incorporated in the Cayman Islands or in any other
                         jurisdiction.

"Receiver"               has the meaning given to it in Clause 8.

"Security Interest"      means the security interest in the Collateral
                         granted hereunder securing the Secured
                         Obligations.

1.2 In this Charge:

1.2.1  any reference to a Recital, Clause or Schedule is to the relevant
       Recital, Clause or Schedule of or to this Charge and any reference
       to a sub-clause or paragraph is to the relevant sub-clause or
       paragraph of the Clause or Schedule in which it appears;

1.2.2  the clause headings are included for convenience only and shall
       not affect the interpretation of this Charge;

1.2.3  use of the singular includes the plural and vice versa;

1.2.4  use of any gender includes the other genders;

1.2.5  any phrase introduced by the terms "including", "include", "in
       particular" or any similar expression shall be construed as
       illustrative and shall not limit the sense of the words preceding
       those terms; and

1.2.6  references to any document or agreement are to be construed as
       references to such document or agreement as is in force for the
       time being and as amended, varied supplemented, substituted or
       novated from time to time.

1.3 The Recitals and Schedules form part of this Charge and shall have effect as if set out in full in the body of this Charge and any reference to this Charge includes the Recitals and Schedules.

2 CHARGED SHARES

The Chargor represents and warrants as follows as of the date of this Charge and on any date on which additional or new shares of the Companies become the subject of this Charge.

2.1 The Chargor owns all of the Charged Shares, free and clear of any Liens other than the Security Interest created by this Charge. All of the Charged Shares have been duly authorised and validly issued, and are fully paid and non-assessable, and are subject to no rights or options to purchase of any Person. The Chargor is not and will not become a party to or otherwise bound by any agreement, other than this Charge, which restricts in any manner the rights of any present or future holder of any of the Charged Shares with respect thereto.

2.2 This Charge constitutes its legal, valid, binding and enforceable obligation and is a first priority security interest over the Charged Shares effective in accordance with its terms.

2.3 (a) The execution, delivery, recordation, filing or performance by the Chargor of this Charge, (b) the grant by the Chargor of the Liens granted by it pursuant to this Charge, (c) the perfection or maintenance of the Liens created under this Charge (including the first priority nature thereof), (d) the exercise by the Collateral Trustees of their voting or other rights provided for in this Charge and (e) the exercise by the Collateral Trustees of their remedies in respect of the Collateral pursuant to this Charge and the other Shared Collateral Documents, will 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 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 will not conflict with or constitute a breach of any of the terms or provisions of, or a default under, the charter, by-laws or memorandum and articles of association of the Borrower, the Chargor or the other Pledged Subsidiaries or any agreement, indenture or other instrument to which the Borrower, the Chargor or any other Pledged Subsidiary is a party or by which the Borrower, the Chargor and the other Pledged Subsidiaries, or any of the Borrower's, the Chargor'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, the Chargor or any of the other Pledged Subsidiaries or the Borrower's, the Chargor'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 the foregoing cases, (A) 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 the failure to obtain such approval or consent could result in a default under, or breach of, agreements or other legal obligations of such Subsidiary and (B) disposition of any of

the Collateral may be subject to the receipt of regulatory approvals and to laws affecting the offering and sale of securities generally (the exceptions described in the foregoing clauses (A) and (B) are referred to herein as "Remedies Limitations").

2.4 As of this date, there is no action or proceeding pending or, to its knowledge, threatened against the Chargor or the Companies, before any court or governmental authority or arbitrator, which could affect the legality, validity or enforceability of this Charge.

3 CHARGE

3.1 The Chargor, in order to secure the Secured Obligations, hereby charges by way of first fixed charge as a continuing security for the payment and discharge of the Secured Obligations, all its right, title, interest and benefit present and future in, to and under the Charged Shares and all proceeds, income and profits thereon, and all interest, dividends and other payments and distributions with respect thereto (the "Collateral") subject to the provisions for release of this Charge set out below.

3.2 This Charge secures the payment of all Secured Obligations of the Borrower and the Chargor. Without limiting the generality of the foregoing, this Charge secures, as to the Chargor, the payment of all amounts that constitute part of the Secured Obligations and that would be owed by the Chargor but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Chargor.

3.3 The Security Interest is granted as security only and shall not subject the Collateral Trustees and Representatives or any other Secured Holder to, or transfer or in any way affect or modify, any obligation or liability of the Chargor with respect to any of the Collateral or any transaction in connection therewith.

4 COVENANTS BY THE CHARGOR

So long as any of the Secured Obligations remain outstanding, any Revolving Letter of Credit or the Drax Letter of Credit shall be outstanding, or any Revolving Credit Loan Bank has a Revolving Credit Loan Commitment, the Chargor covenants that:

4.1 it shall forthwith and from time to time deposit with the Collateral Trustees all certificates and other documents of title relating to the Charged Shares;

4.2 it shall deliver to the Collateral Trustees as security in accordance with the terms of this Charge the following (on the date hereof and on any date on which additional or new shares of the Companies become the subject of this Charge):

4.2.1 original share certificate in respect of the Charged Shares;

4.2.2  blank, signed and undated share transfer certificates in respect
       of the Charged Shares in the forms set out in Schedule 2 to this
       Charge;

4.2.3  a shareholder proxy in favour of the Collateral Trustees in the
       forms set out in Schedule 3 to this Charge in respect of Charged
       Shares;

4.2.4  executed but undated letters of resignation and release together
       with letters of authority to date the same from each of the
       directors, alternate directors and officers of the Companies
       appointed by the Chargor in the forms set out in Parts I and II of
       Schedule 4 to this Charge; and

4.2.5  an undertaking from the Company to register transfers of the
       Charged Shares to the Chargee or its nominee in the form set out
       in Schedule 5 to this Charge.

4.3 upon the issue of additional Charged Shares which become the subject of this charge it shall provide the Collateral Trustees, for the benefit of the Representatives and the Secured Holders, with an opinion of the General Counsel of AES that such additional Charged Shares are duly authorised and validly issued, fully paid and non-assessable (or the equivalent thereof) and are subject to no rights or options to purchase of any Person.

5 FILING; FURTHER ASSURANCES

Subject to the Remedies Limitations, the Chargor agrees that it will, at its expense and in such manner and form as the Collateral Trustees may reasonably require, execute, deliver, file and record any financing statement, specific assignment or other paper and take any other action that may be necessary or that the Collateral Trustees may reasonably request and that is within the power of the Chargor, consistent with its currently existing contractual and other legal obligations, in order to create, preserve, perfect or validate the Security Interest or to enable the Collateral Trustees to exercise and enforce their rights hereunder with respect to any of the Collateral; and notwithstanding the generality of such provisions, the Chargor covenants that immediately following execution of this Charge it shall deliver to the Collateral Trustee a copy of the Chargor's complete register of mortgages, charges and other encumbrances as maintained at its registered office, certified as a true copy by the registered agent of the Chargor in the British Virgin Islands containing particulars of the security created hereunder and shall procure that a further copy of the same is submitted for registration with the Registrar of Companies in the British Virgin Islands.

The Collateral Trustees may after the occurrence and during the continuance of a Collateral Trust Agreement Default, in their sole discretion, cause any or all of the Charged Shares to be transferred of record into the name of the Collateral Trustees or their nominee. The Chargor will promptly give to the Collateral Trustees copies of any notices or other communications received by it with respect to the Charged Shares registered in the name of the Chargor and the Collateral Trustees will promptly give the Chargor copies of any notices and communications

received by the Collateral Trustees with respect to the Chargor registered in the name of the Collateral Trustees or their nominee.

6 RIGHT TO RECEIVE DISTRIBUTIONS AND RIGHT TO VOTE CHARGED SHARES

6.1 So long as no Collateral Trust Agreement Default shall have occurred and be continuing:

6.1.1  The Chargor shall be entitled to exercise any and all voting and
       other consensual rights pertaining to the Collateral or any part
       thereof for any purpose; provided, however, that the Chargor will
       not exercise or refrain from exercising any such right if such
       action would have a material adverse effect on the value of the
       Collateral or any part thereof.

6.1.2  The Chargor shall be entitled to receive and retain any and all
       dividends, interest and other distributions paid in respect of the
       Collateral if and to the extent that the payment thereof is not
       otherwise prohibited by the terms of the Applicable Agreements;
       provided, however, that any and all dividends, interest and other
       distributions paid or payable other than in cash in respect of,
       and instruments and other property received, receivable or
       otherwise distributed in respect of, or in exchange for, any
       Collateral shall be, and shall be forthwith delivered to the
       Collateral Trustees to hold as Collateral, and shall, if received
       by the Chargor, be received in trust for the benefit of the
       Collateral Trustees, be segregated from the other property or
       funds of the Chargor and be forthwith delivered to the Collateral
       Trustees as Collateral in the same form as so received (with any
       necessary indorsement).

6.1.3  The Collateral Trustees will execute and deliver (or cause to be
       executed and delivered) to the Chargor all such proxies and other
       instruments as the Chargor may reasonably request for the purpose
       of enabling the Chargor to exercise the voting and other rights
       that it is entitled to exercise pursuant to Section 6.1.1 above
       and to receive the dividends or interest payments that it is
       authorized to receive and retain pursuant to Section 6.1.2 above.

6.2 Upon the occurrence and during the continuance of a Collateral Trust Agreement Default:

6.2.1  All rights of the Chargor (x) to exercise or refrain from
       exercising the voting and other consensual rights that it would
       otherwise be entitled to exercise pursuant to Section 6.1.1 shall,
       upon notice to the Chargor by the Collateral Trustees, cease and
       (y) to receive the dividends, interest and other distributions
       that it would otherwise be authorized to receive and retain
       pursuant to Section 6.1.2 shall automatically cease, and, subject
       to the Remedies Limitations, all such rights shall thereupon
       become vested in the Collateral Trustees, who shall thereupon have
       the sole right to exercise or refrain from exercising such voting
       and

       other consensual rights and to receive and hold as Collateral such
       dividends, interest and other distributions and shall deposit the
       same into the Collateral Account; and

6.2.2  All dividends, interest and other distributions that are received
       by the Chargor contrary to the provisions of Section 6.2.1 shall
       be received in trust for the benefit of the Collateral Trustees,
       shall be segregated from other funds of the Chargor and shall be
       forthwith paid over to the Collateral Trustees to be deposited
       into the Collateral Account. Upon receipt of notice from the
       Required Representative(s) that all Collateral Trust Agreement
       Defaults have been cured, the Collateral Trustees' right to retain
       dividends under this Section 6 shall cease and the Collateral
       Trustees shall pay over to the Chargor any such Collateral
       retained by them during the continuance of a Collateral Trust
       Agreement Default.

7 GENERAL AUTHORITY

The Chargor hereby irrevocably appoints the Collateral Trustees its true and lawful attorney, with full power of substitution, in the name of the Chargor, the Collateral Trustees, the Representatives and the Secured Holders or otherwise, for the sole use and benefit of the Collateral Trustees on behalf of the Representatives and the Secured Holders, but at the expense of the Chargor, to the extent permitted by law to exercise, at any time and from time to time while a Collateral Trust Agreement Default has occurred and is continuing, all or any of the following powers with respect to all or any of the Collateral:

(a) to demand, sue for, collect, receive and give acquittance for any and all monies due or to become due upon or by virtue thereof,

(b) to settle, compromise, compound, prosecute or defend any action or proceeding with respect thereto,

(c) to sell, transfer, assign or otherwise deal in or with the same or the proceeds or avails thereof, as fully and effectually as if the Collateral Trustees were the absolute owner thereof, and

(d) to extend the time of payment of any or all thereof and to make any allowance and other adjustments with reference thereto;

provided, that the Collateral Trustees shall give the Chargor not less than ten days' prior notice of the time and place of any sale or other intended disposition of any of the Collateral except any Collateral which threatens to decline speedily in value or is of a type customarily sold on a recognized market.

8 RECEIVER

If a Collateral Trust Agreement Default shall have occurred and be continuing, the Collateral Trustees may by writing without notice to the Chargor appoint one or more person or persons as the Collateral Trustees think fit to be a receiver (the "Receiver") in relation to the

Collateral. Where the Collateral Trustees appoint two or more persons as Receiver, the Receivers may act jointly or independently.

8.1 The Receiver may take such action in relation to the enforcement of this Charge including, without limitation, to sell, charge or otherwise dispose of the Collateral, to exercise any powers, discretion, voting or other rights or entitlements in relation to the Collateral and generally to carry out any other action which he may in his sole discretion deems necessary in relation to the enforcement of this Charge.

8.2 The Receiver shall have, in addition to the other powers set-out in this Clause, the following powers:

8.2.1  power to take possession of, collect and get in the Collateral
       and, for that purpose, to take such proceedings as may seem to him
       to be expedient;

8.2.2  power to raise or borrow money and grant security therefor over
       the Collateral;

8.2.3  power to appoint an attorney or accountant or other professionally
       qualified person to assist him in the performance of his
       functions;

8.2.4  power to bring or defend any action or other legal proceedings in
       the name of and on behalf of the Chargor in respect of the
       Collateral;

8.2.5  power to do all acts and execute in the name and on behalf of the
       Chargor any document or deed in respect of the Collateral;

8.2.6  power to make any payment which is necessary or incidental to the
       performance of his functions;

8.2.7  power to make any arrangement or compromise on behalf of the
       Chargor in respect of the Collateral;

8.2.8  power to rank and claim in the insolvency or liquidation of the
       Companies and to receive dividends and to accede to agreements for
       the creditors of the Companies;

8.2.9  power to present or defend a petition for the winding up of the
       Companies; and

8.2.10 power to do all other things incidental to the exercise of the foregoing powers.

8.3 The Receiver shall be the agent of the Chargor and the Chargor alone shall be responsible for his acts and defaults and liable on any contracts made, entered into or adopted by the Receiver. The Collateral Trustees shall not be liable for the Receiver's

acts, omissions, negligence or default, nor be liable on contracts entered into or adopted by the Receiver.

9 INDEMNIFICATION AND EXPENSES

9.1 The Chargor agrees to indemnify, defend and save and hold harmless the Collateral Trustees, each Representative and each Secured Holder and each of their Affiliates and their respective officers, directors, employees, agents and advisors (each, an "Indemnified Party") from and against, and shall pay on demand, any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or resulting from this Charge (including, without limitation, enforcement of this Charge) or any other Shared Collateral Document except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party's gross negligence or willful misconduct.

9.2 The Chargor will upon demand pay to the Collateral Trustees the amount of any and all reasonable expenses, including, without limitation, the reasonable fees and expenses of their counsel and of any experts and agents, that the Collateral Trustees may incur in connection with (a) the administration of this Charge (b) the custody, preservation, use or operation of, or the sale of, collection from or other realization upon, any of the Collateral, (c) the exercise or enforcement of any of the rights of the Collateral Trustees, the Representatives or the other Secured Holders hereunder or (d) the failure by the Chargor to perform or observe any of the provisions hereof.

Any such amount not paid on demand shall bear interest at a per annum rate of 2% plus the Base Rate.

10 LIMITATION ON DUTY OF THE COLLATERAL AGENT IN RESPECT OF CHARGED SHARES

Beyond the exercise of reasonable care in the custody thereof, the Collateral Trustees shall have no duty as to any Collateral in their possession or control. The Collateral Trustees shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in their possession if the 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 Collateral, or for any diminution in the value thereof, by reason of any act or omission of any agent or bailee selected by the Collateral Trustees in good faith, other than any act or omission caused by the gross negligence or willful misconduct of such bailee or any act or omission made in breach of this Charge. Any direction of the Required Representative(s) to the Collateral Trustees to take any action hereunder shall be subject to section 7.05(d) of the Collateral Trust Agreement.

11.1   Any cash held by or on behalf of the Collateral Trustees and all cash
       proceeds received by or on behalf of the Collateral Trustees in respect
       of any sale of, collection from, or other realization upon all or any
       part of the Collateral may, in the discretion of the Collateral Trustees,
       be held by the Collateral Trustees as collateral for, and/or then or at
       any time thereafter applied (after payment of any amounts payable to the
       Collateral Trustees pursuant to Section 9 of this Charge) in whole or in
       part by the Collateral Trustees for the ratable benefit of the
       Representatives and the Secured Holders against, all or any part of the
       Secured Obligations, in accordance with the terms of the Collateral Trust
       Agreement.

11.2   All payments received by the Chargor in respect of the Collateral shall
       be received in trust for the benefit of the Collateral Trustees, shall be
       segregated from other funds of the Chargor and shall be forthwith paid
       over to the Collateral Trustees to be deposited into the Collateral
       Account.

11.3   The Collateral Trustees may, without notice to the Chargor except as
       required by law and at any time or from time to time, charge, set-off and
       otherwise apply all or any part of the Secured Obligations against any
       funds held in the Collateral Account or in any other deposit account of
       the Borrower in accordance with Section 11.1 above.

11.4   If the Collateral Trustees shall determine to exercise their right to
       sell all or any of the Collateral pursuant to this Section 11, the
       Chargor agrees that, upon request of the Collateral Trustees and subject
       to the Remedies Limitations, the Chargor will, at its own expense:

       11.4.1 execute and deliver, and cause each issuer of such Collateral
              contemplated to be sold and the directors and officers thereof to
              execute and deliver, all such instruments and documents, and do or
              cause to be done all such other acts and things, as may be
              necessary or, in the opinion of the Collateral Trustees, advisable
              to register such Collateral under the provisions of the Securities
              Act of 1933 of the United States of America (as amended from time
              to time, the "Securities Act"), to cause the registration
              statement relating thereto to become effective and to remain
              effective for such period as prospectuses are required by law to
              be furnished and to make all amendments and supplements thereto
              and to the related prospectus that, in the opinion of the
              Collateral Trustees, are necessary or advisable, all in conformity
              with the requirements of the Securities Act and the rules and
              regulations of the Securities and Exchange Commission applicable
              thereto;

       11.4.2 use its best efforts to qualify the Collateral under the state
              securities or "Blue Sky" laws of the United States of America and
              to obtain all necessary governmental approvals for the sale of
              such Collateral, as requested by the Collateral Trustees;

       11.4.3 cause each such issuer of such Collateral to make available to its
              security holders, as soon as practicable, an earnings statement
              that will satisfy the provisions of Section 11(a) of the
              Securities Act;

       11.4.4 provide the Collateral Trustees with such other information and
              projections as may be necessary or, in the opinion of the
              Collateral Trustees, advisable to enable the Collateral Trustees
              to effect the sale of such Collateral; and

       11.4.5 do or cause to be done all such other acts and things as may be
              necessary to make such sale of such Collateral or any part thereof
              valid and binding and in compliance with applicable law.

11.5   The Collateral Trustees are authorized, in connection with any sale of
       the Collateral pursuant to this Section 11 to deliver or otherwise
       disclose to any prospective purchaser of the Collateral

       11.5.1 any registration statement or prospectus, and all supplements and
              amendments thereto, prepared pursuant to Section 11.4.1 above;

       11.5.2 any information and projections provided to it pursuant to Section
              11.4.4 above; and

       11.5.3 any other information in its possession relating to such
              Collateral.

11.6   The Chargor acknowledges the impossibility of ascertaining the amount of
       damages that would be suffered by the Secured Holders by reason of the
       failure by the Chargor to perform any of the covenants contained in
       Section 11.4 above and, consequently, agrees that, if the Chargor shall
       fail to perform any of such covenants, it will pay, as liquidated damages
       and not as a penalty, an amount equal to the value of the Collateral on
       the date the Collateral Trustees shall demand compliance with Section
       11.4 above.


12     TERMINATION OF SECURITY INTEREST; RELEASE OF CHARGED SHARES

The Collateral Trustees shall release all or any portion of the Collateral solely on terms and subject to the conditions set forth in Article 8 of the Collateral Trust Agreement.

13 NOTICES

All notices, communications and distributions hereunder shall be given in accordance with Section 9.03 of the Collateral Trust Agreement.

14 WAIVERS; NON-EXCLUSIVE REMEDIES

No failure on the part of the Collateral Trustees, the Representatives or any other Secured Holder to exercise, and no delay in exercising and no course of dealing with respect to, any right under this Charge shall operate as a waiver thereof; nor shall any single or partial exercise of any right under the Secured Agreements or this Charge preclude any other or further exercise thereof or the exercise of any other right. The rights in the Secured Agreements and this Charge are cumulative and are not exclusive of any other remedies provided by law.

15 ADDITIONAL SECURED OBLIGATIONS

Each of the Chargor, the Collateral Trustees, the Representatives and the Secured Holders acknowledges and agrees that the Collateral hereunder may secure additional Obligations of the Borrower in respect of the incurrence of new Debt by the Borrower or the refinancing, extension, or renewal of certain Debt of the Borrower, in each case, only as permitted by the terms and conditions of the Credit Agreement. Upon the execution and delivery to the Collateral Trustees of an acknowledgment by the Persons to whom the Obligations referred to in the immediately preceding sentence are owed, in form and substance satisfactory to the Collateral Trustees, that such Persons acknowledge the terms and conditions of this Charge and the other Shared Collateral Documents and agree to be bound thereby, such Persons shall become a "Secured Holder" for all purposes under the Shared Collateral Documents and shall be entitled to share ratably in the Collateral for all purposes hereunder.

16 SUCCESSORS AND ASSIGNS; CONTINUING SECURITY INTEREST

This Charge shall create a continuing security interest in the Collateral and shall (a) remain in full force and effect until all of the Collateral is released, and this Charge is terminated, in accordance with Section 8.02 of the Collateral Trust Agreement, (b) be binding upon the Chargor, its successors and assigns and (c) inure, together with the rights and remedies of the Collateral Trustees hereunder, to the benefit of the Collateral Trustees, the Representatives on behalf of themselves and on behalf of the Secured Holders and their respective successors, transferees and assigns. Without limiting the generality of the foregoing clause (c), any Bank Party may assign or otherwise transfer all or any portion of its rights and obligations under the Credit Agreement (including, without limitation, all or any portion of its Revolving Credit Loan Commitment, the Loans owing to it and the Note or Notes, if any, held by it) to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Bank Party in the Shared Collateral Documents or otherwise, in each case as provided in
Section 10.06 of the Credit Agreement.

17 CHANGES IN WRITING

No amendment or waiver of any provision of this Charge, and no consent to any departure by the Chargor herefrom, shall in any event be effective unless the same shall (a) be in writing and signed by the Collateral Trustees and (b) otherwise comply with Section 9.01 of the Collateral Trust Agreement, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

18 PROTECTION OF PURCHASERS

No purchaser or other person dealing with the Collateral Trustees or their delegate shall be bound to see or inquire whether the right of the Collateral Trustees to exercise any of their powers has arisen or become exercisable or be concerned with notice to the contrary, or be concerned to see whether the delegation by the Collateral Trustees pursuant to the terms of this Charge shall have lapsed for any reason or been revoked.

19.1   This Charge is governed by, and shall be construed in accordance with,
       the law of the Cayman Islands.

19.2   The Chargor irrevocably agrees for the exclusive benefit of the
       Collateral Trustees, the Representatives and the Secured Holders that the
       courts of the Cayman Islands shall have jurisdiction to hear and
       determine any suit, action or proceeding and to settle any dispute which
       may arise out of or in connection with this Charge and for such purposes
       irrevocably submits to the jurisdiction of such courts.


20     COUNTERPARTS

This Charge may be executed in any number of counterparts and all such counterparts taken together shall be deemed to constitute one and the same instrument.

IN WITNESS WHEREOF this Charge has been executed and delivered as a Deed the day and year first above written.

EXECUTED UNDER THE COMMON SEAL OF )
AES INTERNATIONAL HOLDINGS II, LTD. ) ......................................

) Name:
) Title:
)

In the presence of:

EXECUTED AS A DEED by               )
WILMINGTON TRUST COMPANY            )     ......................................
                                    )     Name:
                                    )     Title:
In the presence of:

                      Witness
----------------------


EXECUTED AS A DEED by               )
BRUCE L. BISSON                     )     ......................................
                                    )     Name:
                                    )     Title:
In the presence of:

                      Witness
----------------------

Agent                                 )   ......................................
                                      )   Name:
                                      )   Title:
In the presence of:

                      Witness
----------------------

ACKNOWLEDGED by                       )
Wells Fargo Bank Minnesota,           )
National Association, as Exchange     )
Note Trustee                          )   ......................................
                                      )   Name:
                                      )   Title:
In the presence of:

                      Witness
----------------------

ACKNOWLEDGED by                       )
BankBoston, N.A., Nassau Branch,      )
as Sul Agent                          )   ......................................
                                      )   Name:
                                      )   Title:
In the presence of:

                      Witness
----------------------


ACKNOWLEDGED by                       )
Fleet National Bank,                  )
as Lake Worth LOC Bank                )   ......................................
                                      )   Name:
                                      )   Title:
In the presence of:

                      Witness
----------------------

EXHIBIT 4.5

THE AES CORPORATION
as the Company

and

WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION

as Trustee

Contingent Value Rights Agreement

Dated as of December 13, 2002

                                                                           PAGE
                                                                           ----


                                   ARTICLE 1
                   DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01.  Definitions....................................................1
Section 1.02.  Other Definitions..............................................5
Section 1.03.  Rules of Construction..........................................5

                                   ARTICLE 2
                                    THE CVRs

Section 2.01.  Title and Terms................................................5
Section 2.02.  Execution and Authentication...................................6
Section 2.03 . Paying Agent; Paying Agent to Hold Money in Trust..............7
Section 2.04.  No Transfer and Exchange.......................................8
Section 2.05.  Registration...................................................8
Section 2.06.  Replacement CVRs...............................................9
Section 2.07.  Outstanding CVRs...............................................9
Section 2.08.  Temporary CVRs................................................10
Section 2.09.  Cancellation..................................................10
Section 2.10.  CUSIP Numbers.................................................11

                                   ARTICLE 3
                                   COVENANTS

Section 3.01.  Payment of CVRs...............................................11
Section 3.02.  Maintenance of Office or Agency...............................11

                                   ARTICLE 4
                             SUCCESSOR CORPORATION

Section 4.01.  When Company May Merge, Etc...................................12
Section 4.02.  Successor Substituted.........................................12


--------------------
     1 Note: The Table of Contents shall not for any purposes be deemed to be a
part of the Agreement.


                                       i

                                   ARTICLE 5
                              DEFAULT AND REMEDIES

Section 5.01.  Events of Default.............................................12
Section 5.02.  Remedies......................................................12
Section 5.03.  Limitation on Suits...........................................13
Section 5.04.  Rights of Holders to Receive Payment..........................13
Section 5.05.  Collection Suit by Trustee....................................13
Section 5.06.  Trustee May File Proofs of Claim..............................14
Section 5.07.  Application of Proceeds.......................................14
Section 5.08.  Restoration of Rights and Remedies............................15
Section 5.09.  Undertaking for Costs.........................................15
Section 5.10.  Rights and Remedies Cumulative................................15
Section 5.11.  Delay or Omission Not Waiver..................................15

                                   ARTICLE 6
                                    TRUSTEE

Section 6.01.  General.......................................................15
Section 6.02.  Certain Rights of Trustee.....................................16
Section 6.03.  Individual Rights of Trustee..................................17
Section 6.04.  Trustee's Disclaimer..........................................17
Section 6.05.  Notice of Event of Default....................................17
Section 6.06.  Compensation and Indemnity....................................18
Section 6.07.  Replacement of Trustee........................................18
Section 6.08.  Successor Trustee by Merger, Etc..............................19
Section 6.09.  Money Held in Trust...........................................20

                                   ARTICLE 7
                      AMENDMENTS, SUPPLEMENTS AND WAIVERS

Section 7.01.  Without Consent of Holders....................................20
Section 7.02.  With Consent of Holders.......................................20
Section 7.03.  Effect of Amendments..........................................21
Section 7.04.  Notation on or Exchange of CVRs...............................21
Section 7.05.  Trustee to Sign Amendments, Etc...............................21

                                   ARTICLE 8
                                 MISCELLANEOUS

Section 8.01.  Notices.......................................................22
Section 8.02.  Certificate and Opinion as to Conditions Precedent............23
Section 8.03.  Statements Required in Certificate or Opinion.................23
Section 8.04.  Evidence of Ownership.........................................24
Section 8.05.  Rules by Paying Agent.........................................24


                                       ii

Section 8.06.  Governing Law.................................................24
Section 8.07.  No Adverse Interpretation of Other Agreements.................24
Section 8.08.  Successors....................................................24
Section 8.09.  Duplicate Originals...........................................24
Section 8.10.  Separability..................................................24
Section 8.11.  Table of Contents, Headings, Etc..............................24
Section 8.12.  Incorporators, Stockholders, Officers and Directors
                 of Company Exempt from Individual Liability.................24

AGREEMENT, dated as of December 13, 2002, between The AES Corporation, a Delaware corporation, as the Company, and Wells Fargo Bank Minnesota, National Association, a national banking association, as Trustee.

RECITALS OF THE COMPANY

WHEREAS, the Company has duly authorized the creation of an issue of contingent value rights (the "CVRs"), of the tenor and amount set forth herein, and to provide therefor the Company has duly authorized the execution and delivery of this Agreement;

WHEREAS the Company, pursuant to the Amended and Restated Offering Memorandum and related letter of transmittal each dated as of November 12, 2002, has agreed to issue, to each holder of the Company's 7.375% Remarketable or Redeemable Securities due 2013 ("ROARS") that validly tenders such ROARS to the Company on or prior to the Expiration Date of the Exchange Offer (as defined below) and does not withdraw such ROARS, one CVR for each $1,000 principal amount of ROARS tendered;

WHEREAS, all things necessary to make this Agreement a valid agreement of the Company, in accordance with its terms, have been done, and the Company has done all things necessary to make the CVRs, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company as hereinafter provided;

NOW, THEREFORE THIS AGREEMENT WITNESSETH

For and in consideration of the premises and the consummation of the transactions referred to above, it is mutually covenanted and agreed, for the equal and proportionate benefit of the respective holders of the CVRs as follows:

ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01. Definitions.

"Affiliate" of any Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling", "controlled by" and "under common control with") when used with respect to any Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

"Agent" means any Paying Agent, transfer agent or Authenticating Agent.

"Agent Member" means a member of, or a participant in, the Depositary.

"Agreement" means this Agreement as originally executed and delivered or as it may be amended or supplemented from time to time by one or more amendments to this Agreement entered into pursuant to the applicable provisions of this Agreement.

"Amended and Restated Offering Memorandum" means the offering memorandum dated November 12, 2002, as amended or supplemented through the Expiration Date, which describes the terms and conditions of the Exchange Offer.

"Board of Directors" means either the Board of Directors of the Company or any committee of such Board duly authorized to act hereunder.

"Board Resolution" means one or more resolutions of the Board of Directors or any committee authorized or designated by the Board of Directors to act on its behalf, certified by the secretary or an assistant secretary to have been duly adopted and to be in full force and effect on the date of certification, and delivered to the Trustee.

"Certificated CVR" means a Registered CVR in individual form.

"CILCORP Sale" means the sale of all of the issued and outstanding shares of common stock, without par value, of CILCORP Inc., an Illinois corporation, to Ameren Corporation pursuant to the Stock Purchase Agreement dated as of April 28, 2002.

"Company" means the party named as such in the first paragraph of this Agreement until a successor replaces it pursuant to Article 4 of this Agreement and thereafter means the successor.

"Contingent Payment" means a payment of $20 for each CVR; provided that the Company shall have no obligation to make such payment unless and until the CILCORP Sale is consummated.

"Contingent Payment Date" means the date, if any, on which the Company makes the Contingent Payment which shall be within 30 days of the date on which the CILCORP Sale is consummated.

"Corporate Trust Office" means the office of the Trustee at which the corporate trust business of the Trustee shall, at any particular time, be principally administered, which office is, at the date of this Agreement, located at Sixth Street

and Marquette Avenue, Minneapolis, Minnesota, Attention: AES Corporation Administrator.

"CVRs" means any of the contingent value rights, as defined in the first paragraph of the recitals hereof, that are authenticated and delivered under this Agreement.

"Default Interest Rate" means 10% per annum, compounded semi-annually on the basis of a 360-day year of twelve 30-day months.

"Depositary" means the depositary of each Global CVR, which initially will be DTC unless and until a successor Depositary shall have become such pursuant to the applicable provisions of this Agreement, and thereafter "Depositary" shall mean or include each Person who is then a Depositary hereunder.

"DTC" means The Depository Trust Company, a New York corporation.

"DTC Legend" means the legend set forth in Exhibit B.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Exchange Offer" means the Company's offer to exchange its outstanding 8.75% Senior Notes and ROARS for new 10% Senior Secured Notes due 2005 plus a cash amount, and, in the case of the ROARS, a CVR, as described in the Amended and Restated Offering Memorandum.

"Expiration Date" means December 12, 2002, the expiration date of the Exchange Offer.

"GAAP" means generally accepted accounting principles in the U.S. as in effect as of the date of this Agreement applied on a basis consistent with the principles, methods, procedures and practices employed in the preparation of the Company's audited financial statements, including, without limitation, those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as is approved by a significant segment of the accounting profession.

"Global CVR" means a Registered CVR in global form.

"Holder" means the registered holder of any CVR and all beneficial holders thereof.

"Officer" means, with respect to the Company, the chairman of the Board of Directors, the president or chief executive officer, any vice president, the chief financial officer, the treasurer or any assistant treasurer, or the secretary or any assistant secretary.

"Officers' Certificate" means a certificate signed in the name of the Company (i) by the chairman of the Board of Directors, the president or chief executive officer or a vice president and (ii) by the chief financial officer, the treasurer or any assistant treasurer, or the secretary or any assistant secretary, complying with Section 8.03 and delivered to the Trustee. Each such certificate shall include (except as otherwise expressly provided in this Agreement) the statements provided in Section 8.03.

"Opinion of Counsel" means a written opinion signed by legal counsel, who may be an employee of or counsel to the Company, satisfactory to the Trustee and complying with Section 8.03. Each such opinion shall include the statements provided in Section 8.03, if and to the extent required thereby.

"Person" means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

"Registered CVR" means any CVR registered on the CVR Register (as defined in Section 2.05).

"Responsible Officer" means, when used with respect to the Trustee, any senior trust officer, any vice president, any trust officer, any assistant trust officer, or any other officer or assistant officer of the Trustee customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of his knowledge of and familiarity with the particular subject.

"Subsidiary" means, with respect to any Person, any corporation, association or other business entity of which a majority of the capital stock 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.

"Trustee" means the party named as such in the first paragraph of this Agreement until a successor replaces it in accordance with the provisions of Article 6 and thereafter means such successor.

"8.75% Senior Notes" means the 8.75% Senior Notes due December 15, 2002 issued by the Company.

Term                                  Section
----                                  -------
Authenticating Agent                    2.02
CVR Register                            2.05
Event of Default                        5.01
Paying Agent                            2.03

Section 1.03. Rules of Construction. Unless the context otherwise requires:

(i) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(ii) words in the singular include the plural, and words in the plural include the singular;

(iii) "herein," "hereof" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision;

(iv) all references to Sections or Articles refer to Sections or Articles of this Agreement unless otherwise indicated; and

(v) use of masculine, feminine or neuter pronouns should not be deemed a limitation, and the use of any such pronouns should be construed to include, where appropriate, the other pronouns.

ARTICLE 2
THE CVRs

Section 2.01. Title and Terms. (a) The aggregate number of CVRs which may be authenticated and delivered under this Agreement is limited to one CVR for each $1,000 aggregate principal amount of ROARS validly tendered in the Exchange Offer on or prior to the Expiration Date and not validly withdrawn, except for CVRs authenticated and delivered in exchange for, or in lieu of, other CVRs pursuant to Section 2.06, 2.08 or 7.04.

(b) The CVRs shall be known and designated as "Contingent Value Rights" of the Company.

(c) Each CVR and the related Trustee's certificate of authentication will be substantially in the form attached hereto as Exhibit A. The terms and

provisions contained in the form of the CVRs annexed as Exhibit A constitute, and are hereby expressly made, a part of this Agreement.

(d) The CVRs shall be issuable in denominations of one CVR for each $1,000 aggregate principal amount of ROARS validly tendered in the Exchange Offer on or prior to the Expiration Date and not validly withdrawn. The CVRs shall be numbered, lettered or otherwise distinguished in such manner or in accordance with such plan as the Officers of the Company executing the same may determine, as evidenced by their execution thereof. Each CVR shall be dated the date of its authentication.

(e) If and when the Contingent Payment Date occurs, the Company shall make the Contingent Payment to each Holder.

(f) In the event that it is finally determined in good faith that the CILCORP Sale will not be consummated and that the condition for payment of the CVRs will not occur, the Company shall give to the Trustee and each Holder notice of such determination. Upon such determination, absent manifest error, the CVRs shall terminate and become null and void and the Holders thereof shall have no further rights with respect thereto. The failure to give such notice or any defect therein shall not affect the validity of such determination.

Section 2.02. Execution and Authentication. Two Officers shall execute the CVRs for the Company by facsimile or manual signature in the name and on behalf of the Company. If an Officer whose signature is on a CVR no longer holds that office at the time the CVR is authenticated, the CVR shall nevertheless be valid.

The Trustee, at the expense of the Company, may appoint an authenticating agent (the "Authenticating Agent") to authenticate CVRs. The Authenticating Agent may authenticate CVRs whenever the Trustee may do so. Each reference in this Agreement to authentication by the Trustee includes authentication by such Authenticating Agent.

A CVR shall not be valid until the Trustee or Authenticating Agent manually signs the certificate of authentication on the CVR. The signature shall be conclusive evidence that the CVR has been authenticated under this Agreement. In authenticating the CVRs, the Trustee shall be entitled to receive prior to the first authentication of any CVRs and (subject to Article 6) shall be fully protected in relying upon, unless and until such documents have been superseded or revoked:

(a) any Board Resolution by or pursuant to which the form and terms of the CVRs were established;

(b) An Officers' Certificate setting forth the form and terms of the CVRs, stating that the form and terms of the CVRs have been established in compliance with this Agreement; and

(c) an Opinion of Counsel substantially to the effect that the form and terms of the CVRs have been established in compliance with this Agreement, and the CVRs have been duly authorized and, if executed and authenticated in accordance with the provisions of the Agreement and delivered to the holders of the ROARS pursuant to the terms of the Exchange Offer on the date of such opinion, would be entitled to the benefits of the Agreement and would be valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, receivership, moratorium and other similar laws affecting creditors' rights generally, general principles of equity and such other matters as shall be specified therein.

Section 2.03. Paying Agent; Paying Agent to Hold Money in Trust. The Company shall maintain an office or agency where CVRs may be presented for payment (the "Paying Agent"), which shall be in the Borough of Manhattan, The City of New York. The Company initially appoints the Trustee as Paying Agent. The Trustee's function as Paying Agent will be performed through its Agent in The City of New York.

(b) Not later than 10:00 a.m. New York City time on the Contingent Payment Date, the Company shall deposit with the Paying Agent money in immediately available funds sufficient to make the Contingent Payment for each CVR. The Company shall require each Paying Agent other than the Trustee to agree in writing that such Paying Agent shall hold in trust, for the benefit of the Holders of such CVRs or the Trustee, all money held by the Paying Agent for the payment of the Contingent Payment for each CVR and shall promptly notify the Trustee of any default by the Company in making any such payment. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and account for any funds disbursed, and the Trustee may at any time during the continuance of any payment default, upon written request to a Paying Agent, require such Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed. Upon doing so, the Paying Agent shall have no further liability for the money so paid over to the Trustee. If the Company or any Affiliate of the Company acts as Paying Agent, it will, on or before the Contingent Payment Date or any date upon which any amounts are due to the Holders of the CVRs, segregate and hold in a separate trust fund for the benefit of the Holders thereof a sum of money sufficient to make such payment until such sum of money shall be paid to such Holders or otherwise disposed of as provided in this Agreement, and will promptly notify the Trustee in writing of its action or failure to act as required by this Section.

Section 2.04. No Transfer and Exchange. (a) The CVRs many not be transferred or exchanged except as set forth in Section 2.05(b)(iv) in accordance with the applicable rules and procedures of the Depositary. The Trustee shall refuse to register any requested transfer or exchange that does not comply with the preceding sentence. In addition, no transfer or exchange of a beneficial interest in the CVRs will be permitted or recognized by the Trustee, except as otherwise required by law.

(b) The Trustee will retain copies of all certificates, opinions and other documents received in connection with the transfer or exchange of a CVR (or a beneficial interest therein), and the Company will have the right to inspect and make copies thereof at any reasonable time upon written notice to the Trustee.

(c) By its acceptance of any CVR (or any beneficial interest in such CVR), each Holder thereof and each owner of a beneficial interest therein acknowledges and agrees that such CVR (or a beneficial interest therein) is nontransferable except as set forth in clause (a) above.

Section 2.05. Registration. (a) Registered Global Form Only. The CVRs will be issued in registered form only, without coupons, and the Company shall cause the Trustee to maintain a register (the "CVR Register") of the CVRs, for registering the record ownership of the CVRs by the Holders. The CVRs will be issued in global form only except for CVRs to be issued under the circumstances described in clause (b)(iv) of this Section.

(b) Global CVRs. (i) Each Global CVR will be registered in the name of the Depositary or its nominee and, so long as DTC is serving as the Depositary thereof, will bear the DTC Legend.

(ii) Each Global CVR will be delivered to the Trustee as custodian for the Depositary. Transfers of a Global CVR (but not a beneficial interest therein) will be limited to transfers thereof in whole, but not in part, to the Depositary, its successors or their respective nominees, except as set forth in paragraph (b)(iv) of this Section.

(iii) Agent Members will have no rights under the Agreement with respect to any Global CVR held on their behalf by the Depositary, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and Holder of such Global CVR for all purposes whatsoever. Notwithstanding the foregoing, the Depositary or its nominee may grant proxies and otherwise authorize any person (including any Agent Member and any Person that holds a beneficial interest in a Global CVR through an Agent Member) to take any action which a Holder is entitled to take under the Agreement or the CVRs, and nothing herein will impair, as between the Depositary and

its Agent Members, the operation of customary practices governing the exercise of the rights of a holder of any security.

(iv) If (x) the Depositary (1) notifies the Company that it is unwilling or unable to continue as Depositary for a Global CVR and a successor depositary is not appointed by the Company within 90 days of the notice or (2) has ceased to be a clearing agency registered under the Exchange Act, (y) an Event of Default has occurred and is continuing and the Trustee has received a request from the Depositary, or (z) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of Certificated CVRs, the Trustee will promptly exchange each beneficial interest in the Global CVR for one or more Certificated CVRs in authorized denominations registered in the name of the owner of such beneficial interest, as identified to the Trustee by the Depositary, and thereupon the Global CVR will be deemed canceled.

Section 2.06. Replacement CVRs. If a defaced or mutilated CVR is surrendered to the Trustee or if a Holder claims that its CVR has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement CVR bearing a number not contemporaneously outstanding. If required by the Trustee or the Company, an indemnity bond must be furnished that is sufficient in the judgment of both the Trustee and the Company to protect the Company, the Trustee and any Agent from any loss that any of them may suffer if a CVR is replaced. The Company may charge such Holder for its expenses and the expenses of the Trustee (including without limitation attorneys' fees and expenses) in replacing a CVR. In case any such mutilated, defaced, lost, destroyed or wrongfully taken CVR has become or is about to become due and payable, the Company in its discretion may pay such CVR instead of issuing a new CVR in replacement thereof.

Every replacement CVR is an additional obligation of the Company and shall be entitled to the benefits of this Agreement.

To the extent permitted by law, the foregoing provisions of this Section are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or wrongfully taken CVRs.

Section 2.07. Outstanding CVRs. CVRs outstanding at any time are all CVRs that have been authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation and those described in this Section as not outstanding.

If a CVR is replaced pursuant to Section 2.06, it ceases to be outstanding unless and until the Trustee and the Company receive proof satisfactory to them that the replaced CVR is held by a holder in due course.

If the Paying Agent (other than the Company or an Affiliate of the Company) holds on the Contingent Payment Date, money sufficient to pay CVRs payable on that date, then on and after that date such CVRs cease to be outstanding.

A CVR does not cease to be outstanding because the Company or one of its Affiliates holds such CVR, provided, however, that, in determining whether the Holders of the outstanding CVRs have given any request, demand, authorization, direction, notice, consent or waiver hereunder, CVRs owned by the Company or any Affiliate of the Company shall be disregarded and deemed not to be outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only CVRs as to which a Responsible Officer of the Trustee has received written notice to be so owned shall be so disregarded. Any CVRs so owned which are pledged by the Company, or by any Affiliate of the Company, as security for loans or other obligations, otherwise than to another such Affiliate of the Company, shall be deemed to be outstanding, if the pledgee is entitled pursuant to the terms of its pledge agreement and is free to exercise in its or his discretion the right to vote such CVRs, uncontrolled by the Company or by any such Affiliate.

Section 2.08. Temporary CVRs. Until definitive CVRs are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary CVRs. Temporary CVRs shall be substantially in the form of definitive CVRs but may have insertions, substitutions, omissions and other variations determined to be appropriate by the Officers executing the temporary CVRs, as evidenced by their execution of such temporary CVRs. If temporary CVRs are issued, the Company will cause definitive CVRs to be prepared without unreasonable delay. After the preparation of definitive CVRs, the temporary CVRs shall be exchangeable for definitive CVRs of such tenor upon surrender of such temporary CVRs at the office or agency of the Company designated for such purpose pursuant to Section 3.02, without charge to the Holder. Upon surrender for cancellation of any one or more temporary CVRs the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like number of CVRs of the same tenor. Until so exchanged, the temporary CVRs shall be entitled to the same benefits under this Agreement as definitive CVRs.

Section 2.09. Cancellation. The Company at any time may deliver to the Trustee for cancellation any CVRs previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee for cancellation any CVRs previously authenticated hereunder which the Company has not issued and sold. Any transfer agent and the Paying Agent shall forward to the Trustee any CVRs surrendered to them for transfer, exchange or payment. The Trustee shall cancel and destroy all CVRs surrendered for transfer, exchange, payment or cancellation and shall deliver a

certificate of destruction to the Company. The Company may not issue new CVRs to replace CVRs it has paid in full or delivered to the Trustee for cancellation.

Section 2.10. CUSIP Numbers. The Company in issuing the CVRs may use "CUSIP" and "CINS" numbers, and the Trustee shall use CUSIP numbers or CINS numbers, as the case may be, in notices of redemption or exchange as a convenience to Holders and no representation shall be made as to the correctness of such numbers either as printed on the CVRs or as contained in any notice of redemption or exchange.

ARTICLE 3
COVENANTS

Section 3.01. Payment of CVRs. The Company shall duly and punctually pay the amounts, if any, in the manner provided for in Section 2.03, payable on the CVRs in accordance with the terms of the CVRs and this Agreement.

Section 3.02. Maintenance of Office or Agency. So long as any of the CVRs remain outstanding, the Company will maintain in the Borough of Manhattan, The City of New York, an office or agency where CVRs may be surrendered or presented for payment and where notices and demands to or upon the Company in respect of the CVRs and this Agreement may be served. The Company hereby initially designates the Corporate Trust Office of the Trustee, located in the Borough of Manhattan, The City of New York, as such office or agency of the Company. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the address of the Trustee set forth in Section 8.01.

The Company may also from time to time designate one or more other offices or agencies where the CVRs may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

ARTICLE 4
SUCCESSOR CORPORATION

Section 4.01. When Company May Merge, Etc. The Company shall not consolidate with, merge with or into, or sell, convey, transfer, lease or otherwise dispose of all or substantially all of its property and assets (as an entirety or substantially as an entirety in one transaction or a series of related transactions) to, any Person (other than a consolidation with or merger with or into a Subsidiary or a sale, conveyance, transfer, lease or other disposition to a Subsidiary) or permit any Person to merge with or into the Company unless either (x) the Company shall be the continuing Person or (y) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or to which properties and assets of the Company shall be a solvent corporation organized and validly existing under the laws of the United States of America or any state thereof or the District of Columbia and shall expressly assume, by an amendment to this Agreement, executed and delivered to the Trustee, all of the obligations of the Company on all of the CVRs issued under this Agreement and the Company shall have delivered to the Trustee an Opinion of Counsel stating that such consolidation, merger or transfer and such amendment complies with this provision and that all conditions precedent provided for herein relating to such transaction have been complied with and that such amendment constitutes the legal, valid and binding obligation of the Company or such successor enforceable against such entity in accordance with its terms, subject to customary exceptions.

Section 4.02. Successor Substituted. Upon any consolidation or merger, or any sale, conveyance, transfer, lease or other disposition of all or substantially all of the property and assets of the Company in accordance with
Section 4.01 of this Agreement, the successor Person formed by such consolidation or into which the Company is merged or to which such sale, conveyance, transfer, lease or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Agreement with the same effect as if such successor Person had been named as the Company herein.

ARTICLE 5
DEFAULT AND REMEDIES

Section 5.01. Events of Default. An "Event of Default" shall occur with respect to the CVRs if the Company defaults in making the Contingent Payment when the same becomes due and payable on the Contingent Payment Date.

Section 5.02. Remedies. If an Event of Default with respect to the CVRs occurs and is continuing, the Trustee may pursue, in its own name or as trustee of an express trust, any available remedy by proceeding at law or in equity to collect the payments due on the CVRs. In addition, Default Interest will accrue at the

Default Interest Rate from the scheduled Contingent Payment Date until the date on which the Company makes the Contingent Payment.

The Trustee may maintain a proceeding even if it does not possess any of the CVRs or does not produce any of them in the proceeding.

Section 5.03. Limitation on Suits. No Holder of any CVR may institute any proceeding, judicial or otherwise, with respect to this Agreement or the CVRs, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

(i) such Holder has previously given to the Trustee written notice of a continuing Event of Default with respect to the CVRs;

(ii) the Holders of at least 25% of outstanding CVRs shall have made written request to the Trustee to pursue the remedy;

(iii) such Holder or Holders have offered and, if requested, provided to the Trustee indemnity reasonably satisfactory to the Trustee against any costs, liabilities or expenses to be incurred in compliance with such request;

(iv) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

(v) during such 60-day period, the Holders of a majority in outstanding CVRs have not given the Trustee a direction that is inconsistent with such written request.

A Holder may not use this Agreement to prejudice the rights of another Holder or to obtain a preference or priority over such other Holder.

Section 5.04. Rights of Holders to Receive Payment. Notwithstanding any other provision of this Agreement, the right of any Holder of a CVR to receive payment of the amount payable in respect of such CVR on or after the Contingent Payment Date expressed in such CVR, or to bring suit for the enforcement of any such payment on or after such date, shall not be impaired or affected without the consent of such Holder.

Section 5.05. Collection Suit by Trustee. If an Event of Default occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount in cash that then shall have become due and payable on all CVRs (with interest from the date due and payable to the date of such payment upon the overdue amount at the

Default Interest Rate) and such further amount as shall be sufficient to cover all amounts owing the Trustee under Section 6.06.

Section 5.06. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for amounts due the Trustee under Section 6.06) and the Holders allowed in any judicial proceedings relative to the Company (or any other obligor on the CVRs), its creditors or its property and shall be entitled and empowered to collect and receive any moneys, securities or other property payable or deliverable upon conversion or exchange of the CVRs or upon any such claims and to distribute the same, and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it under Section 6.06. Nothing herein contained shall be deemed to empower the Trustee to authorize or consent to, or accept or adopt on behalf of any Holder, any plan of reorganization, arrangement, adjustment or composition affecting the CVRs or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 5.07. Application of Proceeds. Any moneys collected by the Trustee pursuant to this Article in respect of the CVRs shall be applied in the following order at the date or dates fixed by the Trustee:

FIRST: To the payment of all amounts due the Trustee under Section 6.06;

SECOND: to Holders for amounts then due and unpaid for the Contingent Payment and any Default Interest on the CVRs, ratably, without preference or priority of any kind, according to the amounts due and payable on the CVRs for the Contingent Payment and any Default Interest, and in the case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon the CVRs, then to the payment of such amounts without preference or priority of any kind, ratably, to the aggregate of such amounts due and payable; and

THIRD: To the payment of the remainder, if any, to the Company or any other person lawfully entitled thereto.

Section 5.08. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Agreement and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then, and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored to their former positions hereunder and thereafter all rights and remedies of the Company, Trustee and the Holders shall continue as though no such proceeding had been instituted.

Section 5.09. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Agreement or in any suit against the Trustee for any action taken or omitted by it as Trustee, in either case with respect to the CVRs, a court may require any party litigant in such suit (other than the Trustee) to file an undertaking to pay the costs of the suit, and the court may assess reasonable costs, including reasonable attorneys' fees, against any party litigant (other than the Trustee) in the suit having due regard to the merits and good faith of the claims or defenses made by the party litigant. This
Section 5.09 does not apply to a suit by a Holder pursuant to Section 5.04 or a suit by Holders of more than 10% of the CVRs outstanding.

Section 5.10. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or wrongfully taken CVRs in Section 2.06, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 5.11. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article 5 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

ARTICLE 6
TRUSTEE

Section 6.01. General. The duties and responsibilities of the Trustee shall be as set forth herein. The Trustee undertakes to perform only the duties

expressly set forth herein and no implied covenant or obligation shall be read into this Agreement against the Trustee. Notwithstanding the foregoing, no provision of this Agreement shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, unless it receives indemnity satisfactory to it against any loss, liability or expense. Whether or not therein expressly so provided, every provision of this Agreement relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article 6.

Section 6.02. Certain Rights of Trustee. (a) The Trustee may rely and shall be protected in acting or refraining from acting upon any Board Resolution, Officers' Certificate, Opinion of Counsel, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper person or persons. The Trustee need not investigate any fact or matter stated in the document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit;

(b) before the Trustee acts or refrains from acting, it may require an Officers' Certificate and/or an Opinion of Counsel, which shall conform to
Section 8.03. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such certificate or opinion. Subject to
Section 6.01 and Section 6.02, whenever in the administration of the trusts of this Agreement the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officers' Certificate delivered to the Trustee, and such certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this Agreement upon the faith thereof;

(c) the Trustee may act through its attorneys and agents not regularly in its employ and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care;

(d) any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officers' Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any Board Resolution may be evidenced to the Trustee by a copy thereof certified by the Secretary or an Assistant Secretary of the Company;

(e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement at the request, order or direction of any of the Holders, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction;

(f) the Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers;

(g) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; and

(h) prior to the occurrence of an Event of Default hereunder and after the curing or waiving of all Events of Default, the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, Officers' Certificate, Opinion of Counsel, Board Resolution, statement, instrument, opinion, report, notice, request, consent, order, approval, appraisal, bond, debenture, note, security, or other paper or document unless requested in writing so to do by the Holders of not less than a majority of the CVRs then outstanding; provided that, if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Agreement, the Trustee may require reasonable indemnity against such expenses or liabilities as a condition to proceeding.

Section 6.03. Individual Rights of Trustee. The Trustee, in its individual or any other capacity, may become the owner or pledgee of the CVRs and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not the Trustee. Any Agent may do the same with like rights.

Section 6.04. Trustee's Disclaimer. The recitals contained herein and in the CVRs (except the Trustee's certificate of authentication) shall be taken as statements of the Company and not of the Trustee and the Trustee assumes no responsibility for the correctness of the same. Neither the Trustee nor any of its agents makes any representation as to the validity or adequacy of this Agreement or the CVRs.

Section 6.05. Notice of Event of Default. If any Event of Default with respect to the CVRs occurs and is continuing and if such Event of Default is known to the actual knowledge of a Responsible Officer of the Trustee, the Trustee shall give to each Holder of CVRs notice of such Event of Default within

90 days after it occurs to all Holders, unless such Event of Default shall have been cured or waived before the mailing or publication of such notice.

Section 6.06. Compensation and Indemnity. The Company shall pay to the Trustee such compensation as shall be agreed upon in writing from time to time for its services. The compensation of the Trustee shall not be limited by any law on compensation of a Trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of pocket expenses, disbursements and advances incurred or made by the Trustee. Such expenses shall include the reasonable compensation and expenses of the Trustee's agents, counsel and other persons not regularly in its employ.

The Company shall indemnify the Trustee for, and hold it harmless against, any loss or liability or expense incurred by it without gross negligence or bad faith on its part arising out of or in connection with the acceptance or administration of this Agreement and the CVRs or the issuance of the CVRs or the trusts hereunder and the performance of duties under this Agreement and the CVRs, including the costs and expenses of defending itself against or investigating any claim or liability and of complying with any process served upon it or any of its officers in connection with the exercise or performance of any of its powers or duties under this Agreement and the CVRs.

To secure the Company's payment obligations in this Section 6.06, the Trustee shall have a lien prior to the CVRs on all money or property held or collected by the Trustee, in its capacity as Trustee, except money or property held in trust to pay amounts due with respect to particular CVRs.

The obligations of the Company under this Section to compensate and indemnify the Trustee and each predecessor Trustee and to pay or reimburse the Trustee and each predecessor Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of this Agreement or the rejection or termination of this Agreement under bankruptcy law. Such additional indebtedness shall be a senior claim to that of the CVRs upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the Holders of particular CVRs, and the CVRs are hereby subordinated to such senior claim.

Section 6.07. Replacement of Trustee. A resignation or removal of the Trustee as Trustee and appointment of a successor Trustee as Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section 6.07.

The Trustee may resign as Trustee with respect to the CVRs at any time by so notifying the Company in writing. The Holders of a majority of outstanding CVRs may remove the Trustee as Trustee with respect to the CVRs by so

notifying the Trustee in writing and may appoint a successor Trustee with respect thereto with the consent of the Company. The Company may remove the Trustee as Trustee with respect to the CVRs if: (i) the Trustee is adjudged a bankrupt or insolvent; (ii) a receiver or other public officer takes charge of the Trustee or its property; or (iii) the Trustee becomes incapable of acting.

If the Trustee resigns or is removed as Trustee with respect to the CVRs, or if a vacancy exists in the office of Trustee with respect to the CVRs for any reason, the Company shall promptly appoint a successor Trustee with respect thereto. Within one year after the successor Trustee takes office, the Holders of a majority of outstanding CVRs may appoint a successor Trustee in respect of such CVRs to replace the successor Trustee appointed by the Company. If the successor Trustee with respect to the CVRs does not deliver its written acceptance required by the next succeeding paragraph of this Section 6.07 within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of a majority of the outstanding CVRs may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect thereto.

A successor Trustee with respect to the CVRs shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Immediately after the delivery of such written acceptance, subject to the lien provided for in Section 6.06, (i) the retiring Trustee shall transfer all property held by it as Trustee in respect of the CVRs to the successor Trustee,
(ii) the resignation or removal of the retiring Trustee in respect of the CVRs shall become effective and (iii) the successor Trustee shall have all the rights, powers and duties of the Trustee in respect of the CVRs under this Agreement. A successor Trustee shall mail notice of its succession to each Holder of CVRs.

Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in the preceding paragraph.

The Company shall give notice of any resignation and any removal of the Trustee with respect to the CVRs and each appointment of a successor Trustee in respect of the CVRs to all Holders of CVRs. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office.

Notwithstanding replacement of the Trustee with respect to the CVRs pursuant to this Section 6.07, the Company's obligations under Section 6.06 shall continue for the benefit of the retiring Trustee.

Section 6.08. Successor Trustee by Merger, Etc. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of

its corporate trust business to, another corporation or national banking association, the resulting, surviving or transferee corporation or national banking association without any further act shall be the successor Trustee with the same effect as if the successor Trustee had been named as the Trustee herein.

Section 6.09. Money Held in Trust. The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

ARTICLE 7
AMENDMENTS, SUPPLEMENTS AND WAIVERS

Section 7.01. Without Consent of Holders. (a) The Company and the Trustee may amend or supplement this Agreement or the CVRs without notice to or the consent of any Holder:

(i) to cure any ambiguity, defect or inconsistency in this Agreement; provided that such amendments or supplements shall not adversely affect the interests of the Holders in any material respect;

(ii) to comply with Article 4;

(iii) to evidence and provide for the acceptance of appointment hereunder with respect to the CVRs by a successor Trustee; and

(iv) to make any change that does not materially and adversely affect the rights of any Holder.

Section 7.02. With Consent of Holders. Subject to Section 5.04, without prior notice to any Holders, the Company and the Trustee may amend this Agreement and the CVRs with the written consent of the Holders of not less than a majority of the outstanding CVRs by written notice to the Trustee, and the Holders of a majority of the outstanding CVRs by written notice to the Trustee may waive future compliance by the Company with any provision of this Agreement or the CVRs.

Notwithstanding the provisions of this Section 7.02, without the consent of the Holder of each outstanding CVR, an amendment or waiver, may not:

(a) change the Contingent Payment Date or the Contingent Payment amount;

(b) reduce the above stated percentage of outstanding CVRs the consent of whose holders is necessary to modify or amend the Agreement; or

(c) reduce the percentage of outstanding CVRs the consent of whose Holders is required for any waiver of compliance with certain provisions of this Agreement.

It shall not be necessary for the consent of any Holder under this Section 7.02 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.

After an amendment, supplement or waiver under this Section 7.02 becomes effective the Company will mail copies of any amendments or waivers to Holders upon request. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment or waiver.

Section 7.03. Effect of Amendments. Upon the execution of any amendment under this Article, this Agreement shall be modified in accordance therewith, and such amendment shall form a part of this Agreement for all purposes; and every Holder of CVRs theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

Section 7.04. Notation on or Exchange of CVRs. If an amendment, supplement or waiver changes the terms of any CVR, the Trustee may require the Holder thereof to deliver it to the Trustee. The Trustee may, but is not required to, place an appropriate notation on the CVR about the changed terms and return it to the Holder. Alternatively, if the Company so determines, the Company in exchange for the CVR may issue and the Trustee shall authenticate a new CVR of the same tenor that reflects the changed terms.

Section 7.05. Trustee to Sign Amendments, Etc. The Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of any amendment, supplement or waiver authorized pursuant to this Article 7 is authorized or permitted by this Agreement, stating that all requisite consents have been obtained or that no consents are required and stating that such amendment constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to customary exceptions. Subject to the preceding sentence, the Trustee shall sign such amendment, supplement or waiver if the same does not adversely affect the rights of the Trustee. The Trustee may, but shall not be obligated to, execute any such amendment, supplement or waiver that affects the Trustee's own rights, duties or immunities under this Agreement or otherwise.

ARTICLE 8
MISCELLANEOUS

Section 8.01. Notices. Any notice or communication shall be sufficiently given if written and (a) if delivered in person when received, or (b) if mailed by first class mail 5 days after mailing, or (c) as between the Company and the Trustee if sent by facsimile transmission, where transmission is confirmed, in each case addressed as follows:

if to the Company:

The AES Corporation
1001 North 19th Street
Arlington, VA 22209
Telecopy: (703) 528-4510
Attention: General Counsel

if to the Trustee:

Wells Fargo Bank Minnesota,
National Association
Corporate Trust Services
Sixth Street and Marquette Avenue
MAC N9303-120
Minneapolis, MN 55479
Telecopy: (612) 667-9825
Attention: AES Corporation Administrator

The Company or the Trustee by written notice to the other may designate additional or different addresses for subsequent notices or communications.

Any notice or communication shall be sufficiently given to Holders by mailing to such Holders at their addresses as they shall appear on the CVR Register. Notice mailed shall be sufficiently given if so mailed within the time prescribed. Copies of any such communication or notice to a Holder shall also be mailed to the Trustee and each Agent at the same time.

Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. Except as otherwise provided in this Agreement, if a notice or communication is mailed in the manner provided in this Section 8.01, it is duly given, whether or not the addressee receives it.

Where this Agreement provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or

after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

In case it shall be impracticable to give notice as herein contemplated, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

Section 8.02. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take any action under this Agreement, the Company shall furnish to the Trustee:

(a) an Officers' Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Agreement relating to the proposed action have been complied with; and

(b) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

Section 8.03. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Agreement shall include:

(a) a statement that each person signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(b) a brief statement as to the nature and scope of the examination or investigation upon which the statement or opinion contained in such certificate or opinion is based;

(c) a statement that, in the opinion of each such person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(d) a statement as to whether or not, in the opinion of each such person, such condition or covenant has been complied with; provided, however, that, with respect to matters of fact, an Opinion of Counsel may rely on an Officers' Certificate or certificates of public officials.

Section 8.04. Evidence of Ownership.

The Company, the Trustee and any agent of the Company or the Trustee may deem and treat the person in whose name any CVR shall be registered upon the CVR Register as the absolute owner of such CVR (whether or not such CVR shall be overdue and notwithstanding any notation of ownership or other writing thereon) for the purpose of receiving any payments related to the CVR and for all other purposes; and neither the Company nor the Trustee nor any agent of the Company or the Trustee shall be affected by any notice to the contrary.

Section 8.05. Rules by Paying Agent. The Paying Agent may make reasonable rules for its functions.

Section 8.06. Governing Law. The laws of the State of New York shall govern this Agreement and the CVRs, without giving effect to such state's conflicts of law principles.

Section 8.07. No Adverse Interpretation of Other Agreements. This Agreement may not be used to interpret another agreement, indenture or loan or debt agreement of the Company or any Subsidiary of the Company. Any such agreement or indenture may not be used to interpret this Agreement.

Section 8.08. Successors. All agreements of the Company in this Agreement and the CVRs shall bind its successors. All agreements of the Trustee in this Agreement shall bind its successors.

Section 8.09. Duplicate Originals. The parties may sign any number of copies of this Agreement. Each signed copy shall be an original, but all of them together represent the same agreement.

Section 8.10. Separability. In case any provision in this Agreement or in the CVRs shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 8.11. Table of Contents, Headings, Etc. The Table of Contents and headings of the Articles and Sections of this Agreement have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms and provisions hereof.

Section 8.12. Incorporators, Stockholders, Officers and Directors of Company Exempt from Individual Liability. No recourse under or upon any obligation, covenant or agreement contained in this Agreement or any amendment hereto or in any CVR, or because of any indebtedness evidenced thereby, shall be had against any incorporator, as such or against any past, present or future

stockholder, officer, director or employee, as such, of the Company or of any successor, either directly or through the Company or any successor, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance of the CVRs by the holders thereof and as part of the consideration for the issue of the CVRs.

SIGNATURES

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

THE AES CORPORATION
as the Company

Attest:                          By:       /s/ Barry J. Sharp
                                       -----------------------------------
                                       Name:   Barry J. Sharp
                                       Title:  Executive Vice President and
                                               Chief Financial Officer

WELLS FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as the Trustee

Attest:                          By:      /s/ Jane Y. Schweiger
                                       ----------------------------------
                                       Name:  Jane Y. Schweiger
                                       Title: Vice President

EXHIBIT A

[FACE OF GLOBAL CVR]

THE AES CORPORATION

[CUSIP] [CINS] _______________

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS ALSO SUBJECT TO THE PROHIBITIONS ON TRANSFER SET FORTH IN THE CONTINGENT VALUE RIGHTS AGREEMENT (AS HEREIN DEFINED) AND MAY NOT BE TRANSFERRED OR EXCHANGED EXCEPT IN THE LIMITED CIRCUMSTANCE DESCRIBED THEREIN.

AES Corporation, a Delaware corporation (the "Company"), for value received, promises to pay to Cede & Co ("CEDE"), or its registered assigns, the Contingent Payment (as defined in the Contingent Value Rights Agreement described below) on the Contingent Payment Date (as defined in the Contingent Value Rights Agreement described below).

This being a Global Security deposited with The Depository Trust Company ("DTC") acting as depositary, and registered in the name of CEDE, a nominee of DTC, CEDE, as holder of record of this Global Security, shall be entitled to receive the Contingent Payment by wire transfer of immediately available funds.

This Contingent Value Right ("CVR") is being issued pursuant to the terms of and subject to the conditions of the Contingent Value Rights Agreement dated as of December 13, 2002 (the "Contingent Value Rights Agreement") between the Company and Wells Fargo Bank Minnesota, National Association, as trustee.

Reference is hereby made to the further provisions of this CVR set forth on the reverse hereof, which will for all purposes have the same effect as if set forth at this place.

IN WITNESS WHEREOF, the Company has caused this CVR to be signed manually or by facsimile by its duly authorized officers.

Date:                                   THE AES CORPORATION


                                        By:
                                           ------------------------------
                                           Name:

Title:

Title:

(Form of Trustee's Certificate of Authentication)

This is one of the CVRs described in the Contingent Value Rights Agreement referred to in this CVR.

WELLS FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee

[REVERSE SIDE OF CVR]

THE AES CORPORATION

CONTINGENT VALUE RIGHT

This CVR is being issued pursuant to the terms of and subject to the conditions of the Contingent Value Rights Agreement dated as of December 13, 2002 (the "Contingent Value Rights Agreement") between the Company and Wells Fargo Bank Minnesota, National Association, as Trustee (the "Trustee"). The terms and provisions contained in the Contingent Value Rights Agreement are incorporated by reference herein and made a part hereof. Reference is hereby made to the Contingent Value Rights Agreement for a full statement of the respective rights, limitations of rights, duties, obligations and immunities thereunder of the Company, the Trustee and the Holders of the CVRs. Terms not defined herein are used as defined in the Contingent Value Rights Agreement. Copies of the Contingent Value Rights Agreement can be obtained by contacting the Trustee.

By acceptance of this CVR the Holder consents to all the terms and provisions hereof including the terms and provisions of the Contingent Value Rights Agreement incorporated by reference herein.

1. Contingent Payment. THE AES CORPORATION, a Delaware corporation (the "Company", which definition shall include any successor thereto in accordance with the Contingent Value Rights Agreement) promises to pay the Contingent Payment to the holders of the CVRs on the Contingent Payment Date if such date occurs. Such payment shall be made exclusively in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts.

In the event that it is finally determined in good faith that the CILCORP Sale will not be consummated and that the condition for payment of the CVRs will not occur, the Company shall give to the Trustee and each registered holder notice of such determination. Upon such determination, absent manifest error, the CVRs shall terminate and become null and void and the Holders thereof shall have no further rights with respect thereto. The failure to give such notice or any defect therein shall not affect the validity of such determination.

2. Method of Payment. The Contingent Payment will be made to the Depositary as the registered holder of the CVRs. The Company expects that the Depositary, upon receipt of the Contingent Payment, will credit the accounts of persons who have accounts with the Depositary ("participants") with an amount proportionate to their respective beneficial interests in the total amount of CVRs

as shown on the records of the Depositary. The Company also expects that payments by participants to owners of beneficial interests in CVRs held through such participants will be governed by standing instructions and customary practices. Such payments will be the responsibility of such participants.

2. Paying Agent and Registrar. The Trustee will act as Paying Agent and registrar. The Company may change any Paying Agent, Registrar or co-Registrar without notice.

3. No Transfer or Exchange. The CVRs are in registered form without coupons. A Holder may not transfer or exchange the CVRs except in the limited circumstance set forth in the Contingent Value Rights Agreement.

4. Persons Deemed Owners. The registered holder of the CVR may be treated as the owner of it for all purposes.

5. Amendment, Supplement, Waiver. The Company and the Trustee may, without the consent of the holders of any outstanding CVRs, amend, waive or supplement the Contingent Value Rights Agreement or the CVRs for certain specified purposes, including, among other things, curing ambiguities, defects or inconsistencies, or making any other change that does not adversely affect the rights of any Holder in any material respect. Subject to Section 5.04 and
Section 7.02 of the Contingent Value Rights Agreement, other amendments and modifications of the Contingent Value Rights Agreement or the CVRs may be made by the Company and the Trustee with the consent of the Holders of not less than a majority of the outstanding CVRs.

6. Successor Corporation. When a successor corporation assumes all the obligation of its predecessor under the CVRs and the Contingent Value Rights Agreement and the transaction complies with the terms of Article 4 of the Contingent Value Rights Agreement, the predecessor corporation, subject to certain exceptions, will be released from those obligations.

7. Defaults and Remedies. Events of Default are set forth in the Contingent Value Rights Agreement.

Holders of CVRs may not enforce the Contingent Value Rights Agreement or the CVRs except as provided in the Contingent Value Rights Agreement. The Trustee may require indemnity reasonably satisfactory to it before it enforces the Contingent Value Rights Agreement or the CVRs. Subject to certain limitations, Holders of a majority of the then outstanding CVRs may direct the Trustee in its exercise of any trust or power.

8. 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.

9. 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 CVRs or the Contingent Value Rights Agreement or for any claim based on, in respect of or by reason of, such obligations or their creation. Each Holder of the CVRs by accepting a CVR waives and releases all such liability. The waiver and release are part of the consideration for the issue of the CVRs.

10. Authentication. This CVR shall not be valid until the Trustee signs the certificate of authentication on the other side of this CVR.

11. Abbreviations. Customary abbreviations may be used in the name of a Holder of CVRs, 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).

12. GOVERNING LAW. THE CONTINGENT VALUE RIGHTS AGREEMENT AND THIS CVR SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

The Company will furnish to any Holder of CVRs upon written request and without charge a copy of the Contingent Value Rights Agreement. 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

EXHIBIT B

DTC LEGEND

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS A BENEFICIAL INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL CVR ARE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL CVR ARE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE TRANSFER PROVISIONS OF THE CONTINGENT VALUE RIGHTS AGREEMENT.