EXHIBIT 1.4
[FORM OF PREFERRED SECURITIES
UNDERWRITING AGREEMENT]
$___________
THE AES CORPORATION
______ Preferred Securities
AES Trust [-] Guaranteed by
------------------
UNDERWRITING AGREEMENT
_______, 199_
Dear Sirs:
AES Trust [_] (the "Trust"), a statutory business trust organized under the
Business Trust Act (the "Delaware Act") of the State of Delaware (Chapter 38,
Title 12, of the Delaware Code, 12 Del. C. ss.3801 et seq.), proposes to issue
and sell ____________ shares of its ___% preferred trust securities (the "Firm
Securities") to the several underwriters named in Schedule I hereto (the
"Underwriters"). The Trust also proposes to issue and sell to the several
Underwriters not more than _______ additional shares of its ___% preferred trust
securities (the "Additional Securities") if requested by the Underwriters as
provided in Section 2 hereof. The Firm Securities and the Additional Securities
are herein collectively called the "Securities". The Securities will be
guaranteed by The AES Corporation, a Delaware corporation (the "Company") to the
extent set forth in the Prospectus (as defined herein).
It is understood that substantially contemporaneously with the offering and
sale of the Firm Securities to the Underwriters contemplated hereby, (i) the
Trust, its trustees (the "Trustees") and the Company shall take all necessary
action to adopt an Amended and Restated Declaration of Trust in substantially
the form of the Form of
Amended and Restated Declaration of Trust incorporated by reference as Exhibit
4.7 to the Registration Statement referred to below, (as so amended and
restated, the "Declaration") pursuant to which the Trust shall (x) issue and
sell the Securities to the Underwriters pursuant hereto and (y) issue [_] shares
of its [___]% common securities [(and up to an additional [_] shares of such
securities in connection with the issuance and sale of the Additional
Securities)] (the "Common Securities" and, together with the Securities, the
"Trust Securities") to the Company, in each case with such rights and
obligations as shall be set forth in such Declaration, (ii) the Company and The
Bank of New York, as Trustee, shall enter into an Indenture in substantially the
form of the Form of the Junior Subordinated Debt Trust Securities Indenture
incorporated by reference as Exhibit 4.4 to the Registration Statement referred
to below (as supplemented by the Supplemental Indenture substantially in the
form incorporated by reference as Exhibit 4.9 to the Registration Statement
referred to below, the "Indenture") providing for the issuance of
$[____________] in aggregate principal amount of the Company's Junior
Subordinated Debt Trust Securities Debentures, Series [_], due 20[__] (the
"Debentures"), (iii) the Company shall deposit such Debentures in the Trust in
conjunction with the consummation of the sale of the Securities to the
Underwriters contemplated hereby and (iv) the Company and
_________________________, as Guarantee Trustee, shall enter into a Guarantee
Agreement in substantially the form of the Form of Guarantee with respect to
Securities incorporated by reference as Exhibit 4.11 of the Registration
Statement referred to below (the "Guarantee") for the benefit of holders from
time to time of the Securities.
1 Registration Statement and Prospectus. The Trust and the Company have
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively called the "Securities Act"), a registration statement on Form
S-3, including a prospectus, relating to, among other things, certain preferred
securities of AES Trust III, IV and V, certain junior subordinated debt and
guarantees of preferred securities of AES Trust III, IV and V (collectively, the
"Shelf Securities"). The Trust and the Company also have filed with, or propose
to file with, the Commission pursuant to Rule 424 under the Securities Act a
prospectus supplement specifically relating to the Securities. The registration
statement as amended to the date of this Agreement is hereinafter referred to as
the "Base Registration Statement" and any registration statement filed pursuant
to Rule 462(b) under the Securities Act relating to the Securities is herein
referred to as the "Additional Registration Statement", and, together with the
Base Registration Statement, the "Registration Statement". The related
prospectus covering the Shelf Securities in the form first used to confirm sales
of the Securities is hereinafter referred to as the "Basic Prospectus". The
Basic Prospectus as supplemented by the prospectus supplement specifically
relating to the Securities in the form first used to confirm sales of the
Securities is hereinafter referred to as the "Prospectus". Any reference in this
Agreement to the Registration Statement, the Basic Prospectus, any preliminary
form of Prospectus
2
(a "preliminary prospectus") previously filed with the Commission pursuant to
Rule 424 or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act which were filed under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") on or before the date of this Agreement or
the date of the Basic Prospectus, any preliminary prospectus or the Prospectus,
as the case may be; and any reference to "amend", "amendment" or "supplement"
with respect to the Registration Statement, the Basic Prospectus, any
preliminary prospectus or the Prospectus shall be deemed to refer to and include
any documents filed under the Exchange Act after the date of this Agreement, or
the date of the Basic Prospectus, any preliminary prospectus or the Prospectus,
as the case may be, which are deemed to be incorporated by reference therein.
2 Agreements to Sell and Purchase. On the basis of the representations and
warranties contained in this Agreement, and subject to its terms and conditions,
the Company agrees to issue and sell and each Underwriter agrees, severally and
not jointly, to purchase from the Trust at a price per share of $_____ (the
"Purchase Price"), the number of Firm Securities set forth opposite the name of
such Underwriter in Schedule I hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Trust agrees to issue
and sell the Additional Securities and the Underwriters shall have the right to
purchase, severally and not jointly, up to _______ Additional Securities from
the Trust at the Purchase Price. Additional Securities may be purchased solely
for the purpose of covering over-allotments made in connection with the offering
of the Firm Securities. The Underwriters may exercise their right to purchase
Additional Securities in whole or in part from time to time by giving written
notice thereof to the Company within 30 days after the date of this Agreement.
You shall give any such notice on behalf of the Underwriters and such notice
shall specify the aggregate number of Additional Securities to be purchased
pursuant to such exercise and the date for payment and delivery thereof. The
date specified in any such notice shall be a business day (i) no earlier than
the Closing Date (as hereinafter defined), (ii) no later than ten business days
after such notice has been given and (iii) no earlier than two business days
after such notice has been given. If any Additional Securities are to be
purchased, each Underwriter, severally and not jointly, agrees to purchase from
the Trust the number of Additional Securities (subject to such adjustments to
eliminate fractional shares as you may determine) which bears the same
proportion to the total number of Additional Securities to be purchased from the
Trust as the number of Firm Securities set forth opposite the name of such
Underwriter in Schedule I bears to the total number of Firm Securities.
In view of the fact that the proceeds of the sale of the Securities will be
used to purchase Debentures, the Company agrees to pay as compensation
3
("Underwriter's Compensation") for the Underwriters' arranging the investment
therein of such proceeds an amount in immediately available funds of $ per
Security purchased hereunder.
[The Trust and the Company hereby agree not to offer, sell, contract to
sell, grant any option to purchase, or otherwise dispose of any preferred trust
securities or any securities convertible into or exercisable or exchangeable for
such preferred trust securities or in any other manner transfer all or a portion
of the economic consequences associated with the ownership of any such preferred
trust securities, except to the Underwriters pursuant to this Agreement, for a
period of ___ days after the date of the Prospectus without the prior written
consent of ____________________________.]
3 Terms of Public Offering. The Company is advised by you that the
Underwriters propose (i) to make a public offering of their respective portions
of the Securities as soon after the effective date of the Registration Statement
as in your judgment is advisable and (ii) initially to offer the Securities upon
the terms set forth in the Prospectus.
4 Delivery and Payment. Delivery to the Underwriters of and payment for the
Firm Securities and payment of the related Underwriters' Compensation shall be
made at 10:00 A.M., New York City time, on ______, 199_, or at such other time
or such other date as the Underwriters and the Company may agree upon in
writing. The time and date of such payment are referred to herein as the
"Closing Date". As used herein, the term "Business Day" means any day other than
a day on which banks are permitted or required to be closed in New York City.
Delivery to the Underwriters of and payment for any Additional Securities
to be purchased by the Underwriters and payment of the related Underwriters'
Compensation shall be made at such place as you shall designate at 10:00 A.M.,
New York City time, on the date specified in the applicable exercise notice
given by you pursuant to Section 2 (an "Option Closing Date"). Any such Option
Closing Date and the location of delivery of and the form of payment for such
Additional Securities may be varied by agreement between you and the Company.
Certificates for the Securities shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full business days prior to the Closing Date or an Option Closing Date, as the
case may be. Such certificates shall be made available to you for inspection not
later than 9:30 A.M., New York City time, on the business day next preceding the
Closing Date or the applicable Option Closing Date, as the case may be.
Certificates in definitive form evidencing the Securities shall be delivered to
you on the Closing Date or the applicable Option Closing Date, as the case may
be with any transfer taxes thereon duly paid by the Company, for the respective
accounts of the several Underwriters, against payment of the Purchase
4
Price therefor by wire transfer in immediately available funds to the account
specified by the Company to the Underwriters (no later than noon the Business
Day prior to the Closing Date or the applicable Option Closing Date, as the case
may be) at the office of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the Company.
5 Agreements of the Company. The Company agrees with you:
(a) To file the Prospectus in a form approved by you with the
Commission within the time periods specified by Rule 424; and to file
promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Securities; and to furnish
copies of the Prospectus to the Underwriters in New York City prior to
10:00 a.m., New York City time, on the Business Day next succeeding the
date of this Agreement in such quantities as the Underwriters may
reasonably request;
(b) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) when any post-effective amendment to the
Registration Statement has been filed or becomes effective, (ii) of any
request by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the suspension of
qualification of the Securities for offering or sale in any jurisdiction,
or the initiation of any proceeding for such purposes, and (iv) of the
happening of any event during the period referred to in paragraph (e) below
which makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires the making of any
additions to or changes in the Registration Statement or the Prospectus in
order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to
obtain the withdrawal or lifting of such order at the earliest possible
time.
(c) To furnish to you three signed copies of the Registration
Statement as first filed with the Commission and of each amendment to it,
including all exhibits thereto and documents incorporated by reference
therein, and to furnish to you and each Underwriter designated by you such
number of conformed copies of the Registration Statement as so filed and of
each amendment to it, without exhibits thereto and documents incorporated
by reference therein, as you may reasonably request.
5
(d) Not to file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective, or
to make any amendment or supplement to the Prospectus of which you shall
not previously have been advised or to which you shall reasonably object;
and to prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or supplement to the
Prospectus which may be necessary or advisable in connection with the
distribution of the Securities by you, and to use its best efforts to cause
the same to become promptly effective.
(e) Promptly after the Registration Statement becomes effective, and
from time to time thereafter for such period as in the opinion of counsel
for the Underwriters a prospectus is required by law to be delivered in
connection with sales by an Underwriter or a dealer, to furnish to each
Underwriter and dealer as many copies of the Prospectus (and of any
amendment or supplement to the Prospectus) as such Underwriter or dealer
may reasonably request.
(f) If during the period specified in paragraph (e) any event shall
occur as a result of which, in the opinion of counsel for the Underwriters,
it becomes necessary to amend or supplement the Prospectus in order to make
the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary to amend or supplement the Prospectus to comply with any law,
forthwith to prepare and file with the Commission an appropriate amendment
or supplement to the Prospectus so that the statements in the Prospectus,
as so amended or supplemented, will not in the light of the circumstances
when it is so delivered, be misleading, or so that the Prospectus will
comply with law, and to furnish to each Underwriter and to such dealers as
you shall specify, such number of copies thereof as such Underwriter or
dealers may reasonably request.
(g) Prior to any public offering of the Securities, to cooperate with
you and counsel for the Underwriters in connection with the registration or
qualification of the Securities for offer and sale by the several
Underwriters and by dealers under the state securities or Blue Sky laws of
such jurisdictions as you may request, to continue such qualification in
effect so long as required for distribution of the Securities and to file
such consents to service of process or other documents as may be necessary
in order to effect such registration or qualification.
(h) To mail and make generally available to its securityholders as
soon as reasonably practicable an earnings statement covering a period of
at least twelve months after the effective date of the Registration
Statement (but in no event commencing later than 90 days after such date)
which shall satisfy the
6
provisions of Section 11(a) of the Securities Act, and to advise you in
writing when such statement has been so made available.
(i) During the period of five years after the date of this Agreement,
or for such shorter period if the Securities no longer remain outstanding,
(i) to mail as soon as reasonably practicable after the end of each fiscal
year to the record holders of its Securities a financial report of the
Company and its subsidiaries on a consolidated basis (and a similar
financial report of all unconsolidated subsidiaries, if required by
Regulation S-X), all such financial reports to include a consolidated
balance sheet, a consolidated statement of operations, a consolidated
statement of cash flows and a consolidated statement of shareholders'
equity as of the end of and for such fiscal year, together with comparable
information as of the end of and for the preceding year, certified by
independent certified public accountants, and (ii) to mail and make
generally available as soon as practicable after the end of each quarterly
period (except for the last quarterly period of each fiscal year) to such
holders, a consolidated balance sheet, a consolidated statement of
operations and a consolidated statement of cash flows (and similar
financial reports of all unconsolidated subsidiaries, if required by
Regulation S-X) as of the end of and for such period, and for the period
from the beginning of such year to the close of such quarterly period,
together with comparable information for the corresponding periods of the
preceding year.
(j) During the period referred to in paragraph (i), to furnish to you
as soon as available a copy of each report or other publicly available
information of the Company mailed to the securityholders of the Company or
filed with the Commission and such other publicly available information
concerning the Company and its subsidiaries as you may reasonably request.
(k) To pay all costs, expenses, fees and taxes incident to the
performance of its obligations hereunder, including without limiting the
generality of the foregoing, all costs and expenses incident to (i) the
preparation, issuance, and delivery of the certificates for the Securities,
including any expenses of the Trustee, (ii) the preparation, printing,
filing and distribution under the Securities Act of the Registration
Statement (including financial statements and exhibits), each preliminary
prospectus and all amendments and supplements to any of them prior to or
during the period specified in paragraph (e), (iii) the printing and
delivery of the Prospectus and any Preliminary Prospectus and all
amendments or supplements to it during the period specified in paragraph
(e), (iv) the printing and delivery of this Agreement, the Indenture,
Preliminary and Supplemental Blue Sky Memoranda and all other agreements,
memoranda, correspondence and other documents printed and delivered in
connection with the offering of the Securities (including in each case any
disbursements of counsel for the Underwriters relating to such printing and
delivery), (v) the registration or qualification of the Securities
7
for offer and sale under the securities or Blue Sky laws of the several
states (including in each case the fees and disbursements of counsel for
the Underwriters relating to such registration or qualification and
memoranda relating thereto), (vi) filings and clearance with the National
Association of Securities Dealers, Inc. in connection with the offering,
(vii) furnishing such copies of the Registration Statement, the Prospectus
and all amendments and supplements thereto as may be requested for use in
connection with the offering or sale of the Securities by the Underwriters
or by dealers to whom Securities may be sold and (viii) the rating of the
Securities including, without limitation, fees payable to rating agencies
in connection therewith.
(l) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company
prior to the Closing Date and to satisfy all conditions precedent to the
delivery of the Securities.
6 Representations and Warranties of the Company. The Company represents and
warrants to each Underwriter that:
(a) The Registration Statement has been declared effective by the
Commission under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of the
Company, threatened by the Commission; and the Registration Statement and
Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) comply, or will comply, as the case
may be, in all material respects with the Securities Act and the Trust
Indenture Act of 1939, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Trust Indenture Act"), and do not
and will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the date of the Prospectus
and any amendment or supplement thereto, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and the
Prospectus, as amended or supplemented at the Closing Date, if applicable,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that the
foregoing representations and warranties shall not apply to (i) that part
of the Registration Statement which constitutes the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act of
the Trustee, and (ii) statements or omissions in the Registration Statement
or the Prospectus made in reliance upon and in conformity
8
with information relating to any Underwriter furnished to the Company in
writing by such Underwriter through the Representatives expressly for use
therein;
(b) The documents incorporated by reference in the Prospectus, when
they were filed with the Commission, conformed in all material respects to
the requirements of the Exchange Act, and none of such documents contained
an untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and any further documents so
filed and incorporated by reference in the Prospectus, when such documents
are filed with the Commission will conform in all material respects to the
requirements of the Exchange Act, as applicable, and will not contain an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(c) The Company and each of its subsidiaries and each of its
affiliates which meets the criteria in the definition of "significant
subsidiary" pursuant to Rule 1-02(w) of Regulation S-X under the Securities
Act (each, a "Principal Subsidiary") has been duly incorporated, is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority
required to carry on its business as it is currently being conducted and to
own, lease and operate its properties, and each is duly qualified and is in
good standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure
to be so qualified would not have a material adverse effect on the
business, financial condition or results of operations of the Company and
the Principal Subsidiaries, taken as a whole.
(d) Except as set forth in the Registration Statement or on Annex I
hereto, all of the outstanding shares of capital stock of, or other
ownership interests in, the Principal Subsidiaries have been duly and
validly authorized and issued and are fully paid and non-assessable, and
are owned by the Company or one of the Principal Subsidiaries, free and
clear of any security interest, claim, lien, encumbrance or adverse
interest of any nature.
(e) As of the Closing Date, the Trust Securities will have been duly
authorized by the Declaration and (x) when the Securities are issued in
accordance with the terms of this Agreement and delivered to and paid for
by the Underwriters and (y) the Common Securities are issued against
payment therefor as provided in the Declaration, such Trust Securities will
be duly and validly is sued and (subject to the terms of the Declaration)
will be fully paid and nonassess-
9
able undivided beneficial interests in the assets of the Trust, not subject
to any preemptive or similar rights. Holders of Trust Securities will be
entitled to the same limitation of personal liability extended to
stockholders of private corpora tions for profit organized under the
General Corporation Law of the State of Delaware.
(f) As of the Closing Date, the Declaration will have been duly
authorized, executed and delivered by the Company and the Trustees and will
be a valid and binding obligation of the Company and the Trustees,
enforceable against the Company and the Trustees in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(g) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act, is and will be treated
as a "grantor trust" for Federal income tax purposes under existing law,
has the business trust power and authority to conduct its business as
presently conducted and as described in the Registration Statement and
Prospectus, and is not required to be authorized to do business in any
other jurisdiction.
(h) The Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by the Company and
is a valid and binding agreement of the Company, enforceable in accordance
with its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and by equitable principles of general applicability; the
Debentures have been duly authorized and when executed and authenticated in
accordance with the provisions of the Indenture and delivered to the Trust
against payment therefore as provided in the Prospectus will be entitled to
the benefits of the Indenture and the Indenture and the Debentures will
conform in all respects to statements relating thereto contained in the
Registration Statement and the Prospectus.
(i) The Guarantee has been duly qualified under the Trust Indenture
Act of 1939, as amended, and, as of the Closing Date, assuming due authori
zation, execution and delivery by the Company thereunder, of the Guarantee,
the Guarantee will be a valid and binding agreement of the Company,
enforceable in accordance with its terms subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights and remedies
generally and to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
10
(j) This Agreement has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company (except as
rights to indemnity and contribution hereunder may be limited by applicable
law).
(k) The Securities conform as to legal matters to the description
thereof contained in the Registration Statement and the Prospectus.
(l) The Company is not in violation of its Restated Certificate of
Incorporation or its By-laws and neither the Trust nor the Principal
Subsidiaries are in violation of, as applicable, their respective
Declaration, charter or, except for any such violations which would not
have a material adverse effect on the Trust, the Company and its
subsidiaries taken as a whole, their by-laws, nor is the Trust, the Company
or any of the Principal Subsidiaries, except as set forth in the
Registration Statement, in default in, as applicable, the performance of
any obligation, agreement or condition contained in any bond, debenture,
note or any other evidence of indebtedness or in any other agreement,
indenture or instrument to which the Trust, the Company or any of the
Principal Subsidiaries is a party or by which the Trust, the Company or any
of the Principal Subsidiaries or their respective property is bound except
for any such defaults which, individually or in the aggregate, would not
have a material adverse effect on the business, financial condition or
results of operations of the Company and the Principal Subsidiaries, taken
as a whole.
(m) The execution, delivery and performance of this Agreement, the
Indenture, the Debentures, the Guarantee, the Declaration and the
Securities and the compliance by the Trust and the Company with all the
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not require any consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body (except such as may be required under the
Securities Act, the Exchange Act, the Trust Indenture Act, or other
securities or Blue Sky laws) and will not conflict with or constitute a
breach of any of the terms or provisions of, or a default under, the
Declaration, charter or by-laws, as applicable, or any agreement, indenture
or other instrument to which the Trust, the Company or any of the Principal
Subsidiaries is a party or by which the Trust, the Company or any of the
Principal Subsidiaries or their respective property is bound, or violate or
conflict with any laws, administrative regulations or rulings or court
decrees applicable to the Trust, the Company, any of the Principal
Subsidiaries or their respective property (except state securities or Blue
Sky laws).
(n) Except as set forth in the Registration Statement, there are no
material legal or governmental proceedings pending to which the Trust, the
Company or any of the Principal Subsidiaries is a party or to which any of
their
11
respective property is the subject, and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated. No contract
or document of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement is not so described or filed as required.
(o) Except as set forth in the Registration Statement, neither the
Company nor any of the Principal Subsidiaries has violated any U.S. federal
or state law relating to discrimination in the hiring, promotion or pay of
employees nor any applicable U.S. federal or state wages and hours laws, or
any provisions of the Employee Retirement Income Security Act or the rules
and regulations promulgated thereunder, which in each case could result in
any material adverse change in the business, financial condition or results
of operations of the Company and the Principal Subsidiaries, taken as a
whole.
(p) Except as set forth in the Registration Statement, the Company and
each of the Principal Subsidiaries has good and marketable title, free and
clear of all liens, claims, encumbrances and restrictions which are
required to be described in the Registration Statement except liens for
taxes not yet due and payable, to all property and assets described in the
Registration Statement as being owned by it. All leases to which the
Company or any of the Principal Subsidiaries is a party are valid and
binding and no default by the Company or any such Principal Subsidiary, or,
to the best of the Company's knowledge, by any other party to any such
leases, has occurred or is continuing thereunder, which could result in any
material adverse change in the business, financial condition or results of
operations of the Trust, the Company and the Principal Subsidiaries taken
as a whole, and the Company and the Principal Subsidiaries enjoy peaceful
and undisturbed possession under all such leases to which any of them is a
party as lessee with such exceptions as do not materially interfere with
the use made by the Company or such Principal Subsidiary.
(q) Deloitte & Touche are independent public accountants with respect
to the Company as required by the Securities Act.
(r) The financial statements, together with related schedules and
Notes forming part of the Registration Statement and the Prospectus (and
any amendment or supplement thereto), present fairly the consolidated
financial position, results of operations and statements of cash flow of
the Company and its subsidiaries on the basis stated in the Registration
Statement at the respective dates and for the respective periods to which
they apply; such statements and related schedules and Notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical
12
information and data set forth in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), in all material
respects, present fairly the information purported to be shown thereby at
the respective dates or for the respective periods to which they apply and
have been prepared on a basis consistent with such financial statements and
the books and records of the Company.
(s) Each of the Company and the Principal Subsidiaries has such
permits, licenses, franchises and authorizations of governmental or
regulatory authorities ("permits") which are required to have been obtained
by it prior to the date hereof and which are material to the ownership or
leasing and operation of or construction of its respective properties and
to the conduct of its business in the manner described in the Prospectus,
except for any such permits, the failure of which to have, individually or
in the aggregate, would not have a material adverse effect on the business,
financial condition or results of operations of the Company and the
Principal Subsidiaries, taken as a whole, and subject to such
qualifications as may be set forth in the Registration Statement; each of
the Company and the Principal Subsidiaries has fulfilled and performed all
of its material obligations with respect to such permits required to have
been fulfilled and performed prior to the date hereof and no event has
occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or result in any other material
impairment of the rights of the holder of any such permit, subject in each
case to such qualification as may be set forth in the Registration
Statement; and, except as described in the Registration Statement, such
permits do not materially interfere with the use or operation of the
electric power generation facilities of the Principal Subsidiaries as
currently used or operated or as contemplated to be used or operated.
(t) Each of the AES Beaver Valley, the AES Deepwater, the AES
Placerita, the AES Shady Point, the AES Barbers Point and the AES Thames
facilities (each as defined in the Registration Statement) is a "qualifying
cogeneration facility" under the Federal Power Act ("FPA"), as amended by
Section 201 of the Public Utility Regulatory Policies Act of 1978 ("PURPA")
and the FERC's regulations promulgated thereunder, and each such facility's
current use, operation and ownership are consistent with such facility's
status as a "qualifying cogeneration facility".
(u) None of the Trust, the Company or any of the Principal
Subsidiaries is (i) subject to regulation as a "holding company" or a
"subsidiary company" of a holding company or a "public utility company"
under Section 2(a) of the Public Utility Holding Company Act of 1935
("PUHCA"), except that the Company and its subsidiary in the United
Kingdom, Applied Energy Services Electric Limited, are exempt holding
companies under Section 3(a)(5) of PUHCA
13
by order of the Commission, (ii) subject to regulation under the FPA, other
than as contemplated by 18 C.F.R. Section 292.601(c), or (iii) except as
described in the Registration Statement (other than contained in the
exhibits thereto), subject to regulation by any state law with respect to
rates or the financial or organizational regulation of electric utilities.
(v) Neither the Trust nor the Company is an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(w) Except as set forth in the Registration Statement, each of the
Company, each Principal Subsidiary, and any other subsidiary or entity
which the Company may be deemed to operate (together with the Principal
Subsidiaries, the "Subsidiaries") is in compliance with all applicable
foreign, federal, state and local environmental (including, without
limitation, the Comprehensive Environmental Response, Compensation &
Liability Act of 1980, as amended), safety or similar law, rule and
regulation, and there are no costs or liabilities associated with any such
law, rule or regulation, except for any such noncompliances, costs or
liabilities which, individually or in the aggregate, would not have a
material adverse effect on the business, financial condition or results of
operations of the Company and the Subsidiaries, taken as a whole.
(x) The Trust and the Company have complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
7 Indemnification. (a) The Company agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages, liabilities and
judgments (i) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (other than that part of
the Registration Statement that constitutes the Form T-1) or the Prospectus (as
amended or supplemented if the Trust and the Company shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriter furnished in writing
to the Company by or on behalf of any Underwriter through you expressly for use
therein; provided, however, that the foregoing indemnity agreement with respect
to any preliminary prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, claims, damages, liabilities or
judgments purchased Securities, or any person controlling such Underwriter, if a
copy of the Prospectus (as then amended
14
or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Securities to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such losses, claims, damages, liabilities or judgments.
(b) In case any action shall be brought against any Underwriter or any
person controlling such Underwriter, based upon any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement thereto
and with respect to which indemnity may be sought against the Company, such
Underwriter shall promptly notify the Company in writing and the Company shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses. Any
Underwriter or any such controlling person shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless (i) the employment of such counsel
has been specifically authorized in writing by the Company, (ii) the Company has
failed to assume the defense and employ counsel or (iii) the named parties to
any such action (including any impleaded parties) include both such Underwriter
or such controlling person and the Company and such Underwriter or such
controlling person shall have been advised by such counsel that there may be one
or more legal defenses available to it which are different from or additional to
those available to the Company (in which case the Company shall not have the
right to assume the defense of such action on behalf of such Underwriter or such
controlling person, it being understood, however, that the Company shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all such Underwriters and controlling persons, which firm shall be designated in
writing by __________________ and that all such fees and expenses shall be
reimbursed as they are incurred). The Company shall not be liable for any
settlement of any such action effected without the written consent of the
Company but if settled with the written consent of the Company, the Company
agrees to indemnify and hold harmless any Underwriter and any such controlling
person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 10 business days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement.
15
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless (i) the Trust, the Trustees, its officers who sign the
Registration Statement and any person controlling the Trust within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act and
(ii) the Company, its directors, its officers who sign the Registration
Statement and any person controlling the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, in each such case to
the same extent as the foregoing indemnity from the Company to each Underwriter
but only with reference to information relating to such Underwriter furnished in
writing by or on behalf of such Underwriter through you expressly for use in the
Registration Statement, the Prospectus, any preliminary prospectus or any
amendment or supplement thereto. In case any action shall be brought against the
Trust, the Trustees, its officers who sign the Registration Statement or any
person controlling the Trust or against the Company, any of its directors, any
such officer or any person controlling the Company based on the Registration
Statement, the Prospectus or any preliminary prospectus or any amendment or
supplement thereto and in respect of which indemnity may be sought against any
Underwriter, the Underwriter shall have the rights and duties given to the
Company (except that if the Company shall have assumed the defense thereof, such
Underwriter shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Underwriter), and the Trust, the
Trustees, its officers who sign the Registration Statement and any person
controlling the Trust, the Company, its directors, any such officers and any
person controlling the Company shall have the rights and duties given to the
Underwriter, by Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7 is unavailable to
an indemnified party in respect of any losses, claims, damages, liabilities or
judgments referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities and judgments (i) in such proportion as is appropriate to reflect
the relative benefits received by the Trust and the Company on the one hand and
the Underwriters on the other hand from the offering of the Securities or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Trust, the Company and the Underwriters in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable
16
considerations. The relative benefits received by the Trust, the Company and the
Underwriters shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Trust and
the Company, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the Securities, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Trust, the Company and the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Trust, the Company or the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Trust, the Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7(d) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
was offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 7(d) are several in proportion to the
respective number of Securities purchased by each of the Underwriters hereunder
and not joint.
8 Conditions of Underwriters' Obligations. The several obligations of the
Underwriters to purchase the Firm Securities under this Agreement are subject to
the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the same
force and effect as if made on and as of the Closing Date.
(b) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have
17
been commenced or shall be pending before or, to the best of the Company's
knowledge, contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have been any downgrading, nor
shall any notice have been given of any intended or potential downgrading
or of any review for a possible change that does not indicate the direction
of the possible change, in the rating accorded to any of the Company's or
the Trust's securities or to any securities of any other AES Trust that is
organized in substantially the form of, and for substantially the same
purpose as, the Trust and whose common equity capital is wholly owned by
the Company or any subsidiary, by any "nationally recognized statistical
rating organization", as such term is defined for purposes of Rule
436(g)(2) under the Securities Act.
(d)(i) Since the date of the latest balance sheet included in the
Registration Statement, there shall not have been any material adverse
change, or any development involving a prospective material adverse change,
in the condition, financial or otherwise, or in the earnings, affairs or
business prospects, whether or not arising in the ordinary course of
business, of the Company and the Principal Subsidiaries, taken as a whole,
from that described in the Registration Statement, (ii) since the date of
the latest balance sheet included in the Registration Statement there shall
not have been any material change, or any development involving a
prospective material adverse change, in the capital stock or in the
long-term debt of the Company from that set forth in the Registration
Statement, (iii) the Trust and the Company shall have no liability or
obligation, direct or contingent, which is material to the Trust, the
Company and the Principal Subsidiaries, taken as a whole, other than those
reflected in the Registration Statement and (iv) on the Closing Date you
shall have received a certificate dated the Closing Date, signed by such
executive officers of the Company as you may designate, and such other
certificates of executive officers and key personnel of the Principal
Subsidiaries as you may specify confirming the matters set forth in
paragraphs (a), (b), (c) and (d) of this Section 8.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Counsel of AES, to the effect that:
(i) the Company and each of the Principal Subsidiaries (other
than Principal Subsidiaries that are incorporated or organized outside
of the United States as to which ▇▇. ▇▇▇▇▇▇▇▇ expresses no opinion)
has been duly incorporated, is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation and
has the corporate
18
power and authority required to carry on its business as it is
currently being conducted and to own its properties;
(ii) the Company and each of the Principal Subsidiaries (other
than Principal Subsidiaries that are incorporated or organized outside
of the United States as to which ▇▇. ▇▇▇▇▇▇▇▇ expresses no opinion) is
duly qualified and is in good standing as a foreign corporation
authorized to do business in each jurisdiction in which the nature of
its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not
have a material adverse effect on the Company and the Principal
Subsidiaries, taken as a whole;
(iii) except as set forth in the Registration Statement or
otherwise set forth on Annex I, all of the outstanding shares of
capital stock of, or other ownership interests in, the Principal
Subsidiaries have been duly and validly authorized and issued and are
fully paid and non-assessable, and are owned of record, and to the
knowledge of such counsel, after due inquiry, beneficially, by the
Company or the Principal Subsidiary as set forth in such opinion; and
such counsel, after due inquiry, is not aware of any security
interest, claim, lien, encumbrance or adverse interest of any nature
on such shares or other ownership interests except as set forth in the
Registration Statement or in Annex I;
(iv) the Company is not in violation of its Restated Certificate
of Incorporation or in violation of its By-laws and none of the
Principal Subsidiaries is in violation of its respective charter or
their by-laws, except for any such violations which would not have a
material adverse effect on the Trust, the Company and its subsidiaries
taken as a whole;
(v) the execution, delivery and performance of this Agreement,
the Indenture, Debentures, Guarantee and Declaration by the Company,
compliance by the Trust and the Company with all the provisions hereof
and thereof, issuance of the Securities and the consummation of the
transactions contemplated hereby and thereby will not require any
consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental body
(except such as may be required under the Securities Act, the Exchange
Act, the Trust Indenture Act or other securities or Blue Sky laws) and
will not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the Declaration, charter or by-laws
of the Trust, the Company or any of the Principal Subsidiaries or any
agreement, indenture or other instrument known to such counsel, to
which the Trust, the Company or any of the Principal Subsidiaries is a
party or by which the Trust, the Company or
19
any of the Principal Subsidiaries or their respective properties are
bound that is material to the Trust, the Company and its Principal
Subsidiaries, taken as a whole, or violate or conflict with any laws,
administrative regulations or rulings or court decrees known to such
counsel, after due inquiry, applicable to the Trust, the Company or
any of the Principal Subsidiaries or their respective properties;
(vi) such counsel does not know of any legal or governmental
proceeding pending or threatened to which the Trust, the Company or
any of the Principal Subsidiaries is a party or to which any of their
respective property is subject which is required to be described in
the Registration Statement or the Prospectus and is not so described,
or of any contract or other document which is required to be described
in the Registration Statement or the Prospectus or is required to be
filed as an exhibit to the Registration Statement which is not
described or filed as required;
(vii) each of the applicable Principal Subsidiaries has obtained
all permits, licenses, franchises and authorizations of governmental
or regulatory authorities ("permits") which are required to have been
obtained by it prior to the date hereof and which are material to the
construction, ownership or leasing and operation of each of the
Principal Subsidiaries, as the case may be, as contemplated by the
Registration Statement, except for any such permits, the failure to
have obtained which, individually or in the aggregate would not have a
material adverse effect on the business, financial condition or
results of operations of the Trust, the Company and the Principal
Subsidiaries, taken as a whole, and subject to such qualifications as
may be set forth in the Registration Statement, and all such permits
are in full force and effect; and such counsel has no reason to
believe that any other permits which may be material to the
construction, ownership or leasing and operation of such facilities
will not be obtained in due course;
(viii) each of the AES Beaver Valley, the AES Deepwater, the AES
Placerita, the AES Shady Point, the AES Barbers Point and the AES
Thames facilities is a "qualifying cogeneration facility" under the
FPA, as amended by Section 201 of PURPA and the FERC regulations
promulgated thereunder, and, to the best of such counsel's knowledge,
after due inquiry, each such facility's current use, operation and
ownership are consistent with such facility's status as a "qualifying
cogeneration facility";
(ix) none of the Trust, the Company nor any of the Principal
Subsidiaries is (i) subject to regulation as a "holding company" or a
20
"subsidiary company" of a holding company or an "affiliate" of a
subsidiary or holding company or a "public utility company" under
Section 2(a) of PUHCA, except that the Company and its subsidiary in
the United Kingdom, Applied Energy Services Electric Limited, are
exempt holding companies under Section 3(a)(5) of PUHCA by order of
the Commission, (ii) subject to regulation under the FPA, other than
as contemplated by 18 C.F.R. Section 292.601(c), or (iii) except as
described in the Registration Statement, subject to regulation under
any state law with respect to the rates or the financial or
organizational regulation of electric utilities; and
(x) neither the Trust nor the Company is an "investment company"
or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Company, to the effect
that:
(i) the Debentures have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Trust as set forth in the
Prospectus, will be entitled to the benefits of the Indenture and will
be valid and binding obligations of the Company enforceable in
accordance with their terms except as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or similar laws affecting creditors' rights
generally and by equitable principles of general applicability;
(ii) this Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company (except as rights to indemnity and contribution hereunder may
be limited by applicable law);
(iii) the Indenture and the Guarantee have been duly qualified
under the Trust Indenture Act, and the Indenture, Declaration and
Guarantee have been duly authorized, executed and delivered by the
Company and (assuming the due authorization, execution and delivery
thereof by the respective Trustees) are valid and binding agreements
of the Company, enforceable in accordance with their terms except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws
21
affecting creditors' rights generally and be equitable principles of
general applicability;
(iv) the Securities conform in all material respects as to legal
matters to the description thereof contained in the Registration
Statement and the Prospectus;
(v) the Registration Statement has become effective under the
Securities Act (assuming compliance with clause (2) of Rule 462(b) in
the case of the Additional Registration Statement) and, to the best of
such counsel's knowledge, no stop order suspending its effectiveness
has been issued and no proceedings for that purpose are pending before
or contemplated by the Commission;
(vi) the statements under the captions "____________" in the
Prospectus, insofar as such statements constitute a summary of the
legal matters, documents or proceedings specifically referred to
therein, fairly present all the material information called for with
respect to such legal matters, documents or proceedings;
(vii) except for the order of the Commission making the
Registration Statement effective and permits and similar
authorizations required under the securities or Blue Sky laws of
certain states, no consent, approval, authorization or other order of
any regulatory body, administrative agency or other governmental body
is legally required for the valid issuance and sale of [the Securities
to the Underwriters as contemplated by this Agreement or the public
offering of the Securities contemplated by the Prospectus]; and
(viii) the Registration Statement and the Prospectus and any
supplement or amendment thereto (except for financial statements and
other financial and statistical information included or incorporated
by reference therein as to which no opinion need be expressed) comply
as to form in all material respects with the Securities Act.
In addition, ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ will deliver a separate letter to
the effect that such counsel has participated in conferences with
directors, officers and other representatives of the Company and
representatives of the independent public accountants for the Company, at
which conferences the contents of the Registration Statement and related
matters were discussed, and, although such counsel has not independently
verified and is not passing upon and assume no responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement, except as specified, no facts have come to
22
such counsel's attention which lead such counsel to believe that the
Registration Statement (other than any financial statements or other
financial or statistical information included or incorporated by reference
therein and that part of the Registration Statement that constitutes the
Form T-1 as to which no opinion is expressed) at its effective date
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements contained therein not misleading, or that the Prospectus as of
its date or the Closing Date (other than any financial statements or other
financial or statistical information included or incorporated by reference
therein as to which no opinion is expressed), contained any untrue
statement of a material fact or omitted to state any material fact
necessary to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading.
In rendering their opinions above, ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ may rely as
to factual matters on such certificates of the Company's officers or of
governmental officials as they may deem relevant or necessary for such
opinions and as to matters governed by other than federal or New York law
or by the General Corporation Law of Delaware on opinions of local counsel.
In addition, ▇▇. ▇▇▇▇▇▇▇▇ will deliver a separate letter to the effect
that such counsel has participated in conferences with directors, officers
and other representatives of the Company and representatives of the
independent public accountants for the Company, at which conferences the
contents of the Registration Statement and related matters were discussed,
and, although such counsel has not independently verified and is not
passing upon and assume no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement, except
as specified, no facts have come to such counsel's attention which lead
such counsel to believe that the Registration Statement (other than any
financial statements or other financial or statistical information included
or incorporated by reference therein and that part of the Registration
Statement that constitutes the Form T-1 as to which no opinion is
expressed) at its effective date contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements contained therein not
misleading, or that the Prospectus as of its date or the Closing Date
(other than any financial statements or other financial or statistical
information included or incorporated by reference therein as to which no
opinion is expressed), contained any untrue statement of a material fact or
omitted to state any material fact necessary to make the statements
contained therein, in the light of the circumstances under which they were
made, not misleading.
23
In rendering the opinions above, ▇▇. ▇▇▇▇▇▇▇▇ may rely as to factual
matters on such certificates of the Company's officers or of governmental
officials as he may deem relevant or necessary for such opinions and as to
matters governed by other than federal or New York law or by the General
Corporation Law of Delaware on opinions of local counsel.
(g) You shall have received on the Closing Date an opinion, dated the
Closing Date, of ___________, counsel for the Underwriters, as to the
matters referred to in clauses (i), (ii), (iii), (vi) (but only with
respect to the statements under the captions "Description of __________"
and "Underwriting") and (viii) of the foregoing paragraph (f).
With respect to subparagraph (viii) of paragraph (f) above and the
final subparagraph of this paragraph (g), __________ may state that their
opinion and belief is based upon their participation in the preparation of
the Registration Statement and the Prospectus and any amendments or
supplements thereto (but not including documents incorporated therein by
reference) and review and discussion of the contents thereof (including
documents incorporated therein by reference), but is without independent
check or verification except as specified.
(h) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, special counsel for the Trust, to the
effect that:
(i) the Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act and under the
Declara tion and the Delaware Act has the business trust power and
authority to conduct its business as described in the Registration
Statement and Prospectus;
(ii) assuming due authorization, execution and delivery of the
Declaration by the Company and the Trustees, the Declaration is a
legal, valid and binding agreement of the Company and the Trustees,
enforceable against the Company and the Trustees in accordance with
its terms, except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership, reorganization,
liquidation, fraudulent conveyance or other similar laws relating to
or affecting the rights and remedies of creditors generally and (b)
principles of equity, including applicable laws relating to fiduciary
duties (regardless of whether considered and applied in a proceeding
in equity or at law);
(iii) under the Declaration and the Delaware Act, the execution
and delivery of this Agreement by the Trust, and the performance by
the
24
Trust of its obligations hereunder, have been duly authorized by all
business trust action on the part of the Trust;
(iv) the Trust Securities have been duly authorized by the
Declaration and (x) when the Securities are issued in accordance with
the terms of this Agreement and delivered to and paid for by the
Underwriters and (y) the Common Securities are issued against payment
therefor as provided in the Declaration, such Trust Securities will be
duly and validly issued and, will be fully paid and nonassessable
undivided beneficial interests in the assets of the Trust; the holders
of Trust Securities, as beneficial owners of the Trust, will be
entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware;
(v) under the Declaration and the Delaware Act, the issuance of
the Trust Securities is not subject to preemptive rights; and
(vi) the statements in the Prospectus under the caption
"_____________________" insofar as such statements constitute a
summary of legal matters or documents referred to therein, fairly
present the information called for with respect to such legal matters
and documents.
In rendering such opinion, such counsel may note that holders of Trust
Securities may be obligated, pursuant to the Declaration, to (i) provide
indemnity and security in connection with and pay taxes or other
governmental charges arising from transfers of certificates for Trust
Securities and the issuance of replacement certificates for Trust
Securities, (ii) provide security and indemnity in connection with requests
of or directions to the Property Trustee to exercise its rights and
remedies under the Declaration and (iii) undertake as a party litigant to
pay costs in any suit for the enforcement of any right or remedy under the
Declaration or against the Property Trustee, to the extent provided in the
Declaration. In rendering such opinion such counsel may also note that the
Company, in its capacity as Sponsor and not in its capacity as a holder,
has undertaken certain payment obligations as set forth in the Declaration.
(i) You shall have received a letter on and as of the Closing Date, in
form and substance satisfactory to you, from Deloitte & Touche, independent
public accountants, with respect to the financial statements and certain
financial information contained in the Registration Statement and the
Prospectus and substantially in the form and substance of the letter
delivered to you by Deloitte & Touche on the date of this Agreement.
25
(j) The Company and the Trust shall not have failed at or prior to the
Closing Date to perform or comply with any of the agreements herein
contained and required to be performed or complied with by the Company or
the Trust at or prior to the Closing Date.
9 Effective Date of Agreement and Termination. This Agreement shall become
effective upon the later of (i) execution of this Agreement and (ii) when
notification of the effectiveness of the Registration Statement has been
released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date by
you by written notice to the Company if any of the following has occurred: (i)
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, any adverse change or development involving a
prospective adverse change in the condition, financial or otherwise, of the
Company, any Principal Subsidiary or the earnings, affairs, or business
prospects of the Company or any Principal Subsidiary, whether or not arising in
the ordinary course of business, which would, in your reasonable judgment, make
it impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus, (ii) any outbreak or escalation of hostilities
or other national or international calamity or crisis or material change in
economic conditions, if the effect of such outbreak, escalation, calamity,
crisis or change on the financial markets of the United States or elsewhere
would, in your reasonable judgment, make it impracticable to market the
Securities on the terms and in the manner contemplated in the Prospectus, (iii)
the suspension or material limitation of trading in securities on the New York
Stock Exchange, the American Stock Exchange or the NASDAQ National Market System
or limitation on prices for securities on any such exchange or National Market
System, (iv) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any court or other
governmental authority which in your reasonable judgment materially and
adversely affects, or will materially and adversely affect, the business or
operations of the Company, (v) the declaration of a banking moratorium by either
federal or New York State authorities or (vi) the taking of any action by any
federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your reasonable judgment has a material adverse effect
on the financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase the
Securities which it or they have agreed to purchase hereunder on such date and
the aggregate Firm Securities or Additional Securities, as the case may be,
which such defaulting Underwriter or Underwriters, as the case may be, agreed
but failed or refused to purchase is not more than one-tenth of the total number
of Securities to be purchased by all Underwriters, each non-defaulting
Underwriter shall be obligated severally, in the proportion which the number of
Securities set forth opposite its name in Schedule I bears
26
to the aggregate number of Securities which all the non-defaulting Underwriters,
as the case may be, have agreed to purchase, or in such other proportion as you
may specify, to purchase the Securities which such defaulting Underwriter or
Underwriters, as the case may be, agreed but failed or refused to purchase on
such date; provided that in no event shall the number of Firm Securities or
Additional Securities, as the case may be, which any Underwriter has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 9 by
an amount in excess of one-ninth of such number of Firm Securities or Additional
Securities, as the case may be, without the written consent of such Underwriter.
If on the Closing Date or on an Option Closing Date, as the case may be, any
Underwriter or Underwriters shall fail or refuse to purchase Securities and the
aggregate number of Firm Securities or Additional Securities, as the case may
be, with respect to which such default occurs is more than one-tenth of the
aggregate number of Firm Securities to be purchased on such date by all
Underwriters in the event of a default by a Underwriter and arrangements
satisfactory to you and the Company for purchase of such Securities are not made
within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter and the Company. In any
such case which does not result in termination of this Agreement, either you or
the Company shall have the right to postpone the Closing Date or on an Option
Closing Date, as the case may be, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of any such Underwriter under this
Agreement.
10 Miscellaneous. Notices given pursuant to any provision of this Agreement
shall be addressed as follows: (a) if to the Trust, to AES Trust, [ ], c/o The
AES Corporation, ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
General Counsel; (b) if to the Company, to The AES Corporation, ▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel and (C) if to any
Underwriter or to you, to you c/o ____________________________, Attention:
Syndicate Department, or in any case to such other address as the person to be
notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, its officers and directors of
the Trust, the Trustee and its officers and of the several Underwriters set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive delivery of and payment for the Securities,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter or by or on behalf of the Company, the
officers or directors of the Company or any controlling person of the Company or
by or on behalf of the Trust, the Trustees or the officers or any controlling
person of the Trust, (ii) acceptance of the Securities and payment for them
hereunder and (iii) termination of this Agreement.
27
If this Agreement shall be terminated by the Underwriters because of any
failure or refusal on the part of the Trust or the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, the Company agrees
to reimburse the several Underwriters for all out-of-pocket expenses (including
the fees and disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Trust, the Company, the
Underwriters, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Securities from any of the several Underwriters merely because of
such purchase.
This Agreement shall be governed and construed in accordance with the laws
of the State of New York.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
28
Please confirm that the foregoing correctly sets forth the agreement among
the Trust, the Company and the Underwriters.
Very truly yours,
AES TRUST [_______],
a Delaware statutory business trust
By: THE AES CORPORATION,
as Sponsor
By
-------------------------------------
Title:
THE AES CORPORATION
By
-------------------------------------
Title:
Acting severally on behalf of
itself and the several Underwriters
named above
By
--------------------------------
SCHEDULE I
----------
Number of Firm Securities
Underwriters to be Purchased
------------ ---------------
Total $
Annex I
-------
Principal Subsidiaries
----------------------
Ownership Security
Name Interest Interest
---- -------- --------