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. Section 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 attached as Exhibit 4.9 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 Indenture attached as Exhibit 4.4 to the Registration
Statement referred to below (as supplemented by the Supplemental Indenture
substantially in the form attached as Exhibit 4.11 to the Registration
Statement referred to below, the "Indenture") providing for the issuance of
$[____________] in aggregate principal amount of the Company's Junior
Subordinated 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 attached as Exhibit 4.13 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 I and II, certain junior subordinated debt
and guarantees of preferred securities of AES Trust I and II (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 (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 ("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 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 Davis
Polk & Wardwell, 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.
(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 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 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
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 issued
and (subject to the terms of the Declaration) will be fully paid and
nonassessable 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
corporations 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 authorization, 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).
(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 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 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 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 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. 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
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 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 William R. Luraschi, General Counsel of AES, to the
effect that:
(i) the Company and each of the Principal Subsidiaries
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 its properties;
(ii) the Company and each of the Principal Subsidiaries
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, 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 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 "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 Davis Polk & Wardwell, 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 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
or similar laws affecting creditors' rights generally and be
equitable principles of general applicability;
(iv) the Securities conform 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
therein as to which no opinion need be expressed) comply as to
form in all material respects with the Securities Act.
In addition, Davis Polk & Wardwell 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 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 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, Davis Polk & Wardwell 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, Mr. Luraschi 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 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 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 the opinions above, Mr. Luraschi 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.
In addition, Davis Polk & Wardwell will opine to the effect
that such counsel has participated in conferences with 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 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 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.
(h) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the
Closing Date of Richards, Layton & 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 Declaration 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 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.
(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
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, 1001 N. 19th Street,
Arlington, Virginia 22209, Attention: General Counsel; (b) if to the Company,
to The AES Corporation, 1001 N. 19th Street, Arlington, Virginia 22209,
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.
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.
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
---- ----------- ----------