EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
Dated as of October 29, 1997
among
THE AES CORPORATION
AES TRUST II
and
X.X. XXXXXX SECURITIES INC.,
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION
and
UNTERBERG HARRIS
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is dated as of
October 29, 1997, by and among THE AES CORPORATION, a Delaware corporation (the
"Company"), AES Trust II, a statutory business trust organized under the
Business Trust Act of the State of Delaware (the "Trust") and X.X. XXXXXX
SECURITIES INC., XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION and
UNTERBERG XXXXXX, X.X. (collectively, the "Initial Purchasers").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of October 23, 1997, among the Company, the Trust and the
Initial Purchasers (the "Purchase Agreement") relating to the sale by the Trust
to the Initial Purchasers, severally, of up to 6,900,000 shares of its $2.75
Term Convertible Securities, Series B ("TECONS"). The TECONS are convertible
into shares of common stock, par value $.01 per share, of the Company (such
shares, the "Common Stock"). In order to induce the Initial Purchasers to enter
into the Purchase Agreement, each of the Company and the Trust has agreed to
provide the registration rights set forth in this Agreement for the equal
benefit of the Initial Purchasers and their direct and indirect transferees. The
execution and delivery of this Agreement is a condition to the Initial
Purchasers' obligation to purchase the TECONS under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the following
meanings:
Advice: See Section 4.
Closing Date: The Closing Date as defined in the Purchase Agreement.
Common Stock: See the introductory paragraph to this Agreement.
Company: See the introductory paragraph to this Agreement.
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Declaration: The Declaration of Trust among the Trustees and the Trust.
DTC: See Section 4(a).
Effectiveness Date: The 180th day after the Closing Date.
Effectiveness Period: See Section 2(a).
Event Date: See Section 3(b).
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Filing Date: The 90th day after the Closing Date.
Holder: Any record holder of Registrable Securities.
Guarantee: The Guarantee by the Company of certain payments to be made
by the Trust in accordance with the Guarantee Agreement.
Guarantee Agreement: The Guarantee Agreement, dated October 29, 1997,
executed and delivered by the Company for the benefit of the Holders as amended
or supplemented from time to time in accordance with the terms thereof.
Indemnified Person: See Section 6.
Indemnifying Person: See Section 6.
Indenture: The Indenture, dated as of October 29, 1997, between the
Company and the First National Bank of Chicago, as trustee, pursuant to which
the Junior Subordinated Debentures are being issued, as amended or supplemented
from time to time in accordance with the terms thereof.
Initial Purchasers: See the introductory paragraph to this Agreement.
Initial Shelf Registration: See Section 2(a).
Issue Date: The original issue date of the TECONS.
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Junior Subordinated Debentures: The 5.5% Junior Subordinated
Convertible Debentures due 2012 of the Company issued to the Trust pursuant to
the terms of the Indenture.
Liquidated Damages: See Section 3.
NASD: See Section 4(p).
Participant: See Section 6.
Person: An individual, a corporation, a partnership, an association, a
trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
Registrable Securities: The Securities upon original issuance of the
Securities and at all times subsequent thereto until (i) a Registration
Statement covering such Securities has been declared effective by the SEC and
such Securities have been disposed of in accordance with such effective
Registration Statement, (ii) such Securities are sold in compliance with Rule
144, or (iii) Securities cease to be outstanding.
Registrants: The Company and the Trust, collectively.
Registration Statement: Any registration statement of the Registrants
that covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
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Rule 144: Rule 144 promulgated under the Securities Act, as such rule
may be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the SEC providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as such rule
may be amended from time to time, or any similar rule (other than Rule 144) or
regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities: The TECONS, the Junior Subordinated Debentures, the
Guarantee and the Common Stock until the TECONS have all been converted into
Common Stock, in which case Securities shall mean the Common Stock.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations of the SEC promulgated thereunder.
Shelf Registration: See Section 2(b).
Subsequent Shelf Registration: See Section 2(b).
TECONS: See the introductory paragraph to this Agreement.
TIA: The Trust Indenture Act of 1939, as amended.
Trustees: The trustees under the Declaration.
Underwritten registration or underwritten offering: A registration in
which securities of the Registrants are sold to an underwriter for reoffering to
the public.
2. Shelf Registration
(a) The Registrants shall as promptly as reasonably practicable
prepare and file with the SEC a Registration
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Statement for an offering to be made on a continuous basis pursuant to
Rule 415 covering all of the Registrable Securities (the "Initial Shelf
Registration"). The Registrants shall use their reasonable best efforts
to file with the SEC the Initial Shelf Registration on or prior to the
Filing Date. The Initial Shelf Registration shall be on Form S-3 or
another appropriate form permitting registration of such Registrable
Securities for resale by such holders in the manner or manners
designated by them (including, without limitation, one or more
underwritten offerings). The Registrants shall not permit any
securities other than the Registrable Securities to be included in the
Initial Shelf Registration or any Subsequent Shelf Registration (as
defined below). The Registrants shall use their reasonable best efforts
to cause the Initial Shelf Registration to be declared effective under
the Securities Act on or prior to the 180th day after the filing
thereof with the SEC and to keep the Initial Shelf Registration
continuously effective under the Securities Act until the date which is
24 months from the Issue Date (subject to extension pursuant to the
last paragraph of Section 4 hereof) (the "Effectiveness Period"), or
such shorter period ending when (i) none of the Securities constitute
Registrable Securities or (ii) a Subsequent Shelf Registration covering
all of the Registrable Securities has been declared effective under the
Securities Act.
(b) Subsequent Shelf Registrations. If the Initial Shelf
Registration or any Subsequent Shelf Registration ceases to be
effective for any reason at any time during the Effectiveness Period,
the Registrants shall use their reasonable best efforts to obtain the
prompt withdrawal of any order suspending the effectiveness thereof,
and in any event shall within 45 days of such cessation of
effectiveness amend the Shelf Registration in a manner reasonably
expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional "shelf" Registration
Statement pursuant to Rule 415 covering all of the Registrable
Securities (a "Subsequent Shelf Registration"). If a Subsequent Shelf
Registration is filed, the Registrants shall use their reasonable best
efforts to cause the Subsequent Shelf Registration to be declared
effective as soon as practicable after such filing and to keep such
Registration Statement continuously effective for a period equal to the
number of days in the Effectiveness Period less the aggregate number of
days during which the Initial Shelf Registration or any Subsequent
Shelf Registration was previously continuously effective. As
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used herein the term "Shelf Registration" means the Initial Shelf
Registration and any Subsequent Shelf Registration.
(c) Supplements and Amendments. The Registrants shall promptly
supplement and amend the Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used
for such Shelf Registration, if required by the Securities Act, or if
reasonably requested by the Holders of a majority of the shares of the
Registrable Securities covered by such Registration Statement or by any
underwriter of such Registrable Securities.
3. Liquidated Damages
(a) The Registrants and the Initial Purchasers agree that the
Holders of Registrable Securities will suffer damages if the
Registrants fail to fulfill their obligations under Section 2 hereof
and that it would not be feasible to ascertain the extent of such
damages with precision. Accordingly, the Registrants agree to pay, as
liquidated damages, additional cumulative cash distributions on the
Registrable Securities ("Liquidated Damages") (i) if the Initial Shelf
Registration Statement is not declared effective by the Commission on
or prior to the Effectiveness Date and (ii) if the effectiveness of the
Initial Shelf Registration Statement for resales thereunder is
suspended at any time during the Effectiveness Period in excess of 30
days in any consecutive three month period or 60 days in any
consecutive 12-month period (the "Black Out Period"), then, in each
case, Liquidated Damages shall accrue on the Registrable Securities
included or that should have been included in such Registration
Statement over and above the stated dividend at a rate of $0.25 per
TECON per annum for the first 90 days and increasing to $0.50 per TECON
per annum thereafter, commencing on (x) the 181st day after the Issue
Date in the case of clause (i) above and (y) the day such Initial Shelf
Registration Statement ceases to be effective in excess of the Black
Out Period in the case of clause (ii) above;
provided, however, that (1) upon the effectiveness of the Shelf Registration as
required hereunder (in the case of clause (a)(i) of this Section 3) or (2) upon
the effectiveness of the Shelf Registration which had ceased to remain effective
(in the case of (a)(ii) of this Section 3), Liquidated Damages on the
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Registrable Securities as a result of such clause, shall cease to accrue.
(b) The Registrants shall notify the Trustees within one business
day after each and every date on which an event occurs in respect of
which Liquidated Damages is required to be paid (an "Event Date"). The
Registrants shall pay the Liquidated Damages due on the Registrable
Securities by paying an increased cash dividend on the applicable
quarterly dividend payment date, or, if cash dividends are not being
paid on the TECONS in accordance with the Declaration, by accumulating
dividends at the higher rate. The Liquidated Damages due shall be
payable on each dividend payment date to the record Holder of
Registrable Securities entitled to receive the dividend payment to be
made on such date as set forth in the Declaration. The amount of
Liquidated Damages will be determined by multiplying the applicable
Liquidated Damages by the number of shares of the affected Registrable
Securities of such Holders, multiplied by a fraction, the numerator of
which is the number of days such Liquidated Damages were applicable
during such period (determined on the basis of a 360-day year comprised
of twelve 30-day months and, in the case of a partial month, the actual
number of days elapsed), and the denominator of which is 360. Each
obligation to pay Liquidated Damages shall be deemed to accrue
immediately following the occurrence of the applicable Event Date. The
parties hereto agree that the Liquidated Damages provided for in this
Section 3 constitutes a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure
of a Shelf Registration to be declared effective or to remain
effective, as the case may be, in accordance with this Section 3.
4. Registration Procedures
In connection with the registration of any Registrable Securities
pursuant to Section 2 hereof, the Registrants shall effect such registrations to
permit the sale of such Registrable Securities in accordance with the intended
method or methods of disposition thereof, and pursuant thereto the Registrants
shall:
(a) Use their reasonable best efforts to prepare and file with
the SEC, as soon as practicable after the date hereof but in any event
prior to the Filing Date, a Registration Statement as prescribed by
Section 2, and to use
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their reasonable best efforts to cause such Registration Statement to
become effective and remain effective as provided herein, provided
that, before filing any Registration Statement or Prospectus or any
amendments or supplements thereto, the Registrants shall upon written
request furnish to and afford the Holders of the Registrable Securities
(which in the case of Registrable Securities in the form of global
certificates shall be The Depository Trust Company ("DTC")) covered by
such Registration Statement, a reasonable opportunity to review copies
of all such documents (including copies of any documents to be
incorporated by reference therein and all exhibits thereto) proposed to
be filed.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Shelf Registration Statement, as the
case may be, as may be necessary to keep such Registration Statement
continuously effective for the Effectiveness Period; cause the related
Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 (or any similar
provisions then in force) under the Securities Act; and comply with the
provisions of the Securities Act, the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to it with
respect to the disposition of all securities covered by such
Registration Statement as so amended or in such Prospectus as so
supplemented.
(c) Notify the selling Holders of Registrable Securities who have
provided the Registrants with their names and addresses promptly (but
in any event within two business days), and confirm such notice in
writing, (i) when a Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same
has become effective under the Securities Act (including in such notice
a written statement that any Holder may, upon request, obtain, without
charge, one conformed copy of such Registration Statement or
post-effective amendment including financial statements and schedules,
documents incorporated or deemed to be incorporated by reference and
exhibits), (ii) of the issuance by the SEC of any stop order suspending
the effectiveness of a Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus or the
initiation of any proceedings for that purpose, (iii) of the receipt by
the Registrants of any notificat-
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ion with respect to the suspension of the qualification or exemption
from qualification of a Registration Statement or any of the
Registrable Securities for offer or sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose, (iv) of
the happening of any event or any information becoming known that makes
any statement made in such Registration Statement or related Prospectus
or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of
any changes in such Registration Statement, Prospectus or documents so
that, in the case of the Registration Statement, it will not 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 not misleading, and that in the case of the Prospectus, it will
not 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 (v) of the Registrants' reasonable
determination that a post-effective amendment to a Registration
Statement would be appropriate.
(d) Use their reasonable best efforts to prevent the issuance of
any order suspending the effectiveness of a Registration Statement or
of any order preventing or suspending the use of a Prospectus or
suspending the qualification (or exemption from qualification) of any
of the Registrable Securities for sale in any jurisdiction, and, if any
such order is issued, to use their reasonable best efforts to obtain
the withdrawal of any such order at the earliest possible moment.
(e) If requested by the Holders of a majority of the shares of
the Registrable Securities being sold in connection with an
underwritten offering, (i) promptly incorporate in a prospectus
supplement or post-effective amendment such information as such Holders
reasonably request to be included therein, or (ii) make all required
filings of such prospectus supplement or such post-effective amendment
as soon as practicable after the Registrants have received notification
of the matters to be incorporated in such prospectus supplement or
post-effective amendment.
(f) Furnish to each selling Holder of Registrable Securities, if
any, without charge, one conformed copy of
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the Registration Statement or Statements and each post-effective
amendment thereto, including financial statements and schedules, and if
requested, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits.
(g) Deliver to each selling Holder of Registrable Securities,
without charge, as many copies of the Prospectus or Prospectuses
(including each form of preliminary prospectus) and each amendment or
supplement thereto and any documents incorporated by reference therein
as such Persons may reasonably request; and, subject to the last
paragraph of this Section 4, the Registrants hereby consent to the use
of such Prospectus and each amendment or supplement thereto by each of
the selling holders of Registrable Securities and the underwriters or
agents, if any, and dealers (if any), in connection with the offering
and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities, to
use their reasonable best efforts to register or qualify, and to
cooperate with the selling Holders of Registrable Securities in
connection with the registration or qualification (or exemption from
such registration or qualification) of such Registrable Securities for
offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any selling Holder reasonably
requests in writing, provided that where Registrable Securities are
offered other than through an underwritten offering, the Registrants
agree to cause their counsel to perform Blue Sky investigations and
file registrations and qualifications required to be filed pursuant to
this Section 4(h); keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration
Statement is required to be kept effective and do any and all other
reasonable acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Securities covered
by the applicable Registration Statement, provided that neither the
Company nor the Trust shall be required to (A) qualify generally to do
business in any jurisdiction where it is then so qualified, (B) take
any action that would subject it to general service of process in any
such jurisdiction where it is not then so subject or (C) subject itself
to taxation in excess of a nominal dollar amount in any such
jurisdiction.
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(i) Reasonably cooperate with the selling Holders of Registrable
Securities and the managing underwriters, if any, to facilitate the
timely preparation and delivery of certificates representing
Registrable Securities to be sold, which certificates shall not bear
any restrictive legends and shall be in a form eligible for deposit
with DTC; and enable such Registrable Securities to be registered in
such names as the managing underwriter or underwriters, if any, or
Holders may request.
(j) Use their reasonable best efforts to cause the Registrable
Securities covered by the Registration Statement to be registered with
or approved by such other United States governmental agencies or
authorities of the United States as may be necessary to enable the
seller or sellers thereof or the underwriters, if any, to consummate
the disposition of such Registrable Securities, except as may be
required solely as a consequence of the nature of such selling Holder's
business, in which case the Registrants will cooperate in all
reasonable respects with the filing of such Registration Statement and
the granting of such approvals.
(k) Upon the occurrence of any event contemplated by paragraph
4(c)(iv) or 4(c)(v) above, as promptly as practicable prepare and
(subject to Section 4(a) above) file with the SEC, solely at the
expense of the Registrants, a supplement or post-effective amendment to
the Registration Statement or a supplement to the related Prospectus or
any document incorporated or deemed to be incorporated therein by
reference, or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities being sold
thereunder, any such Prospectus will not contain an untrue statement of
a material fact or omit to state a 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.
(l) Use their reasonable best efforts to cause the Registrable
Securities covered by a Registration Statement to be rated with the
appropriate rating agencies, if so requested by the Holders of a
majority of the shares of Registrable Securities covered by such
Registration Statement or the managing underwriters, if any.
(m) Prior to the effective date of the first Registration
Statement relating to the Registrable Securities,
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(i) provide the Trustees with printed certificates for the Registrable
Securities in a form eligible for deposit with DTC and (ii) provide a
CUSIP number for the Registrable Securities.
(n) Provide an indenture trustee for the Junior Subordinated
Debentures and cause the Indenture and the Guarantee Agreement to be
qualified under the TIA not later than the effective date of the first
Registration Statement relating to the Registrable Securities; and in
connection therewith, cooperate with the trustee under the Indenture
and the holders of the Registrable Securities, to effect such changes
to the Indenture and the Guarantee Agreement as may be required for the
Indenture and the Guarantee Agreement to be so qualified in accordance
with the terms of the TIA; and execute, and use its reasonable best
efforts to cause such trustee to execute, all documents as may be
required to effect such changes, and all other forms and documents
required to be filed with the SEC to enable the Indenture and the
Guarantee Agreement to be so qualified in a timely manner.
(o) Comply in all material respects with all applicable rules and
regulations of the SEC and make generally available to its
securityholders earning statements satisfying the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder (or any similar
rule promulgated under the Securities Act) no later than 90 days after
the end of any 12-month period (i) commencing at the end of any fiscal
quarter in which Registrable Securities are sold to underwriters in a
firm commitment or best efforts underwritten offering and (ii) if not
sold to underwriters in such an offering, commencing on the first day
of the first fiscal quarter of the Company after the effective date of
a Shelf Registration Statement, which statements shall cover said
12-month periods.
(p) Reasonably cooperate with each seller of Registrable
Securities covered by any Registration Statement participating in the
disposition of such Registrable Securities and their respective counsel
in connection with any filings required to be made with the National
Association of Securities Dealers, Inc. (the "NASD").
(q) Use their reasonable best efforts to take all other steps
necessary to effect the registration of the Registrable Securities
covered by a Registration Statement contemplated hereby.
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Xxx Xxxxxxxxxxx may require each seller of Registrable Securities to
furnish to the Registrants such information regarding such seller and the
distribution of such Registrable Securities as the Registrants may, from time to
time, reasonably request. The Registrants may exclude from such registration the
Registrable Securities of any seller who unreasonably fails to furnish such
information within a reasonable time after receiving such request. Each seller
as to which any Shelf Registration is being effected is deemed to agree to
furnish promptly to the Registrants all information required to be disclosed in
order to make the information previously furnished to the Registrants by such
seller not materially misleading.
Each Holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Registrants of
the happening of any event of the kind described in Section 4(c)(ii), 4(c)(iii),
4(c)(iv), or 4(c)(v), such Holder will forthwith discontinue disposition of such
Registrable Securities covered by such Registration Statement or Prospectus
until such holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 4(k), or until it is advised in writing (the
"Advice") by the Registrants that the use of the applicable Prospectus may be
resumed, and has received copies of any amendments or supplements thereto. In
the event the Registrants shall give any such notice, the Effectiveness Period
shall be extended by the number of days during such period from and including
the date of the giving of such notice to and including the date when each seller
of Registrable Securities covered by such Registration Statement shall have
received (x) the copies of the supplemented or amended Prospectus contemplated
by Section 4(k) or (y) the Advice.
5. Registration Expenses
All fees and expenses incident to the performance of or compliance with
this Agreement by the Registrants shall be borne by the Registrants whether or
not a Shelf Registration is filed or becomes effective, including, without
limitation, (i) all registration and filing fees (including, without limitation,
(A) fees with respect to filings required to be made with the NASD in connection
with an underwritten offering and (B) fees and expenses of compliance with state
securities or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of counsel in connection with Blue Sky qualifications of the
Registrable Securities and determination of the eligibility of the Registrable
Securities for investment under the laws of such jurisdictions in the United
States as
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provided in Section 4(h)), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities in a
form eligible for deposit with DTC and of printing prospectuses if the printing
of prospectuses is requested by the managing underwriters, if any, or, in
respect of Registrable Securities, by the Holders of a majority of shares of the
Registrable Securities included in any Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Registrants, (v) fees and disbursements of all independent certified public
accountants for the Registrants, (vi) rating agency fees, (vii) Securities Act
liability insurance, if the Registrants desire such insurance, (viii) fees and
expenses of all other Persons retained by the Registrants, (ix) internal
expenses of the Registrants (including, without limitation, all salaries and
expenses of officers and employees of the Registrants performing legal or
accounting duties), (x) the expense of any annual audit, (xi) the fees and
expenses incurred in connection with the listing of the securities to be
registered on any securities exchange, if applicable, (xii) the expenses
relating to printing, word processing and distributing all Registration
Statements, underwriting agreements, securities sales agreements, indentures and
any other documents necessary in order to comply with this Agreement and (xiii)
fees and expenses of the Trustees and the trustee under the Indenture (including
reasonable fees and expenses of counsel to such trustees).
6. Indemnification
The Registrants agree, jointly and severally, to indemnify and hold
harmless each Holder of Registrable Securities, the officers and directors of
each such person, and each person, if any, who controls any such person within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act (each, a "Participant"), from and against any and all losses, claims,
damages, liabilities and judgments caused by any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement or
Prospectus (as amended or supplemented if the Registrants 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 Participant furnished in writing
to the Registrants by or on behalf of such Participant expressly for use
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therein; provided, however, that the foregoing indemnity agreement with respect
to any preliminary prospectus shall not inure to the benefit of any Participant
(or to the benefit of any person controlling such Participant) from whom the
person asserting any such losses, claims, damages, liabilities or judgments
purchased Registrable Securities if a copy of the Prospectus (as then amended or
supplemented if the Registrants shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Participant
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of such Registrable 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.
Each Participant will be required to agree, severally and not jointly,
to indemnify and hold harmless each of the Company and the Trust, its respective
directors, officers and each person, if any, who controls the Company or the
Trust within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the
Registrants to each Participant, but only with reference to information relating
to such Participant furnished in writing to the Registrants by or on behalf of
such Participant expressly for use in any Registration Statement or Prospectus,
any amendment or supplement thereto, or any preliminary prospectus. The
liability of any Participant under this paragraph shall in no event exceed the
proceeds received by such Participant from sales of Registrable Securities
giving rise to such obligations.
In case any action shall be brought against any person in respect of
which indemnity may be sought pursuant to either of the two preceding
paragraphs, such person (the "Indemnified Person") shall promptly notify the
person against whom such indemnity may be sought (the "Indemnifying Person") in
writing and the Indemnifying Person shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Person and
payment of all fees and expenses. Any Indemnified 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 Indemnified Person unless (i) the employment of such counsel has been
specifically authorized in writing by the Indemnifying Person, (ii) the
Indemnifying Person has failed to assume the defense and employ counsel or (iii)
the named parties to any such action (including any impleaded parties) include
both the Indemnifying
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Person and the Indemnified Person and such Indemnified Party 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
Indemnifying Person (in which case the Indemnifying Person shall not have the
right to assume the defense of such action on behalf of such Indemnified Person,
it being understood, however, that the Indemnifying Person 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 Indemnified Persons, and that all such fees and expenses shall be reimbursed
as they are incurred). Any such separate firm for the Participants and such
control persons of Participants shall be designated in writing by Participants
who sold a majority in interest of Registrable Securities sold by all such
Participants and any such separate firm for the Registrants, their respective
directors, officers and such control persons of the Registrants shall be
designated in writing by the Registrants. The Indemnifying Person shall not be
liable for any settlement of any such action effected without its written
consent, but if settled with the written consent, the Indemnifying Person agrees
to indemnify and hold harmless any Indemnified Person from and against any loss
or liability by reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an Indemnified Person shall have requested an
Indemnifying Person to reimburse the Indemnified Person for fees and expenses of
counsel as contemplated by the third sentence of this paragraph, the
Indemnifying Person 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
Person of the aforesaid request and (ii) such Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement. No Indemnifying Person shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such proceeding.
If the Indemnification provided for in the first and second paragraphs
of this Section 6 is unavailable to an Indemnified Person in respect of any
losses, claims, damages, lia-
-17-
bilities or judgments referred to therein, then each Indemnifying Person under
such paragraph, in lieu of indemnifying such Indemnified Person thereunder,
shall contribute to the amount paid or payable by such Indemnified Person as a
result of such losses, claims, damages, liabilities or judgments in such
proportion as is appropriate to reflect the relative fault of the Registrants on
the one hand and the Participants on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities, or judgments as well as any other relevant equitable
considerations. The relative fault of the Registrants on the one hand and the
Participants on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Registrants or by the Participants and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The parties shall agree that it would not be just and equitable if
contribution pursuant to the prior paragraph were determined by pro rata
allocation (even if the Participants were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person 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
Person in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, no Participant shall be
required to contribute any amount in excess of the amount by which proceeds
received by such Participant from sales of Registrable Securities exceeds the
amount of any damages that such Participant 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 indemnity and contribution agreements contained in this Section 6
will be in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
7. Rule 144 and Rule 144A
The Registrants covenant that they will file the reports required to be
filed by them under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder in a timely manner and, if at any time
the Registrants are not required to file such reports, they will, upon the
request of any Holder of Registrable Securities, make publicly available other
information so long as necessary to permit sales pursuant to Rule 144 and Rule
144A under the Securities Act. The Registrants further covenant that they will
take such further action as any Holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rule 144 and Rule 144A under
the Securities Act, as such rules may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the SEC.
8. Underwritten Registrations
If any of the Registrable Securities covered by any Shelf Registration
are to be sold in an underwritten offering, the investment banker or investment
bankers and manager or managers that will manage the offering will be selected
by the Holders of a majority of the shares of such Registrable Securities
included in such offering and be reasonably acceptable to the Registrants.
No Holder of Registrable Securities may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
9. Miscellaneous
(a) Remedies. In the event of a breach by the Registrants of any
of their respective obligations under this Agreement, each Holder of
Registrable Securities, in addition to being entitled to exercise all
rights provided herein, in the Declaration, the Indenture, the
Guarantee Agreement or, in the case of the Initial Purchasers, in the
Purchase Agreement or granted by law, including recov-
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ery of damages, will be entitled to specific performance of its rights
under this Agreement. The Registrants agree that monetary damages would
not be adequate compensation for any loss incurred by reason of a
breach by it of any of the provisions of this Agreement and hereby
further agree that, in the event of any action for specific performance
in respect of such breach, the Registrants shall waive the defense that
a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Registrants have not, as of
the date hereof, entered and shall not, after the date of this
Agreement, enter into any agreement with respect to any of its
respective securities that is inconsistent with the rights granted to
the Holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof. The Registrants have not entered
and will not enter into any agreement with respect to any of its
respective securities which will grant to any Person piggy-back rights
with respect to a Registration Statement.
(c) Adjustments Affecting Registrable Securities. The Registrants
shall not, directly or indirectly, take any action with respect to the
Registrable Securities as a class that would adversely affect the
ability of the Holders of Registrable Securities to include such
Registrable Securities in a registration undertaken pursuant to this
Agreement.
(d) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified
or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Registrants have
obtained the written consent of Holders of at least a majority of the
Registrable Securities. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders of Registrable
Securities whose securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect, impair,
limit or compromise the rights of other Holders of Registrable
Securities may be given by Holders of at least a majority of the
Registrable Securities being sold by such Holders pursuant to such
Registration Statement, provided that the provisions of this sentence
may not be amended, modified or supplemented except in accordance with
the provisions of the immediately preceding sentence.
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(e) Notices. All notices and other communications (including
without limitation any notices or other communications to the Trustees)
provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, next-day air courier or
telecopier:
(i) if to a Holder of Registrable Securities, at the most
current address given by the Trustees to the Registrants; and
(ii) if to the Registrants, at 0000 Xxxxx 00xx Xxxxxx, Xxxxx
0000, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx;
with a copy to Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxxxx, Xx.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; one business day after
being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if telecopied.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the trustee under the
Indenture at the address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of
the parties, including without limitation and without the need for an
express assignment, subsequent Holders of Registrable Securities;
provided, that, with respect to the indemnity and contribution
agreements in Section 6, each Holder of Registrable Securities
subsequent to the Initial Purchasers shall be bound by the terms
thereof if such Holder elects to include Registrable Securities in a
Shelf Registration; provided, however, that this Agreement shall not
inure to the benefit of or be binding upon a successor or assign of a
Holder unless and to the extent such successor or assign holds
Registrable Securities.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each
of which when so executed
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shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning
hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES
HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT.
(j) Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their best efforts to
find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.
(k) Entire Agreement. This Agreement, together with the Purchase
Agreement, is intended by the parties as a final expression of their
agreement, and is intended to be a complete and exclusive statement of
the agreement and understanding of the parties hereto in respect of the
subject matter contained herein and therein.
(l) Securities Held by the Registrants or Their Affiliates.
Whenever the consent or approval of holders of a specified percentage
of Registrable Securities is required hereunder, Registrable Securities
held by the Registrants or any of their affiliates (as such term is
defined in Rule 405 under the Securities Act) shall not be counted in
determining whether such consent or approval was given by the Holders
of such required percentage.
S-1
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
AES TRUST II,
a Delaware statutory business trust
By: THE AES CORPORATION,
as Sponsor
By:
------------------------------------
Name:
Title:
THE AES CORPORATION
By:
------------------------------------
Name:
Title:
X.X. XXXXXX SECURITIES INC.
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
UNTERBERG XXXXXX, X.X.
By: X.X. Xxxxxx Securities Inc.
By: Xxxxx X. Fuscheld
-----------------------------------
Name:
Title: Managing Director
